Have you created a patent portfolio that protects your business? Here’s what you need to know.
You have an idea and you have pitched it successfully. Congratulations! Now you have a team and investors who are enthusiastically building the product that you believe is the next best thing. It has lots of promise, you are solving a real problem, and you expect a high return on your investment. You’ve hired an excellent team of IP lawyers who are developing patents that you expect to protect your technological innovations. You’re working overtime — your spouse isn’t thrilled with how much time it’s gobbling up, but hangs in there with you, while your kids see you occasionally on weekends. You’re doing your best to do everything right.
You try not to worry because you are very aware of your competitors and want to be sure you create a splash in the marketplace. But there is someone else who has figured out how to deliver another solution to the same problem that you are solving and it’s already selling very well in ‘your’ market. Things are changing fast!
In my opinion, there are three questions that every business owner should consider when it comes to protecting their intellectual property:
First: Do my patents protect me from the competition?
Probably not. The hard truth is that most patents can be circumvented relatively easy, which means that there is another solution that could enter your market without infringing on your patent. If you want to protect what you have worked so hard for, then your patent(s) need to do way more than preventing others from copying your technology. You’ll need to think strategically about creating a portfolio of patents that does far more than just copy protect your specific designs. Strategize with a patent specialist — look into how well protected you really are and how protectable your business really is against the competition.
“In business, I look for economic castles protected by unbreachable ‘moats’.”
— Warren Buffett
Next: How can I use patents to truly protect my business?
To truly protect your business, you’ll typically need to protect far more than your technology. In fact, a patent portfolio that protects just your technology only guarantees that no one else can copy ‘your’ technology. It is like creating a new type of knife to slice bread while missing all the other types of knives that can slice bread, as well. Protecting your knife does not protect your business, it only copy-protects the knife design that you invented.
What you need is a patent portfolio that protects the business opportunity that the bread knives offer… a barrier to entry to your competition. To do this, you will typically need a strategic portfolio of patents that protect the overall use case that your design is solving for. Done right, a patent portfolio will protect your business like an unbreachable moat around a castle.
The law allows you to protect your invention, and at the same time encourages competition — so. Other people will have their solutions for the same use case and will go right to protecting their technology while competing with you.
“The strength and vitality of the U.S. economy depends directly on effective mechanisms that protect new ideas and investments in innovation and creativity.”1
For a patent portfolio to be of any value it must act as a barrier to entry or at least be a significant speed bump for competitors. You can read more about patent valuation here, and how to compete with the ‘big boys’ here.
Finally: Can I create a patent portfolio that effectively protects my business?
Usually, YES! In fact, this is exactly what most S&P 500 companies are doing. They create patent portfolios that aim to protect their overall business strategy first and specific technology second. This is very different than what most people who submit patents do. If you start by truly protecting your business strategy with a strategic set of patents, you will protect your business well ahead of your competitors and buy the time that you need to truly dominate the market. This takes an important blend of strategy, innovation, and just plain know-how when it comes to intellectual property. Gather the right team to help you, and you’ll be well protected in the long run!