Patented Innovations Create the Future

The age-old question for parents of a teenager: it’s 10 o’clock Saturday night, do you know what your teenager is up to?  That Question strikes fear in every parent, mostly because parents were teenagers once as well (hard to believe, but true!).

Well, the same question can be asked about patents. It’s 4 years since your patent issued, do you know what it is up to?

Patent attorneys have an answer for this question that varies from the mundane: did you mark your product? Have you sent out any demand letters? Filed any complaints? Done any licensing? Paid your maintenance fees? To the disheartening: patents all worthless in view of the PTAB and a Supreme Court (and CAFC) that clearly hates patents, at worst, or doesn’t understand them, at best. Some patent attorneys gratuitously add: I am glad I am nearing retirement. Wow!

For the C-level people at the companies who have financed and invested in all the things patents are intended to protect, this sort of feedback does not give them much to work with in terms of planning the way forward. C-levels talk amongst themselves, and their MBA friends, and express uncertainty about the value of IP and what should be an appropriate metric, vis-à-vis their business objectives and realities, for expected expenses and ROI for IP in the US and around the world.

Let me provide another perspective and another answer. First off, be amazed at what the patent system has wrought. If you ever want a pick-me-up, flip through the first 50 pages of any recent Official Gazette from the PTO. Just look at what is issuing week-to-week. Astounding. The scope and creativity revealed in those pages is impressive. Simply put: These pages reveal the future; and, the owners of that future. Everything you rely on today, i.e., your phone, your monitor, your car, your pharma, your food prep and delivery, your mattress, your digital existence, etc., was conjured up and protected a decade back, when you were doing something else.  The folks doing the filing and protecting weren’t thinking about what the documents were doing, they’re too close to it for it to be revealed. This revelation, however, is easily understood once an observer is removed a little from the detail. You can see the shadow of the future before it emerges into view.

In addition, these patents spawn the alternative futures that can also come to exist. You see, people other than me read patents as well. I can relate anecdote after anecdote of client companies whose engineers have poured over the patents of others, and taken entirely different routes to a similar future. Also, patented. Which, in turn, led to more creativity, etc. They took the alternative route because they wanted to innovate, or were forced to in order to avoid an infringement complaint. You get the picture. Protected innovation sets the stage for more of the same. Unknown and unknowable to the originators of one variant, they are directly responsible for the emergence of more variants. More futures. The market will decide who chose the better path.

Who cares about the foregoing? All those C-level folks that you babble to about product marking, demand letters, and licensing revenue. They get that, patent people have been “dog-with-a-bone” about that stuff since law school; but that is the mundane. For now, what they see is the “hole” in the income statement, reflecting current IP spending. They read the popular press articles about “junk patents” and the S.Ct. cases too. And, they, and those they report to, are more consumed with participating in the “present”; being hatched from the IP eggs laid up about a decade back. The ROI on the present is straightforward: sales, cost of sales, cost of sold product plus delivery, present values, amortization, blah, blah, blah. Entire schools are dedicated to the “present” and near term.

But, what is the ROI on not being a part of creating the future, and not being present at that table? Easy: the “cost” of not innovating now and not protecting innovation now is the elimination of being a part of whatever it is that is beyond “now”. So, C-level folks, the ROI of not innovating, and not protecting that innovation with IP, means you won’t be a part of it; whatever “it” is. Maybe you do not want to be a part of it. If so, tell that to shareholders and other investors so that they, too, can get on board with your plans or sell your stock now before the present passes.

On the other hand, if you do want to be a part of what the future holds: Innovate, and protect, and be an owner when the future emerges into view. Don’t simply protect the winner, because you can’t know what it will be in the future. Protect broadly.  As a full participant in creating what will be, you can plan and predict, and look forward. For those who don’t, the future, at least one being any different from the “present” doesn’t really exist. I mean, I suppose you could still be using a “Walkman”, but I doubt it. Probably can’t find any cassettes to play on it anyway!