As a patent and trade dress owner, my favorite competitive advantage is intellectual property. There’s no better way to keep your competition at bay than with intellectual property that literally keeps them off the market, at least for a set period of time. It allows a business the time and space to make as much as they can in profit.
Intellectual property as competitive advantage
You don’t have to have a patent to sell a product, but having a patent as intellectual property does exclude others from selling the same product, and it gives you an instant competitive advantage. The patent gives your business a valuable asset, and the more the customer needs that product, the more valuable the patent will be. With a valuable patent you’re able to charge more for your product and increase your market share.
What is a patent?
The Patent and Trademark Office defines a patent as being “new, useful, and non-obvious”. For that reason, all inventors are innovators, but not all innovators are inventors.
Three types of patents
Utility patents are granted to inventors who discover or invent a new and useful process, machine, or software, or a functional improvement to an existing invention.
Design patents protect an invention’s design, shape or improved ornamental appearance. I was able to obtain a design patent on my wrist water bottle because of its unique shape. It’s a contoured bottle that fits on top of the wrist.
Plant patents are given to an inventor who has discovered or invented a new variety of plant. The U.S. Plant Patent Act wasn’t established until 1930. In order to be granted patent rights, the plant must have been asexually propagated. Rose bushes and apple trees are common examples of plant patents.
The patent process
Here’s what patent agent Allen Hertz has to say about the patent process:
Do all products need to be patented?
Not all products can be patented. You should try to protect your product utilizing any and all possible means, including patents, copyrights, trademarks, and even domain names. Each has its own unique benefits and limitations, and you should contact an intellectual property attorney for guidance, as each situation is unique. You need to insure that you’re not infringing on other patents.
What is a provisional patent, and should you start with that first or go straight to a regular patent?
A provisional patent is essentially a registration with the government that you have a product you are desiring to patent. This process allows you to continue development on your product while having some patent pending protection. There are some drawbacks that one needs to consider before filing a provisional patent. A provisional patent is not considered “a reduction to practice”, whereas a utility patent is. This could be a factor should you be involved in an interference against another inventor’s application. You could effectively gain up to one year of protection using this process. A provisional patent should really be written and submitted as close to a non-provisional as possible to ensure the non-provisional requirements are met.
Should you keep an inventor’s notebook, and does that give you any legal protection as the first person to come up with the idea?
Absolutely. Documentation is a key asset in the U.S. for determining rights and ownership. A proper logbook would be considered legally binding evidence.
When you do get a patent should you license it to your own corporation or not?
Each case is unique and needs to be considered as such. If multiple inventors are involved, the patent should be assigned to a company and the inventors should draft an agreement between themselves early on.
What happens to patent rights if you file if you file with someone else and the business relationship breaks up?
It’s critical to have things in writing from day one. The more that is discussed and documented in advance, the better the relationship will be long term.
How many people can you license your product to?
It can be an exclusive with one party or infinite numbers.
Should you give full license rights to one company or many different ones?
Each agreement is unique and needs to be considered on a case by case basis. One thing to remember, once you enter into a non-exclusive agreement, it is extremely difficult to pursue and exclusive agreement with another party.
If you want a strong and long-lasting competitive advantage in your business, having a patent as intellectual property is one of the best ways to do it.