Why obtain a Patent?

• The standard answer: a patent allows you to exclude others from making, selling, or using the claimed invention. While this “monopoly” right is very powerful, you must enforce it yourself, typically by notifying the infringer, and potentially following up with a lawsuit.
• But, patents also perform important signaling functions that may increase sales or trust:
  • Patents warn potential competitors away from your market niche, particularly if the product is marked as patented.
  • Patents show potential investors that your technology is novel and protectable.
  • Patents tell buyers that your technology is new and unique.
• Surprisingly, patents may actually reduce development costs:
  • Patents can be used to secure loans and other funding at a reduced interest rate.
  • Patents are a medium of exchange between development partners. Not only do they allow partners to deal with each other, but they allow the partners to keep track of who is contributing what to the enterprise, and prevent unwanted technology transfer between partners. Patents allow joint ventures to occur, where otherwise the risks of co-development would exceed the cost benefits.
  • Similarly, patents allow co-inventors to keep track of contributions, and provide another method of compensation, besides stock and monetary compensation.
• Other benefits:
  • Patents provide a defense against other infringement suits. When the parties sell similar products, it is quite common to counter an infringement suit with an infringement suit, and the resolution is often a cross-license.
  • Patents provide an alternate source of income. Patents are property, and may be sold or licensed to others either outright or for a royalty.

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