Unveiling the Power of Patents: Why Entrepreneurs Should Prioritize Intellectual Property Protection
In this week's episode, I had the pleasure of hosting Amanda Oborne, the Managing Director of Ideaship Fund and former Executive Director of Oregon Entrepreneurs Network (OEN). Ideaship specializes in maximizing the value of innovation and companies by developing a strategic patent strategy that not only protects but also defines the future of their industry. With their extensive experience, Ideaship excels in refining and polishing innovations into patentable and defensible assets.
But what exactly is a patent, why is it important, and why should entrepreneurs care?
A patent is a government license or authority that grants exclusive rights and title to inventors for a specific period. It provides the sole right to exclude others from making, using, or selling the patented invention. Notable examples of patents include the Wright Brothers' patent for the airplane, Thomas Edison's patent for the light bulb, and Alexander Graham Bell's patent for the telephone.
The United States Patent and Trademark Office classifies patents into three types: Utility, Design, and Plant.
Utility patents are granted for new and useful processes, machines, articles of manufacture, compositions of matter, or any useful improvements thereof. They protect inventions like machines, articles of manufacture, and processes, including software. For example, Microsoft's software patent. Utility patents last for 20 years.
Design patents are granted for new, original, and ornamental designs of articles of manufacture. They protect the visual appearance of an invention, as seen in the iconic Coca-Cola bottle design. Design patents have a duration of 15 years.
Plant patents are granted for inventing or discovering and asexually reproducing distinct and new varieties of plants. They safeguard new plant variants, such as different apple or rose varieties. Plant patents also last for 20 years, but they are less frequently granted.
Here are five reasons why patents are crucial, according to Gouchev Law, New York:
Patents increase profits: Properly utilizing a patent can generate significant financial gains through licensing or market dominance.
Patents enhance company valuation: Intellectual property, including patents, plays a critical role in evaluating the worth of a company, particularly in industries like high technology or consumer products.
Patents create barriers to competition: Patents establish barriers that prevent competitors from directly selling similar products, offering smaller companies an opportunity to compete against larger corporations.
Patents attract investors: Having a patent or patent-pending status makes it easier to secure investment funding from venture capitalists or angel investors. It also safeguards against the theft of ideas during the pitching process.
Patents offer cost-effective protection: Despite varying costs based on complexity, patents prove to be a worthwhile investment given the potential returns they can generate.
The joint publication by the European Commission (DG Research) and the European Patent Office titled "Why researchers should care about patents" emphasizes that patents provide legal protection, enabling owners to prevent others from using, manufacturing, selling, or importing their inventions. This is precisely why entrepreneurs should value patents.
Protecting intellectual property through patents ensures the safeguarding of utility, design, or plant innovations for entrepreneurs. For assistance in this area, entrepreneurs can seek guidance from the experienced team at Ideaship.