Patent: Meaning, Benefits and Drawbacks
You've likely heard of patents in business or the media. If you're an inventor, you've probably been told to patent your creation. So, what is a patent?
Definition of A Patent
A patent is a government-issued licence granting exclusive rights to an inventor for a set time, preventing others from creating, using, or selling a similar invention. Famously patented inventions include Dropbox, developed by Drew Houston and Arash Ferdowsi. Companies like Google, Facebook, Groupon, GoPro, Apple, and Pinterest also hold patents.
What A Patent Does
Patents give inventors exclusive rights to prevent others from using, selling, or imitating their inventions without permission. Patents are business assets, like property, that can be bought, sold, or licensed.
Sounds good, right? However, as an inventor, you'll face other challenges and resource constraints. It's essential to understand what a patent can and cannot do for you.
Benefits of Patent Protection
A patent is useful if you plan to manufacture and sell your product. It justifies the design, production, and marketing of your invention, providing lead time over competitors who might "knock off" your product. It ensures legal protection, allowing enforceable action against patent infringements.
If you license your invention to another company, a patent is a valuable asset during negotiations. With the patent's legal fees and risks settled, you can negotiate better terms and higher royalty payments. The patent also gives companies confidence that they aren't infringing on other patents.
Other benefits include:
Creating market entry barriers for similar inventions.
Reducing competition, increasing market share, prices, and profits.
Levelling the playing field against established, well-funded competitors.
Drawbacks of Patent Protection
Patent protection has limitations. Enforcing a patent can be challenging, with no "patent police" to prevent theft. If your patent rights are infringed, you'll spend time and money seeking legal assistance.
A patent claim is specific, meaning competitors can design similar products with a few different features. This is why even big companies with large budgets see their products knocked off by rivals.
Other drawbacks include:
The time-consuming and complex process of obtaining a patent, which may take years. For example, Facebook's patent application took six years.
Exclusive rights are limited to the jurisdiction where the patent was filed. To prevent international competition, you must file patents in multiple jurisdictions.
The Next Step
After assessing your business opportunity and weighing the costs and benefits, what's next? Learn about patents and consult resources before seeing a patent attorney. Conduct a preliminary patent search, develop a prototype, research the market, and evaluate production costs. Then, seek legal expertise.
Summary
When evaluating your invention, keep an open mind. While patent attorneys provide valuable advice, explore your options. Make the right decision, consult the right people, and prepare to enter the market.