Many inventors do not understand a very basic prerequisite to getting a patent: the duty to fully disclose to the United States Patent and Trademark Office (USPTO) how to make and use the inventor’s invention. The rationale for this requirement is deeply embedded in the U.S. Constitution—through amplifying statutes and case law—the implication of which is this: “You (the inventor) tell us what you know and we (‘the people,’ more specifically, the government) will give you exclusive rights to your invention for a certain duration.”
Why should research and development (R&D) teams or organizations care about patents? The answer might surprise you. A recent report by Forbes states that each year R&D introduces more than 250,000 new products into the marketplace. Of those, 66% will fail within the first two years.
In Part 2 of this series, we discussed the need to valuate your IP assets as well as the methods you can use to achieve this end. This final segment focuses on the rubber-meets-the-road question of what kinds of protection should be used for each IP asset and how much should be spent on that protection.
Patents, trademarks, and copyrights are commonly known as “intellectual property” or IP. As occasional high-profile lawsuits between large corporations illustrate, IP can be extremely valuable, causing companies to budget significant amounts of money to acquire, defend, and assert IP rights. The concept of IP can be controversial, prompting various constituencies to condemn the entire idea (e.g., as dampening innovation or hampering individuals and smaller entities), or to object to the vast sums spent on high-profile lawsuits and their resulting awards/settlement.
“How do I valuate my various IP assets?” At the outset, we recognize you likely already appreciate the difficulty of answering this question from first-hand experience. IP valuation is a complex, multivariable task and an industry unto itself. That said, this task is not impossible and can be approached from a number of ways, as we now discuss.
For most, the topic of intellectual property (IP) is a hot mess of “I-don’t-knows” conflated with “I-don’t-cares.” But it shouldn’t be. Knowing what IP is and how to protect it is fundamental to most businesses’ success, whether they know it or not. A common trap related to this attitude is to “trip over dollars to pick up dimes.” Especially for startups – for whom “keeping the lights on” trumps “protecting my IP” by several orders of magnitude on their wish-lists – this trap is almost universal.