How to Use Patents to Improve Competitiveness

The concept of patents can be traced back to the 14th century and it has consistently evolved over time. The concept of patents was introduced to encourage innovators by awarding exclusive rights over the improvements in technology made by them. In essence, a patent is a set of exclusive rights granted by a country in exchange for a public disclosure of their invention.
The rights granted to a patentee, in most countries, include, the right to exclude others from making, using, selling, importing, offering for sale or distributing the patented invention without permission of the patentee. This set of exclusive rights is granted for a limited period of time, and in most cases the right is limited to 20 years.

The exclusive rights granted to a patentee have business impact, some of which are listed below:

  • A patentee gets the liberty to enjoy monopoly over the patented invention for 20 years
  • A patentee can monetize his patented invention by selling or licensing out his rights, in addition to other ways of monetizing
  • Engineers and scientists can access a rich pool of patent information and improvise on existing technology
  • Competitors will have to create non-infringing products and processes

The business impact of patents can be used to enhance the competitiveness of a business. A wholesome, systematic and customized approach towards patents is required to use the power of patents to positively impact your business.

4 fold approach for enhancing competitiveness

1. Build a patent fortress

2. Proactively safeguard your business interests

3. Respect others intellectual property

4. Intelligent approach to product and process development

Build a patent fortress

One of the approaches for improving competitiveness of a business is by having product differentiators. Product differentiators are brought about by developing products that are technologically superior, has newer/better features or addresses specific needs of customers.
Sometimes, there might not be any changes made to the product, however, companies might differentiate themselves from competition by offering products at reduced prices.

This might be possible by making changes to the processes used in producing the product. Such modifications made to the products/processes might be patent worthy. Hence, when a company feels that they have made some modification that might be patent worthy, it is important to contemplate the idea of having such improvements protected by a patent.

It shall be noted that such improvements give added advantages to a business. If a company hasn’t taken any measure to protect the improvement made by them, then competitors might as well copy such improvements, thereby diluting the advantage gained by the business. Further, competitors might copy the products and introduce the same at lower prices, as they would not have invested in developing the product/process. By protecting the improvements made to the products or processes, businesses gain at least the following advantages:

  • Create an entry barrier for competitors
  • Maintain product or process differentiators
  • Protect products or processes from being copied by competitors
  • Enjoy monopoly over improvements for 20 years
  • Increase valuation of the company

Proactively safeguard your business interests

The previous approach dealt with protecting technological improvements made by a company. While, the previous approach dealt with building a patent fortress to safeguard ones business territory, it is equally important to monitor the patent fortress’ built by competitors.

It is often seen that, in a bid to build a patent portfolio that is as strong as possible, companies tend to protect things that already exist and sometime try to protect improvements that are not novel and are obvious. If they do succeed in protecting such existing and obvious technology using patents, then they might stop others from using such technology, or they can at least stop others from using such technology till somebody proves that the patents were wrongly granted.

It is important to take necessary actions to avoid being in a situation in which a company uses patents granted to an existing or obvious improvement to stop you from using such technology. This can be achieved by monitoring and opposing the patent applications filed in the technology that is of your interest

One can monitor patent applications filed by competitors and oppose grant of patent to such patent applications. On the other hand, one can also monitor patents that are getting granted in related technology fields, and opposes the patents even after the patent is granted. By taking such proactive steps, businesses gain at least the following advantages:

  • Ensure against obvious improvements being protected by competitors
  • Enhance the valuation of patents held by you in a technology field
  • Avoid being sued for infringing patents that shouldn’t have been granted in the first place
  • Easy access to freely use and adopt minor improvements in technology

Respect others intellectual property

In the previous two approaches, we dealt with building a patent fortress and ensuring that competitors do not strengthen their patent fortress using minuscule technological improvements. In the current approach we illustrate why it is important to respects others Intellectual Property rights.

As highlighted in the introduction, patents give exclusive rights to the patentee to exclude others from making, using, selling, importing, offering for sale or distributing the patented invention without permission of the patentee. In other words, if you copy, intentionally or otherwise, an invention patented by others, then you will be infringing on their patent right. A patentee can sue you for violating his patent rights, and if the court finds you guilty, then the damages that you might end up paying could be significant. Hence, it is important to be aware of patent rights held by others while carrying out your business.

A well proven approach to ensure that your products or processes don’t infringe on others patent rights is by carrying out a Freedom to Operate (FTO) study before introducing a product in a country. It is important to dig out the patents that exist in the field that you operate in and determine if your products or processes infringe on others patents. If found that the products/processes might infringe on others patent rights, then necessary steps have to be taken to avoid such infringement, and thereby avoid expensive law suits. By taking such precautions you will at least gain the following advantages:

  • Ensure against introducing infringing products to the market
  • Avoid expensive patent infringement suits
  • Ensure that brand name is not tarnished by such infringement

Intelligent approach to product and process development

Remember, no one got too far by reinventing the wheel, neither will you; hence, there is no point in reinventing the wheel. It is important to appreciate the fact that most of the problems that we might be trying to solve, might have been solved by somebody else in some part of the world. Therefore, it will be intelligent on your part to look at such solutions and improvise on them. Patent data is considered to be the richest source of scientific information, and using this information is an intelligent approach to product and process development.

By harvesting information provided by patents, you can work on improving solutions provided by others. Hence, the solution provided by you might end up being much more superior and also different. Further, one reduces the possibility on developing something that has already been developed, hence, your investment in R&D yields better returns. Furthermore, one can bring down the cost of developing a product by simply copying a patented invention and introducing the same in a country where the invention has not been patented. Additionally, patent data can be used to analyze technology trends and plan your business accordingly.

The ways in which patent data can be used by businesses is endless, and the advantages gained by using patent data are tremendously valuable. Some of the advantages of using this approach are:

  • Enhanced returns on investment in R&D
  • Development of products/processes that have improvised on existing technology
  • Reduced cost of development of product/process
  • Better business forecasting and planning

We hope you found this article helpful. Please feel free to contact us for any information that you may need.

About the Author

[Guest article contributed by Kartik Puttaiah – he is a patent consultant and a registered Indian patent agent.  He is also the Co-founder of InvnTree Intellectual Property Services Pvt. Ltd., a patent services company based out of Bangalore.]

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