Staying Competitive By Knowing When to Seek IP Protection
A lot of people question what value a patent will have for growing their business and staying competitive. But many more, simply overlook this option - they never even consider how I.P. (Intellectual Property) protection could do far more for them than any new marketing advertising, or R&D program they wouldn't hesitate to dump huge amounts of cash into. Intellectual property law deals with protecting ideas. Three of the most common forms of IP protection are Patents, Trademarks, and Copyrights. While they can be a major source of growth and value for any company, lack of knowledge about them so often results in lost opportunities.
Here's an example: one of my clients owns a commercial construction company. He has been operating this company for over 15 years, but even prior to that he worked as a tradesman; everything from electrical work to carpentry. Over the course of 25 years he recalled having dozens of creative solutions to problems he encountered on the job every day.
This man created many unique tools that he used just to do his job more efficiently. After using these tools for years, one of his sons, who had just finished business school, motivated him to consider that other people in his situation could benefit from the unique tools he had created.
The son helped his father see, the products he had created to promote his own efficiency could be leveraged to help him make some serious money. The only way they could be certain that this was a viable idea, however, was to make sure his father had legal rights over his own creations.
Thus, he came to me.
Thankfully his son knew he needed a patent attorney to evaluate the patentability of his products. Coming to us gives us the ability to protect what is protectable, and know when its not protectable and therefore their efforts should be focused elsewhere. He saw that getting a patent can provide the competitive advantage both in one’s primary business, and also serve as a launching pad to a whole new business. It can help revitalize interest in your company both from yourself and others. But clearly this father is not alone - many people simply never stop to consider that there may be a way to grow their company, free from competition, by owning a patent. And too often that is the way it goes.
It is so important to look carefully at the role and value a patented product can have, especially when that product could form the foundation for a new successful company, or allow it to take an unexpected and exciting turn.
For people with existing businesses - especially those who have been 'at it' for a while - the value of a patent in staying competitive is perhaps the most often overlooked possibility. So often their attention goes to marketing, advertising, exhibiting at tradeshows, management consultants, etc. More savvy business owners learn, however, that owning proprietary technology, however, can effectively short circuit competition!
Do you want to avoid failure, and set your product up for success in the marketplace? The constant knowledge that there is likely someone else out there who has more resources, and more experience bringing a product to market than you do - is enough to keep any business owner up at night. We all know that if you have not secured the rights to exclusively produce/sell your product, by patenting it, then there is nothing stopping another person or company from putting together a better business/marketing model, outspending you, and potentially outselling you. To avoid this, a “barrier to entry” must be created when launching a new product/technology or business model, in order to drive away possible competition, and create sustainable success.
The #1 way to keep competitors out of your market is to create that barrier to entry through solid patent protection. The expected result - naturally - is increased sales and increased profits. The result not as expected and not as well known, however, is that the patent and proprietary technology in general, can dramatically increase the valuation of your business. Accordingly, while your product/business becomes more and more successful in the marketplace, guess what else happens...
The value of your patent increases! That’s right, the value of being able to call yourself the exclusive player in your marketplace increases.
As your product sells, and your company grows, the patent becomes even more valuable. Anyone who has ever performed a company valuation - to decide what a company is worth to a buyer or investor - knows there are many factors that weigh in when determining the overall ‘value’ of the company. For example: hard assets, products sales, projected sales, production capacity, gross profits, and company size, etc. The factor that can make the biggest difference, however, is often the scope of your patent protection. It's like the difference between owning an original oil painting by a renowned master, and a print or poster, or other copy of it. If someone wants to own that painting, the original oil you own is the only game in town.
Similarly, having exclusive rights to the product, or products you sell will dramatically increase how much someone is willing to pay for your operation. Without a patent, anything else you have created will be measured against what they believe it would take for them to duplicate your company (sales, employees, market share), instead
of buying it from you. With a patent that gives clear and exclusive rights, however, if they really want to be in that business, they need to pay what you are asking! You can seen then, how the IP you own can multiply the value of the business.
For this reason, most of the companies I work with decide that IP protection is a great investment in their business. Not only does it help their company grow as free from competition as possible; but it also ensures that as the product sells, and the market grows, so too does the value of their company.
That is why it is imperative for you to get a firm understanding about how much protection is available, and of what value that protection could be to you and your business.
Curious to know the potential for creating value in your business through patent protection?
The first step is to set up an evaluation with us, so we work with you to assess your product's patentability and the potential value of that patent to your business. Call us now at 800-728-8166.