Obtaining a patent is a lengthy and expensive process. Not only do companies need to invest in research and development, but they need to complete a bureaucratic process to protect the new concept or technology from the infringement of other parties. A patent allows a company to formally protect new developments they made or purchased from researchers.
Patent prosecution typically requires a year or longer to complete, and the research stage when planning to apply can take months as well. Businesses often need to secure specialized legal assistance when attempting to obtain a patent and must engage in proactive enforcement efforts for as long as the patent remains in effect.
For some executives or business owners, the amount of investment necessary to secure a patent might seem counterproductive and may diminish their interest in pursuing formal patent protection for new processes or ideas. However, patents can also be truly valuable because they create at least two opportunities for businesses to generate revenue in the future.
Sole control of an idea
A party that has a patent on a concept or process does not have to worry about competitors offering the exact same services or products. The patent that they obtain protects them against infringement, including competitors that engage in industrial espionage or reverse engineering to duplicate a patented idea or process. When a company is the only business that can offer certain services or products, it may develop a very valuable market niche that locks in a certain number of sales every month. Having a monopoly on certain processes or products can give a company a valuable competitive edge.
Licensing agreements
Perhaps that idea is so revolutionary that competitors insist on accessing it themselves. This situation can often be very beneficial for a company, as competitors may need to negotiate a licensing agreement with the business that holds the patent. A successful licensing agreement can lead to regular payments without fully giving up control over the patented concept. Patents help businesses become more competitive and control the use of ideas that the company developed through research or acquired via investment.
Understanding the potential economic impact of having a patent might encourage businesses to be more proactive about securing patents and enforcing them after initially obtaining them.
