The Value of Patents
Xerox Exchange - March 17,2008
For Broadcast International, having a patent in place was essential for its CodecSys video compression system, a technology that dramatically reduces the bandwidth required to send data over satellite, cable, wireless and other information transfer mediums.
A patent was so crucial to the company because it was developing the software and then licensing it to other companies that need it, says Rob Chipman, vice president of marketing and sales for the Salt Lake City based company. The patent was attained in August and served to not only protect Broadcast International’s intellectual property but also bestow credibility on the CodecSys technology.
Approval from the U.S. Patent and Trademark Office helped Broadcast International draw interest from major players such as IBM, one of the first to license the technology. “It was important for [IBM] to know there wasn’t something similar out there,” Chipman says. Having the patent in place also helped the company pull in $20 million from investors. “I can guarantee the investors would not have had the same comfort level investing in the company [without a patent].”
Broadcast International’s experience underscores why companies need to understand real value of patents. Writing a patent that boosts your innovation portfolio is one thing, but designing an invention that customers will find useful and meaningful creates real value for your company. Acquiring a patent requires imagination, knowledge of science and the law, and serious investments of both time and money. It’s a lot of work, but the payoff can prove very profitable — especially in the long term.
Patience to Patent
Maria Uspenski spent two years trying to receive a patent for an automatic teapot called Steepware. The product, which ensures tea leaves steep for the proper amount of time, didn’t fall into a specific patent category, so finding the appropriate patent reviewer took time. Uspenski’s company, The TeaSpot, in Boulder, Colo., received the patent in May 2007, and the Steepware teapot hit the streets that December.
Although Uspenski’s initial goal in seeking a patent was to protect her product legally, she found that having a patent helps catch consumers’ attention. “It’s a real bonus that’s unique and differentiable,” she says.
In addition to the added credibility a patent provides, companies and individuals need them to protect their rights, says Scott McBride, an intellectual property attorney and shareholder with McAndrews, Held & Malloy Ltd., in Chicago. Protecting intellectual property is desirable because in many fields, copying a product is easier than ever before, McBride says. As technology advances and evolves, scientists don’t need a blueprint for an invention, they can build on knowledge that’s already there through research and reverse engineering.
McBride suggests that anyone who has a patented product with mass–production potential get confidentiality agreements signed by the maker of the mold and the manufacturing company. If a small business or individual wants to sell an invention to a company of larger size, McBride says, a big corporation might not be the best choice, as they seldom agree to sign confidentiality agreements. Mid–size companies can be a better choice as they are more likely to sign such agreements.
<br/ > —Susan Ladika