Patent Strategy—Basics and the Bigger Picture

Abstract

215 PATENTS AND PATENT STRATEGIES are playing a bigger role in technology businesses of all types. In order to compete, some companies are acquiring interests in other companies having the expertise needed to enter new markets, while others are entering into partnerships or collaborating with former competitors. In this setting, businesses are using patents as a weapon to hinder competitors from encroaching upon their developed technology, and as a shield to deter others from forcing them out of a market via patent litigation. Businesses are also using patents to increase their standing in dealings with other organizations, and even to increase their income. Patents can play a key role in corporate tactical and strategic planning. They can and do affect small and large businesses positively and negatively, and it is important for executives and managers to learn what might be done to accentuate the positive and hinder the negative. Patent law and patent strategies are business goals, not just legal issues. It is important to recognize the significance of patents in relation to the business, and incorporate a patent strategy in short-term internal business planning and in long-term corporate strategic planning. Upper-level management and executives will need to work with patent counsel and make patent-related decisions. For example, it may be necessary to decide whether a patent infringement study must be performed; whether the budget for patent matters should be increased or decreased; whether attempts should be made to license certain patent technology; and whether the firm should sue a particular company for patent infringement. Before describing how patents play a role in strategic and tactical planning, it is helpful to first distinguish patents in relation to other types of property. Property rights give an owner some type of dominion or control over something. In many respects, property rights serve as an incentive for the owner to invest in, or add value to, something. For example, real property rights may give an owner dominion over land. Because the owner retains control over the land, the owner may invest time and effort to improve the land and then reap the rewards of that time and effort. Intellectual property rights provide persons with dominion over ideas or information embodied in a form worthy of protection. Some intellectual property rights are trademarks, trade secrets, copyrights, and patents. Trademarks (or service marks) give their owners dominion over how they identify their product (or service), so the owner need not fear that others will use an identical or confusingly similar name. An example of a trademark is the brand name “Coca Cola” used to identify a carbonated beverage. Trade secrets give their owner dominion over valuable “secrets” properly guarded by the owner. An example of a trade secret is the recipe for the Coca Cola brand beverage. Copyrights give their owner dominion over the way an idea is expressed in some tangible medium. An example of a copyrighted work is a book, movie, or song. U.S. patents