Patent: A Tool, Not A Business

A patent in the United States grants an inventor the right to exclude others from making, using, selling, offering for sale, or importing the claimed invention in this country.  Such a right to exclude competitors can be a useful business tool.  But too many inventors, in my opinion, delay the birthing of an invention-centric business while waiting for a decision on a grant of a patent from the United States Patent and Trademark Office (USPTO). 

Why Not Wait?

Patent prosecution routinely takes between two and three years to get to the USPTO’s decision on a patent, and often takes longer than that.  Of course, there are no guarantees that the ultimate decision from the USPTO will be a notice of allowance after those years of prosecution.  Also, even if a patent is eventually granted, the claims allowed by the USPTO may or may not create an exclusive right that is broad enough to be of business value.  Simply put, if your plan is to trigger the start of your business with a grant of patent, you risk waiting for a “go” signal that may never come.

What’s More Important?

Don’t get me wrong:  Pursuing patent protection may be a great thing for your business.  But rarely is getting a patent the only thing.  Remember:  A patent does not give an inventor the right to make, use, or sell her invention.  The inventor already has that right!  Instead, my advice to every client is to move forward with a sound, well-considered business plan that includes at least one path for commercial success that does not depend on a patent.  And, yes, I mean “every client.”  Even a non-practicing entity (NPE) needs to plan for managing, defending, valuing, and marketing its intellectual assets.  In fact, I recommend the inventor complete a business plan as early as possible and share it with the registered patent attorney tasked with advancing prosecution of the inventor’s patent application.  Business insights such as perceived competitors, manufacturing locations, and marketing targets may be significant to the drafting of claims.

What About Protection?

After the business plan is developed, execute it.  Of course, that business plan must account for protection of intellectual assets, even without the benefit of a patent.  Depending on the nature of your invention and the character of your business, many approaches may be available for protection the intellectual assets of the business (some of which can coexist with a patent!).  The following are a few protection examples:

Copyright – Particularly useful for software companies, copyright is an inexpensive means (compared to patent prosecution) for protecting recorded artifacts like source code and design documents from unauthorized copying and distribution.  Limit availability of such artifacts, and institute a tracking discipline for authorized copies.

Trade secret – To limit the risk of employees of the business inadvertently (or intentionally) disclosing business-critical information and know how to competitors, the business can document information security procedures and train employees routinely in those procedures.  Also, the business may draft and enforce employment agreements and termination letters to contractually discourage unauthorized disclosure.

Nondisclosure Agreements – Before exposing business-critical knowledge to potential business collaborators and investors, require that they sign a nondisclosure agreement that contractually limits the receiver’s ability to practice the invention themselves or to divulge invention details to others.

Bottom line:  You should not expect that your building of a better mouse trap (even a patented mouse trap!) will result in collaborators and customers beating a path to your door.  Making that happen takes business planning and execution.  The inventor who puts off this important work while waiting for the patent prosecution process to end risks missing the window for commercialization altogether.