Over the years, there has been a lot of passionate commentary from folks with very strong views about patents. Some are unwavering advocates for obtaining patents while others are fierce critics who view patents as having no value or being inherently evil. Like most polarized discussions, however, the truth about patents is somewhere in the middle and that important truth is often lost among all of the passion. So here it is: a patent application should be viewed as a business investment that may provide a long term business asset. Whether to make that investment is not a one-size-fits-all proposition. Like any smart investment, the decision to obtain a patent should informed and made on a case-by-case basis with an eye to the potential return on investment.
The notion that a patent, without more, will inherently provide value is just wrong. Not every idea should be patented. In fact, even some really good ideas may not be well suited to patent protection and FOMO (fear of missing out) should not be the main driver of the decision. Instead, consider how your business will benefit from the costs incurred in the patenting process.
Will a patent application add short term value, e.g., will potential investors see more credibility in a business with a growing patent portfolio? Will a patent be needed to license an invention? Will it add long term value, e.g., if there is an “exit,” will the patent portfolio add value to the transaction? Where will the commercialization of the invention be in 3, 5, 10, and 15 years? Will the patent provide a meaningful barrier to entry to a competitor looking to enter the market or provide a meaningful licensing opportunity? These are just a few questions to consider when making the initial decision to pursue a patent. Of course, the answers all involve a degree of forecasting and speculation and could be very wrong, but isn’t that true with any investment? Uncertainty or imperfect information is not a reason to avoid considering these questions to make a good business decision.
Obtaining a patent can be expensive. Enforcing a patent can be tremendously expensive. Sometimes that expense is a fantastic investment, other times not so much. Looking to the future is not a precise science and you won’t be right all the time, but a thoughtful approach will certainly increase your odds of success. Whether you are a solo inventor, a fortune 500 company, or somewhere in between, the decision to pursue and maintain a patent should ultimately come down to one simple question: is this a good investment?