A patent is an exclusive form of Intellectual Property (IP) that provides the owners with the right to exclude or restrict others from exploiting the patented innovation or technology, which includes manufacturing, using, distributing, selling, or merchandising the patent invention. The Patent Rights enable the patent owners to recoup the manufacturing costs and obtain an ROI in the development of the patented technology. Without any second thoughts, proactive Patent Protection stimulates research and is a prime requirement for raising venture capital. Moreover, it is also crucial to the overall economic growth of a nation.
Value from a patent offers a lot of benefits to the patent owners, with some of them may proving to be more applicable to one business or another. First and foremost, a patent offers freedom of movement in the company industry. For most of the companies across the globe, this freedom of movement can be even more valuable, especially in a crowded industry with many competitors. Timely and early filing of a Patent Application help in limiting the risk that someone else may have already obtained a patent corresponding to the same idea or innovation. This early mover position offers the company with greater assurance concerning that it shall never require licensing the technology from a patent holder. Undoubtedly, the sooner you apply for a patent, the better shall be the chances that you are the first in the race.
A patent also holds immense potential for providing licensing opportunities with business firms not only inside but also outside a company’s industry. An active patent program can lead to generating a lot of revenue from the licensing of a patent that covers business processes or technology not usually practiced by the company. A patent grant enables small businesses or individual inventors to go ahead with selling the rights or giving licenses to others who may be in a much better financial or technical position for bringing those ideas to the market. Many technology companies nowadays, including Qualcomm and Rambus, no longer manufacture their products, and in contrast, focus on licensing technology innovation. Also, what some companies do is, license the IP on technology that they use to their competitors by forcing them to innovate and reinvent constantly. A few others patent technology from time-to-time, which they never themselves practice commercially and in place sell to others for doing the same.
A patent also leads to an overall increased corporate value. In this highly competitive business environment, corporate valuation depends greatly on a company’s IP assets, including its patents. At present, the corporate assets of a company account only for its 15% value, while its IP assets account for 85% value. Additionally, a patent protects a company from the issues of Patent Infringement by excluding others from practicing critical technology and business processes and initiating legal proceedings, if required.
For obtaining a patent, business firms, individuals, and organizations need to file a patent application by appropriately describing the invention or innovation and its use in technical terms. The patent application has to meet a few legal requirements, namely, newness, uniqueness, and usefulness. The Patent Office of the country in which you file the patent application shall examine the invention based on the patent subject matter eligibility and issue the patent grant certificate accordingly.
A patent in a specific country is granted as per the patent application filed directly to the patent office of that country. For instance – a US patent shall be granted based on the patent application filed with the US Patent and Trademark Office (USPTO). The Patent Cooperation Treaty (PCT) offers a much-simplified patent application process for over 100 countries around the world. It allows the inventors to file a single patent application by designating many countries, instead of filing separate national or regional patent applications.
For identifying and fully realizing the potential of value from a patent, business firms and inventors must put in sincere efforts to define a strategic approach corresponding to accessing and protecting their IP assets. Part of this approach includes coming up with an active patent program for identifying and evaluating the technology over which you are looking to obtain a patent. Further, this approach should efficiently determine ways for maximizing the value of a patent while reducing the costs associated with it. The value-cost evaluation is of utmost importance, especially when it comes to international patenting.