Jul 14, 2015
While many companies make acquiring patent protection on critical innovations a core part of their business strategy, there are also companies that take the position that pursuing patents is not worth the time and effort. The reasons for forgoing patent protection espoused by the "anti-patent" companies are many and varied. However, upon closer inspection, it becomes apparent that many of these reasons are based on misconceptions regarding the value of patents and the patent process as a whole.
Suing for infringement isn't the only name of the game
Perhaps the most frequently cited reason for not pursuing patent protection is the belief that the only real benefit provided by a patent is the ability to sue an infringer. For many companies, the cost of asserting a patent is prohibitively high, making the ability to sue for infringement an insufficient reason to pursue patent protection in the first place.
But viewing patents as only a means to sue infringers ignores the many other benefits provided by patents.
For example, patents can provide a strong marketing advantage. The ability to advertise a product as including patented technology can help to impress potential customers and drive sales.
A robust portfolio of issued patents and pending patent applications can also help to attract investors. Many venture capitalists shy away from investing in emerging companies that fail to take active steps in protecting their technology for fear that competitors can easily enter the market and threaten their ROI. On the flip side, investors see a company committing its own funds to investment in IP as a sound business decision and evidence that the company is fully behind its product.
Patents can also serve as a valuable shield against accusations of patent infringement. A company accused of patent infringement can offer a favorable license to their patent portfolio in exchange for the infringement suit being dropped. This is especially true when the patent portfolio being offered up as a bargaining chip includes a large number of diverse patents.
And licensing arrangements don't need to be used exclusively in defensive situations. Robust patent portfolios can be used to generate substantial revenue for a company through third-party licensing agreements that bring in royalty payments.
A friendlier patent process
Another common reason given for ignoring patents is that the process of obtaining a patent is too expensive, too slow, and too difficult. But relatively recent developments at the United States Patent and Trademark Office (USPTO) have positively addressed each of these issues.
On the length of time it takes to obtain a patent, many options now exist that provide for expedited examination. For example, patent applicants can now simply pay an additional fee at the time of filing a new patent application to obtain examination within a matter of a few months, rather than after waiting a year or more.
Even something as simple as the age of an inventor named in a patent application can grant a company the right to expedited examination. Under USPTO rules, if any inventor is 65 or older, a request for expedited examination will be granted. There is no additional fee, and the age of any other inventors named in the application does not affect the right to expedited examination.
Even without programs such as those discussed above, the overall speed of examination has been increasing in recent years. According to one recent study, the median time from filing date to issuance of a patent applications is currently 30 months, as compared to 40 months just five years ago.
And for those that worry that obtaining an issued patent is too difficult, allowance rates at the USPTO are generally up in recent years. Allowance rates at the USPTO are currently averaging over 50 percent, and they can hit 65 percent or more when the application deals with certain technologies (e.g. optics, semiconductors, and electrical circuits).
While the decision to pursue patent protection still takes careful analysis on the part of every company, concerns about the limited usefulness of patents or the slow and arduous process of obtaining patent protection should be minimized in light of recent trends.
Scott Brairton is Counsel for Perkins Coie. Reach Scott at 303.291.2368 or SBrairton@perkinscoie.com.