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Why Patents are Vital to Your Business Survival and Growth

Recently there have been many cases of companies being sued by holders of patents, and this can seriously hamper the business of large corporations and also of many small internet based businesses. In addition, many large companies such as I.B.M. and Texas Industries recieve royalties from licensing their patents which bring a significant addition to their profits. Many times companies are so concerned with daily business that they do not pay sufficient attention to the desirability and even need to protect their current products (and even future products) by means of good patent protection.

Even with a patent portfolio, many companies are not aware or concerned that patents can be broken and even bypassed by someone skilled in patent strategy and particularly in the underlying technologies.

The following will give details about the value of patents that may not be appreciated by many people - including your competitors.

1. To prevent others from using and competing with inventions and technology developed or licensed by your company.

2. Even if you do not want to take the trouble and expense of patenting and protecting your inventions and technology, it is necessary to obtain patents to prevent others from obtaining any patents limiting you in use of your unpatented inventions and technology.
3. You can prevent others from patenting your inventions and technology if you quickly publish or publicize the invention. I understand that once the invention details are in public domain, it can not be validly patented, particularly under the "first to file" convention in many countries outside the United States, (except for a proven first inventor within certain conditions and time limits.) There is a potential problem because others may be able to see extensions of your inventions and file patent applications for these improvements or new applications, thus blocking you. However, if you have an issued patent on the basic invention, then you have some control over extensions or "picket fence" patents.

4. A portfolio of patents for your company can be valuable in negotiating with other companies holding patents because you can trade use of your patents for use of their patents.

5. Protection is also available through copyrights and trade secrets. The value of copyrights is demonstrated by the "look and feel" lawsuits involving major software and microcomputer companies such as Microsoft, Apple, and Hewlett-Packard.

6. The value of trade secrets and patents is shown by the recent lawsuits involving Microsoft and patents of Stack Electronics Inc. concerning data compression software. The role of trade secrets is shown by a counter suit by Microsoft that Stack illegally "reverse-engineered" or "deep reverse-engineered" Microsoft technology. Because each party has technology that the other wants, there can be settlement that involve sharing technology and patents. In any event, ownership of patents, trade secrets, and copyrights can be a major barrier for competitors.

7. Another software patent case involves Microsoft and a claim by Wang Laboratories the some of Microsoft technology violates long standing Wang patents. The effect could be a disturbance of business and loss of money.

8. The growing importance of software patents is shown by the jump in software patent applications from 6,600 to 8,391 in 1993. Actually granted were 3,613 and some of them could represent an important restriction in business for many companies.

9. In the area of hardware patents, Kodak lost a patent lawsuit by Polaroid involving patents involving instant film technology and was forced to remove its instant film products from the market and pay a very large amount of money to Polaroid.

10. Honeywell Inc. was involved in a lawsuit with Litton Industries and was apparently obligated to pay $1.2 billion to Litton for patent infringement of an airplane guidance system. If treble damages are awarded the case will get into real money. However, on appeal, the judge can reduce the award, but there is still a serious financial penalty.

Actually, there are many more reasons for a company to develop a large portfolio of patents in spite of the costs.

Intellectual Property (IP) includes Copyrights, Trade Secrets, Trademarks, and knowhow in addition to issued Patents. Even Pending Patent Applications have value because companies have been known to purchase competitive Patent Pending Applications (PPA) in order to avoid damage if the patent issues to a competitor or could result in claims for royalties. If it felt that a patent can be obtained with protective claims, it is a good idea to consider obtaining your own patent because if your trade secret is independently discovered by another, then you will be limited in using your trade secret because of the competitive patent.

As a recent example of the problem of claims of misappropriation of intellectual property is the claim of SCO that IBM was donating some Unix code that it licensed from SCO. Donating this code to Linux makes it open source code and can be used without approval by SCO, and SCO thus loses the potential revenue from licensing. SCO is suing IBM for one billion dollars. IBM may be forced to buy SCO to settle the matter without extensive lawsuits.

Companies such as I.B.M. have realized royalty income totaling billions of dollars over the last ten years.

Other companies are being forced to pay large royalty or licensing fees to companies that have patents that can limit the business of the company. Many times these claims are based upon competitor patents that were filed years ago and are being enforced when the technology caught up to the early patents that have not yet expired. Legal opposition to the patents is very expensive even if you win.

My own experience as an inventor, and scientist, who consultants for patent law firms on behalf of their clients has shown me the costs and difficulties of countering claims based upon early patents. I have been able to help clients win patent law suits and to reduce damages by large amounts.

It would have been better for the clients if they had spent more effort in making inventions and in obtaining strong, worthwhile patents. A large collection of patents can be used to trade for access to necessary competitive patents even if you do not plan to use your patents in your current business.

I have found that a large number of existing patents are token patents with allowed claims having little value or strength. My experience shows that I can bypass many of the issued claims. It is therefore important to examine the claims being prepared to detect the weaknesses and to prepare "bullet proof" claims, possibly with my help.

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Summary

In view of the above cases, you might want to explore the various ways that we can help you and your company, including:

a. Many times, existing patents can be broken or even bypassed. Careful examination of the issued claims, and a detailed understanding of the underlying technology can show how the claims can be bypassed while still giving useful products. This gives you leverage in fighting patent related lawsuits and in negotiating better deals.

b. New patent applications for you can be identified that will not be blocked by the prior claims or teaching.

c. Picket fence patents can be established around competitive patents. This can give you access to use of the basic patent by trading access to your picket fence patents.

d. Loopholes in your important patents can be identified, sometimes soon enough so that you can obtain new patents giving better protection.

e. A good patent portfolio for your company adds value since it represents tangible, valuable, durable assets.

Contact us for more details and a discussion of your needs, problems, and objectives so that we can suggest various ways how we can help you and your organization.

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Providing Inventions And New Products
Invention devised "By Request", for serious companies and investors, at no cost or obligations.

Ten Reasons Why Companies Need New Products
In order to survive, prosper, and grow, Intellectual Properties (IP), particularly Patents, are becoming vital to many companies. Other companies with their own Intellectual Property can be a danger to your company.

See a List of Some of Our Inventions
This is a list of some inventions that are still available for licensing or purchase. Also included are some inventions that we have been thrown into the public domain so that no one else can patent them. They are examples of what has been lost because they are ahead of their time, or because there was no interest shown in licensing them.

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