This is the third in a series of articles on four W’s: The who, what, why, and when of patent. In this article, we’ll address the all-important question, why patent?
Recap: The 4 W’s of patent
1. Who should apply for patent? People “in the business”—working in the industry, the technology, the niche, the field of the invention—are the people who should apply for patents. The specialist knows more than the layperson about problems, needs, and solutions. She should be voted “most likely to succeed.”
2. What should you patent? Patent inventions that are in your wheelhouse. Don’t go off on a tangent or a frolic. Exxon is a big, sophisticated, profitable company, and it lost a billion dollars in its foray into semiconductors. Can your company afford to roll the dice to enter an exciting new business? Or would it be safer to stick to what you know, even if it’s a “minor” improvement—especially if it solves a customer’s problem, fills a need, gives you a competitive advantage—which you can lock in with a patent and an aggressive sales force.
3. Now, in this article, we address the question—Why? (In my next and final article in this series, I’ll address the question when to patent.)
Why patent? To make money, of course, but not in the way that many people think. You probably won’t make money by licensing your patented invention. For one thing, most patented inventions are not commercially practicable—as people “in the business” are likely to know.
Edison was in it for the money
Thomas Edison, a role model for inventors and business people, never bothered inventing (or patenting) anything unless he planned to start a business to practice the patented invention. He was in it for the money. Well, maybe for the recognition, too.
You can put your patents on the wall
A patent is a recognition from the federal government that you have made a significant contribution to the progress of technology.
Companies like Hewlett-Packard have stated and achieved high expectations of filing 3,000 patent applications worldwide in a single year. See HP’s 2000 annual report, page 40. Motorola and Nokia amassed thousands of patents. Those companies are gone or greatly reduced, their patents shelved or sold for scrap value. They failed to invent what the market wanted, and they failed to practice what they patented.
You can frame your patents and display them in the front office. Your employees can list them on their resumes and point to them to show they’re doing a good job. Some day their nieces and nephews will say, “Aunt Mary was a great inventor—she was awarded a patent!”
The U.S. Army uses patents as a metric for innovation.
Mostly, though, smart businesses get patents to practice them for profit.
The fable of licensing revenues
Contrary to common wisdom, buyers won’t beat a path to your door just because you’ve patented a better mousetrap. If you knock on their doors—the doors of the companies best positioned to make and sell your product—they’ll respond with a yawn. “Not invented here” (NIH), they’ll say. “If we needed it, we would already have invented it.” Come to think of it, they’ll add, “we probably already did invent it.” So, in any case, they’ll say, “we don’t need you or your patented invention.”
They will become interested, however, if you make and sell the better mousetrap. If you make a lot of money, they’ll be interested. If you outsell your competitors, they’ll be more than interested—they’ll be sorely tempted to copy your invention. The temptation is too great. Customers will demand the features of your new product. Cheap copies will flood the market, steal your leadership, strip your margins.
Successful inventions are copied
Do you think Samsung stood still when Apple introduced the iPhone with its smooth clean lines and innovative features? No, indeed, Samsung imitated Apple at every step along the way. And at the end of the day, because Apple was smart enough to protect its inventions with patents from the beginning, Samsung wrote Apple a check for $500 million for patent infringement damages.
If you’re in the business (who) and the invention is in your wheelhouse (what), you’re a natural to make and sell your patented invention for a profit (why). Timing is important, hence, my next article is on when to patent.
You need a patent to stop your competitors
As discussed previously, a patent is the legal right to exclude others from making, using or selling the invention. Why would you want to exclude others? Because you’re going to practice your invention for profit. And you’ll need a patent to stop your competitors from copying your invention and underselling you.
Why patent? Look to bottom line.
That, my friends, is why you may wish to patent your invention: To protect your exclusive right to practice the invention for profit.