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Did you hear about Google's recent $1.67 billion settlement in a patent lawsuit? It really puts the spotlight on the high stakes of patent disputes. While this might be a minor setback for a giant like Google, it's a loud wake-up call to every enterprise about the importance of effective management of patent programs.
As the saying goes, "By failing to prepare, you are preparing to fail." This maxim fits perfectly in the context of managing a patent program, where the focus isn't just on creating defensive legal shields but also on strategically selecting which innovations to patent. Such decisions, closely aligned with business goals, are crucial for major players like Google to avoid litigation and are even more critical for startups. For startups, a strong patent portfolio can be the ticket to boosting their market value and attracting investors.
With this consideration in mind, let's look at how even slight mismanagement of patent programs can lead to significant setbacks.
Related: Top 5 Intellectual-Property Challenges Businesses Face
Can failing to protect an innovation be life-threatening?
Imagine it's the middle of the night. Someone with a known heart condition is sleeping, relying on their smartwatch to alert them to any dangerous irregularities in their heartbeat — a feature they trust like a lifeline. But without informing them, this very feature has been quietly disabled — caught in the crossfire of a corporate patent war. Suddenly, this isn't just about a watch failing to tick or a screen freezing. It's about a critical safety net being pulled away at the worst possible time. This isn't just a technological glitch; it's a grave misstep in corporate ethics. Decisions like these can shatter consumer trust and cast a long shadow over an enterprise's commitment to protecting its customers when they need it most.
A case in point is the lawsuit by Masimo, a medical technology company, against Apple for using their patented blood oxygen monitoring feature in two new Apple watches. Initially, Apple was asked to recall the product from the market, but in response, they decided to disable the feature to continue sales. This decision, while seemingly strategic, could have serious implications. Could a consumer who bought the product for the health monitoring features that was injured or even killed because the feature was removed file suit?
In the unforgiving world of intellectual property, even industry titans can occasionally err in determining which inventions to secure with patents or licensing.
Consequences of mismanagement of a patent program
For larger enterprises, a mismanaged patent program could lead to significant financial losses, weakened market position and increased vulnerability to litigation. Meanwhile, for smaller enterprises, the stakes are even higher. They may not have the resources to rebound from similar missteps, which could lead to disastrous consequences, including potentially shutting down the business.
Let's now take a closer look at these dire consequences of mismanaging a patent program and how they can be avoided:
Missed market opportunities
A common pitfall in patent program management is when your strategy fails to keep pace with your evolving business goals. As markets and technologies rapidly change, what's critical for your business today might not hold the same importance tomorrow. This dynamic can lead you to accumulate patents that no longer support the direction in which your business is moving.
Such misalignment can lead to inefficiencies and, more critically, missed opportunities in the marketplace. What's crucial here is to do the soul-searching regularly, reassessing and realigning your patent portfolio with your business goals. This means pruning where necessary and expanding where opportunities are seen, ensuring that your intellectual property supports your long-term business objectives.
Related: Unlocking the Market Potential of Your Patent Portfolio — A Guide for Entrepreneurs
Lost money on bad patents
Let's face it: It's challenging to predict which patents will add value to your business without understanding their market potential, which can be impossible at the time of invention. Many enterprises opt for a "shotgun approach," filing a broad array of patents and hoping some will eventually pay off.
This strategy is risky — "bad patents" can consume significant resources in filing and maintenance fees without providing any return on investment, cluttering your portfolio with non-valuable IPs.
To circumvent such issues, my approach with clients involves focusing on innovations with high commercial potential or protecting the most important products of your enterprise. I identify this by analyzing competitors' patent portfolios, identifying market gaps for competitive advantage and steering clear of saturated areas. Regular portfolio reviews and targeted pruning help remove underperforming patents, maintaining a lean and effective patent portfolio.
This strategy is crucial not only for established businesses but also for startups. Research indicates that startups with valuable patents are 10X more likely to secure funding, highlighting the significant advantages of strategic patent filings.
Compromised defensive value of patents
For many large enterprises, the purpose of amassing a robust patent portfolio is to use it defensively — to deter potential lawsuits from competitors. I have seen enterprises often believing, "If we're sued, we can countersue with our patents." And to do so, they build large patent portfolios by patenting anything and everything.
But what happens if your portfolio isn't strong enough? A lack of a solid defensive shield can leave you vulnerable to aggressive legal challenges from strong competitors in the market, which can be both costly and disruptive to your business operations.
To mitigate this, the strategy must focus on quality over quantity. It's not just about having many patents but ensuring that each patent is robust, enforceable and covers key technologies crucial to your products or the industry generally. This requires a strategic evaluation of both your own technological needs and your competitors' patent landscapes. Regularly assessing the strength and scope of your patents helps to ensure that your portfolio can effectively serve its defensive purpose.
Furthermore, engaging in proactive IP audits and seeking opportunities to strengthen your portfolio through acquisitions or in-house innovation can further bolster your defensive strategy. These studies can identify patents no longer relevant in the industry to avoid paying for further maintenance fees.
Related: The Basics of Protecting Your Intellectual Property, Explained
Patents are more than legal safeguards; they anchor businesses and impact lives. The story of Massimo's patent battle illustrates the stakes — safeguarding not just business futures but human well-being. It's important to ensure your strategy is robust, blending business goals with meaningful innovation. The right approach isn't just protective — it's a competitive advantage rooted in responsibility. Transform your intellectual property into a cornerstone of success and impact.
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