By World Intellectual Property Organisation (WIPO)
Reasons for Patenting Your
What Happens if you do not
Patent Your Inventions?
Innovative and creative ideas are at the heart of most
Ideas by themselves, however, have little value. They need to be developed,
turned into innovative products or services and commercialized successfully so
as to enable your SME to reap the benefits of your innovation and
Intellectual Property (IP),
particular, can be crucial for turning innovative ideas and inventions into
competitive products that significantly increase profit margins.
SME may also use patents to earn royalty revenue by
licensing such patented
inventions to other firms that have the capacity to commercialize them. This may
not only save your SME money, but also provide you with a stream of income from
your invention or the inventions of employees of your SME, without the need to
invest in its commercialization.
practical information on the costs of patenting, the time taken for patents to
be granted and other useful
FAQs, see link or contact your
National IP office.
Patenting Your Inventions
Exclusive rights – Patents provide the exclusive rights which usually
allow your SME to use and exploit the invention for twenty years from the
date of filing of the patent application.
Strong market position
– Through these
exclusive rights, you are able to prevent others from commercially using
your patented invention, thereby reducing competition and establishing
yourself in the market as the pre-eminent player.
Higher returns on investments
invested a considerable amount of money and time in
products, your SME could, under the umbrella of these exclusive rights,
commercialize the invention enabling your SME to obtain higher returns on
Opportunity to license or sell the invention
If you chose not to exploit the patent yourself, you may sell it or license
the rights to commercialize it to another enterprise which will be a source
of income for your SME.
Increase in negotiating power
– If your
SME is in the process of acquiring the rights to use the patents of another
enterprise, through a licensing contract, your patent portfolio will enhance
your bargaining power. That is to say, your patents may prove to be of
considerable interest to the enterprise with whom you are negotiating and
you could enter into a cross licensing arrangement where, simply put, the
patent rights could be exchanged between your enterprise and the other.
Positive image for your enterprise
Business partners, investors and shareholders may perceive patent portfolios
as a demonstration of the high level of expertise, specialization and
technological capacity within your company. This may prove useful for
raising funds, finding business partners and raising your company’s market
cases, where an enterprise has merely improved an existing product and the said
improvement is not sufficiently inventive to be deemed patentable,
models (or "petty patents" or "utility innovations") may
represent a good alternative, if available in the country in question. On
occasions, it may be advisable for your SME to keep its innovations as
secrets which requires, in particular, that sufficient measures
are taken to keep the information confidential.
highly advisable for SMEs engaging in inventive activities to consult patent
databases to find out about existing technologies, identify licensing partners
in case a technology already exists and avoid duplication of research
activities. A more comprehensive analysis of the importance of
searches is available.
if you do not Patent Your Inventions?
Somebody else might patent them
– In most countries (with the exception of
the United States), the first person or enterprise to apply for a patent for
an invention will have the right to the patent. This may in fact mean that,
if you do not patent your inventions or inventions of the employees of your SME, somebody else
– who may have developed the same or an equivalent
invention later – may do so and legitimately exclude your enterprise from
the market, limit its activities to the continuation of prior use, where the
patent legislation provides for such exception, or ask your SME to pay a
licensing fee for using the invention.
Competitors will take advantage of your invention
– If the product is successful, many other
competitor firms will be tempted to make the same product by using your
invention but without having to pay for such use. Larger enterprises may
take advantage of scale economies to produce the product more cheaply and
compete at a more favorable market price. This may considerably reduce your
company’s market share for that product. Even small competing enterprises
can produce the same product and often sell it at a lower price as they do
not have to recoup research and development costs incurred by your SME.
Possibilities to license, sell or transfer technology will be severely
hindered – Without IP rights,
transfers of technology would be difficult if not impossible. Transfer of
technology presupposes ownership of a technology which can only be
effectively obtained through appropriate IP protection. Moreover, wherever
negotiations do take place for transferring a given technological
development without IP protection over the technology in question, parties
are suspicious of disclosing their inventions, fearing that the other side
may “run away with the invention.”
IP protection, in particular patent
protection, is crucial for acquiring technology through its licensing.