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Your Competitive Advantage May Not Be Your Intellectual Property

As much as patent professionals like to harp about the advantages of patents, copyrights, or trademarks, it is also like asking a barber if you need a haircut.

I always recommend that all inventors, be they corporations or independent inventors, do a business plan or at least analyze the justification for obtaining protection for their ideas. This is one aspect of the analysis to consider.

In many cases, the competitive advantage for a product or company may be something other than its patents. For example, the competitive advantage may be the marketing, distribution, time to market, manufacturing trade secrets, or other strength of the business. All of these factors are a necessary part of operating a successful business.

Even if a product is patentable, there may be cases were the patent is just not worth the aggravation and money. These are products that are low volume and/or low value. A patent is valuable only when you can exercise the rights, or when those rights will be respected. If a product generates just a trickle of profits, the likelihood of an infringer is very small. If a product is moderately successful, there still may not be enough money to justify an infringement lawsuit, but there may be enough to justify trying to get a licensing agreement with an infringer.

It is only when a product will be successful enough to justify the legal expenses to defend the patent that the patent becomes very valuable.

When considering getting a patent, look at the business as a whole and see if the patent fits into that business. Evaluate the likelihood of infringement, whether or not you can detect when someone infringes, the tactics you may use in dealing with an infringer, and the costs and possibly payoffs in taking any action.

In some cases, a patent may add a considerable expense without adding anything to your business case.