Why do you want a Patent?

By Gene Quinn
December 8, 2018

Why do you want a Patent?Obtaining a patent can be the best business move you could ever make. On other hand, it may wind up costing you time, energy and a lot of money that you didn’t need to spend. The investment placed into getting a patent may be wise, but it is important to realize that no one is simply going to show up on your doorstep with a money dump truck and unload lottery like winnings onto your stoop. The road to riches in the invention world is hazardous, has many detours and seldom goes as planned. That is why the first question you absolutely must ask yourself before you rush off to your friendly neighborhood patent attorney is this: Why do you want to get a patent?

The unfortunately reality is that most patents do not make inventors money. When I first started out in the business, estimates were that perhaps 2% of patented innovations made money. That estimate has grown over the years to anywhere from 2% to 10%, but this increase isn’t due to the fact that inventors have gotten so much better, or much smarter, but rather is a function of the massive portfolio licensing that goes on at the top of the industry. It is extremely difficult to know which patents out of a portfolio are the ones worth acquiring, but you likely don’t have to spend time wondering because if you want to license the valuable patents you probably have to take a license to the entire portfolio. So even by the bloated estimates you might hear today, the underlying reality has not changed. No more than 2% of patents individually would be considered viable money making propositions.

Of course, the trick is knowing which 2% of inventions are going to be the ones that make money. Hindsight is always 20-20, and because of the rules of the system it is necessary to take initial steps to file for protection by at least filing a provisional application well before it is known whether an invention is likely going to be a critical asset that supports a viable money making proposition.

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When you come up with an invention you are very proud, and seeking validation at the USPTO can be exactly the stamp of approval you need and want, and today given the fact that the U.S. is a first to file system filing quickly is absolutely required. But before you race off to file a patent application and start spending money with an attorney you need to have a business plan, or at least an outline. What are you going to do with the patent once you get it? Are you going to attempt to license the rights so that you receive a stream of royalty income? Are you going to manufacture the product and sell it yourself? Are you going to start to manufacture and sell the invention in order to prove the market, but really hope to find a licensing partner after you have proved that a market does exist? Are you going to frame the patent and hang it on your wall? Knowing what you want to try and accomplish with the patent will go a long way to determining the proper strategy to follow.

The question should not be whether you can get a patent, but rather whether the one you can obtain is worth the investment. In other words, is the scope of protection meaningful? Getting a patent is relatively easy if you are willing to take extraordinarily narrow claims. By layering on enough specifics together into a claim you can turn practically anything into something that is new and not obvious. Thus, the essential questions is for any inventor to ask themselves is whether they are going to actually be able to prevent competitors from making, using, selling and importing your invention based on the claims likely to be obtained? After all, the patent will not grant you the right to do anything other than exclude others. So, if the exclusionary right is too narrow the value of the patent is narrow, perhaps to the point of being worthless.

Of course, this is not to say that there is anything wrong with obtaining a patent for vanity reasons, to hang on your wall, to be a part of American history, to be an inventor. My uncle did just that. Initially he attempted to make money from his inventions, but time after time had no luck except for bad luck. He was still a very proud, patent holding inventor. Something can be said for that, but generally speaking for most inventors the goal is going to be to make money, which means to invest wisely, and only so long as the project seems likely to potentially lead to business success.

This phenomenon is best illustrated by looking at the pharmaceutical industry. They spend millions and millions of dollars obtaining patents before they ever know whether the Food and Drug Administration (FDA) will allow a product to be sold. But once it becomes clear that a drug will not gain approval, or that it has not continued to prove out, it is dropped, funds are conserved and applied toward other inventions that show more promise.

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Another example for independent inventors might be the baby market. There are substantial safety regulations that need to be kept in mind if your invention relates to something to be used by children. So, getting a patent doesn’t mean you have the right to sell or market your invention, rather it means you have the right to prevent others from selling or marketing what is covered by your claims.

Another critical question is this: Can you realistically expect to get claims that would cover what someone else might want to do? If you are successful there will be people who want to copy you and take your market away. It is not personal, it is just business. Economics suggest that where there is money to make there will be new market entrants until there is no additional money to be made. You get a patent in large part to skew economic reality and prevent competitors from encroaching on your market.

Wrapped up in what we have been discussing is a very simple question that many inventors fail to ask. It is this: Is there a market for your invention? Frequent guest contributor and patent attorney Eric Guttag tells his clients that if they don’t know 5 people right now that would buy the product they probably should not pursue a patent. That is probably good advice. While many friends and family will not be supportive of even good innovations for a variety of largely personal reasons, we all know folks that are supportive. Go to the aunt or uncle that always bought whatever you were selling to raise money for school, for example. If they aren’t interested that might be a clue.

When you are considering whether to get a patent you absolutely must know what rights you will receive. As already discussed, a patent will give you the right to exclude others from making, using, selling and importing a product or process. Many will tell you (including Supreme Court Justices) that a patent is a monopoly, or provides a monopoly. This is simply not true and anyone who tells you this simply doesn’t understand patent law, or they don’t understand the economics of innovation, or they are severely generalizing to dumb down the concepts they are discussing.

The loose application of the pejorative term “monopoly” to the property right of exclusion represented by a patent is misleading. What the patent can do is allow you to prevent others from entering your market. This requires a strong patent with solid claims. Likewise, you need to have a product or process that others are willing to pay money to acquire or use.

It is a simple truth that a monopoly can only exist if there is or will be an existing market, or if you can create a market. Of course, creating a market is far more difficult, but might be necessary if your invention is a first of its kind. Think about the DVR. Why would anyone ever need to pause live TV? Once you have a DVR you figure that out pretty quick, but with some products you have to educate the consumer and create interest, which translates into demand and ultimately into a market. Most inventors never need to go that route because they have created an improvement or a gadget that, although new, obviously does something more easily.

To characterize a patent as a monopoly without first questioning whether there is a market for the underlying invention is to put the cart before the horse. Those patents that are litigated are litigated because there is money at stake and, therefore, a market does exist. Nevertheless, there are a large number of patents that could never possibly have any market and could never be considered to yield a monopoly. If you doubt this take a look at the Museum of Obscure Patents. It does no good to perpetuate the myth that all patents are monopolies. It is simply not true. So thoughtful consideration needs to be given with respect to whether a market actually exists, how large the market is and whether the invention can compete within the market.

As with many complex systems in life there is no single correct way to move forward. The goal should be to move forward in a business responsible manner. That means that there are a number of things that you need to work on simultaneously. You need to figure out whether the invention can work, perhaps with a crude prototype you build in your garage of basement. Then you probably want to consider the business questions posed here to determine whether it makes sense to move forward. If it does then the next step really should be a professional professional search because if there is no opportunity to get rights, or the anticipated rights would be quite narrow, that has to inform the business inquiries. Of course, it is also important to know that the business inquiries are not a “one and done” thing. The road to riches will take time, money and energy. It only makes sense to continue to invest time, money and energy so long as the project continues to make business sense, so periodically reevaluate the business questions as you progress from step to step.

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Happy inventing!

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 14 Comments comments. Join the discussion.

  1. Dave Savage December 9, 2018 8:33 am

    Gene, Your nice article barely mentioned litigation in defending a patent. There are so many ways that a competitor can go around a patent or create something that provides a similar benefit in a different way. 98% (my estimate) of independent inventors can’t even afford the warning letters from an attorney, let alone any court proceedings or the time and travel expense in defending a product.
    Your list of additional articles below this one did not include any outlining a list of the many types of possible direct and indirect expenses, lengthy proceedings and ways a company can cause an inventor to give up. How about a lengthy article on this topic, with examples from your experience?
    (i.e.the cost of hiring experts to give court testimony)

  2. Ken Foster, Ph.D. December 9, 2018 8:52 am

    Another great column by Gene, since I stumbled onto his columns from a google search several years ago I’ve been steadily following him and have never found his advice off in the least little bit. I am not an IP attorney but I’ve worked in IP in roles from product developer to R&D Director and have managed patent portfolios of 250+ patent families in over 30 countries. I also have invented and sell my own products as an individual inventor. BE very cautious with “invention companies”. Many are not worth it and others are just scam operations.

    Here’s some advice before you get to far into the patent process from someone that is doing it today.
    1) Make sure you know the market and the needs of the market – what’s the next best alternative?
    2) Put the invention into its best form – make prototypes sufficient to test out your concept. They don’t need to be perfect but close enough.
    3) make sure you have a clear eye on how you might manufacture the invention, the cost and the potential value you can get for it (Retail price). If you can’t make money don’t move forward. You need to be able to get 3X to 5X the cost of goods (COG) landed to get a good return on your idea. Their are many other customer acquisition costs.
    4)make sure you understand the regulations space and consider a formal “right-to-practice” opinion.
    5) find a competent and experienced attorney and have a full explanation of all of the above especially 1-3. Then they will have the information to write a solid provisional patent application and put you in the best footing ever. ALSO – pay for the professional patent search. It’s worth it.
    6) At this point if you still want to move forward and understand the cost start putting together a good business plan with a strong understanding of how you might go to market. Find others and learn from them.
    7) go back and find a list of Gene’s articles and read the relevant ones to you. Lots of great information there.

    Good luck inventors.

  3. Michael Palmer December 9, 2018 9:13 am

    Thanks, Gene. This post deserves wide distribution. I’m working on an introductory course on Legal Risk Management for Startups, which includes a section on intellectual property. I will include a link to this post, which is particularly valuable for the links to the other posts, which together constitute a good introductory book on the subject.

  4. concerned December 9, 2018 10:44 am

    My attorney advised me that only 3% of the patents make money and he had me sign an acknowledgement of that fact.

    I pursued a patent, that has been rejected, to ensure the tens of millions in investment required by my idea. Three Fortune 100 companies have expressed strong interest and even said they were excited by the promise of what it could deliver. “THE” Human Resource Director of a fourth Fortune 100 company had promised to donate his time and expertise to scale the idea across the nation, his brother has a disability which is the target group served by my patent. The patent rejection has diminished the interest in my idea substantially.

    Before we can do our jobs, perhaps the USPTO needs to understand the reason for their existence as much as I understand the reasons why I pursued the patent. I am told that my patent examiner only approved 2 patents out of 114 applications the last 12 months. Really, a 98% rejection rate on top of a 3% chance of recouping any investment!

    Mr. Quinn: Thank you for your efforts to wake up the USPTO as a lot more is on the line than financial gain.

  5. Gene Quinn December 9, 2018 1:32 pm

    Ken-

    Thanks for your kind words, and for your good follow up list. If you have any interest in expanding this into a full article please let us know.

    If interested, best way to contact us is via this link: http://www.ipwatchdog.com/about/contact/

    -Gene

  6. Pro Say December 9, 2018 8:40 pm

    Gene — thanks for yet another excellent article.

    Dave — great idea for an article. Hope Gene (or one of his excellent current — or future — contributors) takes you up.

    Ken — please take Gene up on his offer. Would be very helpful to 100s if not 1,000s of other current and future inventors. And if you ever put it all in a book, I’ll be first in line to buy it.

    Concerned — have you filed your opening appeal brief yet? Also, keep an eye out for — as Gene has discussed — the forthcoming new PTO eligibility guidelines (Gene — any indication of when they’ll be issued?).

    And keep fighting the good fight.

    Like I say, I don’t give up, and I don’t go away.

  7. concerned December 10, 2018 5:20 am

    Pro Say:

    Attorney still working on opening brief, told me he will pay all the extension fees. I will send you and “B” a copy. Will the PTAB be bound by the Director’s “practical application” doctrine?

    I think there has already been enough case law to sustain my appeal, however, it seems from people on this forum that it all depends on what judges get assigned. The judges seem to pick and choose what part on the court decisions they want to apply. EPG, McRO, Alice, Bascom etc all support my application…concrete steps, individually and in combination, to solve a technical problem rooted in the Social Security computers that have been beyond the reach of experts/professionals. Even the author of the upcoming book containing my story stated I narrowed my claims to appease the examiner,yet to no avail. He also stated this was the story he was looking for to tell.

    Thank you for all your guidance!

  8. Michael Palmer December 10, 2018 6:57 am

    @ Concerned: “The judges seem to pick and choose what part on the court decisions they want to apply.”
    That describes the American judicial system as a whole, not just the world of patents. It is the result of basic features of human cognition (not malevolence). Our challenge as legal professionals is to figure out how to reform the system so that it is less susceptible to cognitive biases and other factors that distort decisions.

  9. Annie December 12, 2018 9:23 am

    Great article and GREAT comments – thanks all.

    I am in similar situation to @concerned but at an earlier stage.

    We believe that we should get a patent around the clever bit of our product. We have not yet started on the patent process. In truth it will be hard for us to detect anyone pilfering our clever stuff (it’s a lot of maths) and anyway, we don’t have a spare $2m+ to defend even if we did. But, like @concerned, we’d like a tick in the patent box just to keep the investors happy and I can’t really see a way around that.

    @concerned’s story just makes me think “sod it, I’ll go home and play with kittens”. This inventing stuff is hard enough already. Grrrr.

  10. Gene Quinn December 12, 2018 10:33 am

    Annie-

    Do you have interest in only getting a patent in the U.S., or is your interest in getting a patent outside the U.S.?

    There may be ways you could file a patent application and keep it secret for years, keep it as a trade secret unless and until a patent of suitable scope is going to be issued. But to pursue that path you’d also have to forgo international rights.

    I need to write that article and explain I think.

  11. Ken Foster December 12, 2018 12:45 pm

    @Annie,
    One of the keys to defending a patent is you have to be able to identify when someone is using it. chemical process patents are one area that are difficult to identify and are often set up as “trade Secrets” (use a formal process).

    You bring up another good point that it can be expensive to defend a patent. TRX has an initial exercise product with a solid patent protection behind it. Early in its life it had to fight off a copy cat product. Steve Brachman has a good overview of it – http://www.ipwatchdog.com/2017/04/06/makers-trx-exercise-equipment-win-6-8-million-patent-verdict-willful-infringement/id=81674/

    Also this NPR walks through interview with Randy Hetrick (inventor of above) – it’s about 30 to 45 min but worth it. lots of lessons. https://www.npr.org/2018/08/23/641191433/trx-randy-hetrick

    @Pro Say thanks. I will follow up and write this up. I am working on a book on similar topic. Lots of great examples.

    Good luck inventors – it’s not easy but worth while.

  12. Annie December 12, 2018 2:19 pm

    Hi Gene

    Thank-you for taking the time to respond to me!

    We will be selling our product internationally. I am based in the UK. I haven’t quite decided if a UK (easier?) or US patent would best (sounds more impressive?) or both. And a while ago you put up another really interesting article on filing in China – something I wouldn’t have even thought about and I’d like to explore China a bit more (but I think that’s more about me indulging my curiosity when in fact a UK or a US patent would make more sense as that would be comfortable and familiar for investors).

    This is all very new to me and perhaps I am being over simplistic but this is how it seems to me:

    1. I need a patent in order to help us look more investable.
    2. I should to at least try and block someone taking our IP (the maths) but to do this I do not think I need multiple country patent cover because our maths is something that would be embedded into a product that would be sold worldwide – there is no such thing as a national product for the applications in which our maths could be used. So having one or two strategic national patents would effectively block the copier from selling their product globally.
    3. The maths I am speaking of is, I think, patentable as there is a patent for a similar thing but we have taken a different approach and which offers some additional features. Although I see now that that doesn’t mean a patent is a slam-dunk.
    4. This maths is pretty hard-core and just because we have written it down doesn’t mean many people will understand it. But of course there are clever people out there.
    5. It has a rather niche application which again narrows things down. But this is a growth area so actually I do expect more people to be working in this space, just not many of them.
    6. I do not think we would even be able to detect if someone was using our algos as they would be buried deep into an application in a product. I do not know how we would even monitor this, let alone be able to prove it (let alone afford to then litigate).
    7. Having a patent could be a very useful way to advertise our product and invite people to license it because it is such horrible maths. If I needed this kind of maths in my product I would, most definitely, first scout round for a solution I could licence rather than set my own team on it and hope they can solve it (and in an acceptable time frame).

    We had thought about first publishing a technical paper as that would establish prior art and then plucking up our fortitude to do battle for a patent.

    Sorry, as I read that back to myself it comes across as a bit of a hodgepodge of thoughts.

    Annie

  13. Ternary December 12, 2018 4:36 pm

    Annie, Math in patent claims in the US is very tricky subject matter and will almost automatically trigger at least one 101 (Alice) rejection. Take a look at US 9,485,087 which is in cryptography. The application was initially rejected over Alice, but was later allowed. When you read claim 1 you can see immediately why the Examiner rejected. The problem now is that in later challenges in Court, the patent may still be invalidated as being directed to non-patent eligible subject matter. An example are the Carl Burnett patents, wherein the claims do not even include mathematical formulas. Mr. Burnett overcame a 101 rejection, obtained a patent, pursued infringers and lost his patent in Court. (see IPWatchdog Post of Dec. 6, 2018).

    Once you publish a paper, presumably with the math explained and/or captured in pseudo-code, the cat is out of the bag so to speak. If there is an interest, people will find it and use it. You may be better off just describing in a paper what the product does, with some metrics and comparisons, without disclosing how you do it. However, selling efforts and publications before filing a patent application may nix your ability to get (or later assert) a patent.

    You may be familiar with the US Patent System. If not, one course of orientation is to find recent US Patents and Patent Applications (which are published in different public databases) in your field and review prosecution history in Public Pair. This will provide at least some indication what you can expect in the US.

    A warning: companies in the US are generally not willing to pay for an invention. Overall, it is cheaper for them, to try to invalidate a patent before the PTAB or the Courts. If they can circumvent your invention, they will. If they can invalidate cheaper than licensing fees they also will. So be extremely careful in what you make public.

    One way to get a “placeholder” in the US is by filing a provisional patent application, which is not published and expires in 12 months. It allows you the “patent pending” statement, which may be helpful with your investors and it buys you a year to consider other filing options.

    It seems to me that you need to have at least an orientation session with a patent attorney who is familiar with the US system and has prosecuted applications in your field and has overcome 101 rejections in the USPTO.

  14. Pro Say December 12, 2018 9:09 pm

    Annie — you are in dangerous waters. Very dangerous waters indeed.

    You need to follow Ternary’s prescient and sage advice.

    Do not do anything before you meet with an experienced (5+ years) UK / US patent attorney.

    Publish nothing. Talk with no one. File nothing, anywhere.

    Don’t talk to others about your idea / innovation.

    Respectfully, from the sounds of it, you don’t know what you don’t know.

    And there is so very much to know.

    Meet with a professional.

    Immediately.

    In fact, even what you say on blogs could come back to haunt you down the road.

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