Mistake #5: Not Taking the Time to Understand What Makes Your Product Valuable

March 11, 2020 | Written By Elana Bertram

Entrepreneurship, Elana Bertram

This is the fifth post in a seven-part-series detailing the biggest entrepreneurial mistakes business owners make. The series will run over the next few weeks so check back to learn more.​ To read the previous post in this series click here

Just because you can get a patent doesn’t mean you should.  Your business may be valuable because you do something that has been done before, but you provide better customer service or a personal touch that makes it special. In this situation, what you really need are trademarks and a strong branding strategy, not a patent. Likewise, a patent won’t protect your secret recipe – you’re better off keeping it a secret. 

Patents have several downsides. A patent buys you the right to sue other people for practicing – making, using, selling, or offering to sell – your invention exactly as the patent describes. 

If a competitor works around a key claim of your patent, the competing product does not infringe your patent, so you can’t sue them. Your patent has given them a precise roadmap of what not to do in order to avoid infringing the patent. 

Additionally, even if they did blatantly infringe, you still have to initiate (and win) a lawsuit to prevent them from selling an infringing product. 

Patents expire 20 years after the first filing date, which means if it takes you 15 years to build a solid market share, you only have 5 years of patent protection left before your competitors can swoop in and make a product identical to yours. On the other hand, the secret formula for WD-40 and the recipe for Coca-Cola have remained secret for decades and have never been commercially replicated. 

Patents are also public information. Think of it as a trade-off with the government: You get a limited monopoly in exchange for releasing the instructions for your invention to the public for free use after your monopoly expires.  If you don’t spring for global patent coverage, international competitors can take your patent publication and use it to make a comparable product overseas. So long as they only sell it outside the US, you have no legal action available to stop them. Your patent is geographically limited to the US if you only get a US patent, so you lose out on potential revenue internationally while helping competitors make your product.

In many industries, a patent is crucial to protect your market share. In other industries, having a plethora of patents and patent applications has substantial value even if you aren’t practicing them in commercial products.  The right decision for you depends on your goals.  Consult with your patent attorney as to why a patent is the right way to protect your invention… or not. We are not afraid to counsel clients not to pursue a patent application when we think it doesn’t offer a reasonable return on investment to safeguard the value of your IP. 

 

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