Why Invest in Patent Protection?

AuthorDylan O. Adams
ProfessionSeattle-based patent attorney
Pages21-38
21
2
Why Invest in
Patent Protection?
“Every patent shall contain ... a grant to the patentee ... of
the right to exclude others from making, using , oering for
sale, or selling the invention throughout the United States
or importing the invention into the United States...
—Title 35 of the United States Code, Section 154(a)(1)
Before embarking on the patent process, it is important to understand
how your business can derive value from the asset that is created. In
addition to the well-known benets of being able to exclude competi-
tors from copying the patented invention or charging a royalty to use
the technology, there are many other important reasons to seek patent
protection. For example, a patent portfolio can be one of the most valu-
able assets of a company in terms of both book value and marketing
value. Patents mark a company as an innovator and are prestigious in
the eyes of potential customers, investors, and business partners. On
the other hand, patents are feared by existing competitors and act a s a
deterrent for anyone considering entering the market. Value provided
by these many benets oen goes unappreciated by companies unfa-
PatentsDemystified-F-10012015.indd 21 10/1/15 4:09 PM
22 PATENTS DEMYSTIFIED
miliar with patent assets and may result in signicant under-invest-
ment in a patent portfolio, which can be worth tens if not hundreds of
times the cost of acquiring the patents. is chapter begins by intro-
ducing the many benets derived from the basic right to exclude and
then examines other important benets that are oen overlooked by
patent owners.
THE RIGHT TO EXCLUDE OTHERS
A U.S. patent provides an exclusionary right—the right to exclude
others from making, using, oering for sale, or selling the invention
throughout the United States or importing the invention into the
United States for a limited term. However, patents do not provide the
right to practice the invention. For example, a pharmaceutical com-
pany can invent a new drug for treating cancer and can patent the
compound itself and a method for using the drug in treating cancer,
but the Food and Drug Administration (FDA) can still prevent the
company from selling the drug i f the patented treatment is considered
to be unsafe. Despite having a patent, these companies stil l face the
arduous task of seeking FDA approval for their treatments. In fact,
FDA approval typically occurs in par allel with the patent process.
Patents are only eective within specic countries, so a U.S. patent
is enforceable only within the boundar ies of the United States. For
example, once you have an issued U.S. patent you can stop anyone
within the countr y from making, using, selling, or oering to sel l the
claimed product. is applies to competitor companies that manufac-
ture or sell the product and even to customers who buy the patented
product. Similarly, for patented methods, both companies and indi-
viduals can be prevented from performing the method. On the other
hand, without patents in foreign countries, holders of U.S. patents are
unable to prevent anyone from freely making, using, and selling the
patented invention anywhere in the world aside from the United States.
However, infringing products can be stopped at ports and borders and
denied entry into the country.
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