State of Innovation

Patents and Innovation Economics

Use Your Unique Selling Points to Improve Your Patent Portfolio

A patent is an attempt to create a “barrier to entry” from a business perspective.  Other barriers to entry include advertising, control of key resources, economies of scale, exclusive supplier agreements, etc.  An effective patent strategy will focus on the product’s or company’s unique selling points.  The goal is to focus the claims of the patent(s) on the technology that provides the unique selling points.  This will result in a patent(s) that provides the strongest barriers to entry and make it easy to spot competitors that are infringing your patent(s).

Most companies focus their patent(s) on the technology that the engineers believe is the most interesting.  These patents may or may not be related to the company’s marketing or sales strategy.  When a patent does not relate to a company’s unique selling points its main use is either for offensive or defensive licensing.  These patents can also be important, but they are not directed to a company’s core business.

Because most companies do not integrate their patent strategies with their marketing and sales strategies, they end up with “pay to play” patent portfolios.  By “pay to play” I mean the purpose of the patent portfolio is so the company can enter a market without facing multiple patent infringement lawsuits from their competitors.  Most of these companies consider their patent portfolios nothing more than an additional expense to enter a market.  By integrating the patent strategy with the sales and marketing strategy, the company can create a patent portfolio that is a competitive advantage that contributes the company’s market share or profit margin.

In addition to providing a barrier to entry, patents are the legal system for capitalizing and obtaining title to the cost of research and development.  A patent portfolio converts the expense of R&D into an asset.  This increases the company’s valuation allowing it to raise investment capital more easily and on more favorable terms.

The point of research and development is provide the company with a competitive edge.  Patents are marketing tools to secure the company’s competitive edge and ensure the company profits from its R&D not its competitors.

September 3, 2009 - Posted by dbhalling | Uncategorized | , , , , , , ,

1 Comment »

  1. [...] more information on how to align you patent strategy with your marketing and sales goals, see “Use Your Unique Selling Points to Improve Your Patent Portfolio”.  In your IP strategy document you need to be able to articulate how your patent strategy is [...]

    Pingback by IP Strategy Document that Amazes Investors « State of Innovation | October 5, 2009 | Reply

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