A Better Mouse Trap: Patents and the Road to Riches

By Gene Quinn
September 28, 2013

Image taken from US Patent No. 6,655,077 titled “Trap for a mouse”

To paraphrase the famous quote of Ralph Waldo Emerson, if you build a better mouse-trap the world will make a path to your door. Of course, inventors and entrepreneurs frequently take this quote all too literally, thinking that if they make a better product theirs will sell and make them rich beyond their wildest dreams. Obtaining a patent is an important part of a commercialization strategy, but it is but one of the many steps along the road from idea to commercial success.

There are many different reasons why building a better mouse-trap is only the first of many steps on the road to financial freedom. First, there is no guarantee of financial success given by any patent office in the world. This is true even if you have a strong patent that covers a great product that enjoys robust consumer demand.  Unfortunately, many inventors operate under the misunderstanding that getting a patent is like owning Boardwalk and Park Place in the popular board game MONOPOLY. The truth is that turning an invention into cash is much more complicated than simply placing hotels on Boardwalk and Park Place.  Yes, a patent is an essential ingredient because without one you have no right to exclude competitors from engaging in competitive activities, but you must treat inventing as a business if you want to truly be successful.

Among the many truths missed by most inventors and entrepreneurs is the fact that it is frequently better to have a weak patent and the financial ability to enforce the patent than it is to have a strong patent and no ability to enforce the patent. In the United States, for example, a 2011 survey of the American Intellectual Property Lawyers Association finds that the average cost of bringing a patent litigation ranges between $916,000 to $6 million. For example, if there is less than $1 million at stake the average cost to litigate is $916,000, while if the amount at stake is between $1 million and $25 million the average cost to litigate is $2.7 million. When more than $25 million is at stake the average cost jumps to $6 million.  So even if you have very little at stake the cost of litigating can easily cost several hundreds of thousands of dollars even if you contract with a smaller firm that offers cost saving measures.

How then is the individual inventor or small business owner supposed to be able to meaningfully exploit the rewards offered by the patent system? The answer is that the small players in the game of “patentopoly” frequently see their inventions infringed and find no real recourse available because they cannot afford to even consider undertaking the financial burden that is a patent litigation.

Increasingly inventors and small businesses are seeking representation in patent litigation on a contingency basis. While still relatively rare, more firms seem to be at least considering such representation.  Of course, in order to justify the investment of time and energy, lawyers who undertake such contingency representation must only take those cases where there are strong facts, a solid patent and an infringer who can afford to pay patent damages.  The rise of contingency representation in patent litigation is becoming the great equalizer for some, and does provide independent inventors and small businesses with a powerful option to enforce their patent rights.  If you have a patent and believe it is being infringed you should at least talk to someone like Attorney Williams to see if you do have a case.  Having patent litigators on your side who get paid only if you prevail makes for a very formidable team behind you.

The costs associated with enforcing a patent is one reason why independent inventors frequently will seek to license their inventions or sell the invention and patent rights outright. Licensing executive Trevor Lambert of Lambert & Lambert explains what makes a good licensable product.

“There are three major things that need to intersect to make a licensable product,” Lambert said.  “First of all, you have the patentable side. Either it is patented or patentable, because essentially what we are licensing is intellectual property. Second, is the product marketable, meaning people want to buy it? Does it have unique features that people like, or need, or want. Lastly is it commercially feasible? That means that you can sell it, or make and sell it, for certain margins.” For more on this please see Licensable Products: The Patent, Marketability & Feasibility Test.

The graphic to the left really explains a lot.  There many inventions that can be patented, but the fact that you have a patent is not going to necessarily entitle you to great riches.  Indeed, many inventors make a critical mistake when they believe that there will be a market for their invention simply because a patent has been granted. The patent examiner is reviewing your patent application to see if the invention described consists of patent eligible subject matter (i.e., something that U.S. law will grant a patent on), whether the invention is unique (i.e., described so it is novel and nonobvious) and whether there is enough detail provided so that others can understand the boundaries of the invention (i.e., so others can make and use your invention after the patent expires). Thus, a patent does not guarantee a marketplace, and the truth is that without a market there can be no monopoly. In fact, without a market or reasonable expectation that market demand can be created it probably doesn’t make sense to proceed from the invention stage into the patent process.

A patent only gives the patent owner the right to exclude others from making, using, selling and importing. See What is a Patent? A patent carries with it no expectation for market success. Granted, if the product does have a market a patent can be a significant barrier to entry that insulates the patent owner from competition, but a patent in and of itself does not guarantee business success. A patent only dangles the opportunity to achieve monopoly profits. This is due to the exclusive nature of the right and the ability to be the only player in the market. Again, a market is necessary, which means a product that people are willing to pay for is a pre-requisite. In the absence of a product that people want, and the business acument to capitalize on a market opportunity, a patent will not result in riches.

[Inventors-Google]

There are significant hurdles facing inventors who set out to achieve riches. If it were easy everyone would be an inventor, and only few are inventors and even a smaller subset are successful inventors who have commercialized their inventions and are making a profit. The best thing any inventor can do is to enter the process with their eyes wide open, understand the challenges and know when they need to get expert help.

You can have the greatest invention in the world but if you try and do everything yourself from start to finish you will never succeed. Everyone has different skills and talents and expecting any one person to possess all the skills and talents necessary to accomplish success in this field is foolish. Indeed, inventors that hold on too tightly and believe they know best at every step nearly universally fail. Inventors who focus on what they do best and surround themselves with talented, reputable professionals to assist them succeed in far greater percentages.

For more information on this topic and how to get started moving from invention to patent to commercial success please see these articles:

  1. Turning Your Idea into an Invention
  2. Should I Patent Before Licensing the Invention?
  3. Financially Responsible Inventing: Prototype Basics
  4. A Beginners Guide to Patents and the Patent Process
  5. A Business Responsible Approach to Inventing
  6. Protecting Your Invention When You Need Help
  7. Patent Strategy: Laying the Foundation for Business Success
  8. Patent Searching 101: A Patent Search Tutorial
  9. Invention Services: Finding Valuable Assistance & Avoiding Scams
  10. A Limited Run: Testing the Market Without Going Broke

 

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. 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 5 Comments comments.

  1. Benny Attar September 29, 2013 7:19 am

    Gene,
    I think I see a problem in licensing a patent: If I obtain an exclusive license from an inventor, what happens when my competitor infringes the patent? The inventor has received his just rewards and might not be worried: I do not own the patent and cannot assert rights which do not belong to me. I think buying the patent outright is the better option. Can you elaborate ?

  2. Axel September 29, 2013 10:21 am

    Gene,

    I came across your post just as I was responding to a potential client’s question “how much a patent application will cost”. Your advice is right on. I think I will tune my message to include several thoughts.

    Dear potential client,

    Let’s not waste your money.
    1. Try to find out if you have made a patentable invention by doing some basic search.
    2. If you have invented something that is new, think about whether a patent will have any value.
    3. If you think your patent will be valuable, try to write down how it is different from what you found in step 1.
    4. File what you wrote in step 3 as a provisional application.
    5. Ten months from now see if your answers 1 through 3 have changed. If they have not feel free to spend money on my services.

    Regards
    Axel

  3. Gene Quinn September 29, 2013 12:56 pm

    Benny-

    There really is no one size fits all licensing contract. The issue about infringement and who bears the cost of pursuing and stopping infringers is really a matter of contract agreement.

    If an inventor is giving out non-exclusive licenses, for example, the revenue from the license agreement will make it possible to fund the fight against infringers. Also, if the invention is one that can be licensed by many and there are license agreements and ongoing infringement elsewhere that is the type of matter that could be quite attractive to a contingency litigator or one of the companies that works with inventors to license/litigate. Of course, Acacia is the biggest player in the space, but General Patent also comes to mind.

    -Gene

  4. Anon September 29, 2013 1:01 pm

    I will say that one aspect of Axel’s advice is the bane of my existence per provisional filing: the treatment of a provisional as something not on the level of a non-provisional.

    Step 4 needs to be seriously augmented.

  5. Pro Se September 30, 2013 10:17 pm

    Gene:

    You wrote “Attorney Williams” , but seems no additional info.