Not all ideas are good patent candidates - Law - Brief Article

USA Today (Society for the Advancement of Education), April, 2002

Not every idea, product, or process invented by a company is a good candidate for a patent, maintains Jeffry W. Smith, a patent attorney with the Madison, Wis., law firm Lathrop & Clark LLP. "Each original idea, product, or process must be carefully screened in order to determine whether a patent can provide the right kind of protection. Obtaining patents that cannot be policed or spreading patent resources too thin can be counterproductive. Other options may be more prudent." He suggests that the following factors should be considered:

Competitive advantage, "Patents give a company the right to exclude others from making, using, and selling an invention. If an invention provides a competitive advantage, patent protection should be considered. A patent will prevent competitors from copying the invention. They will be forced to compete using dated technology."

Manufacturing techniques or business methods. Other types of inventions can provide a competitive edge to companies. "A manufacturing technique or business method that reduces costs or improves service can improve profit margins. These methods should be considered for patent protection. They can provide a competitive advantage even when the product itself has not significantly changed."

Safety measures or devices. Inventions that make products safer for consumers, or safer to manufacture, typically are candidates for a patent. "Such patents can be extremely valuable, especially when an industry adopts that safety idea or invention as a standard or regulation. When a required safety device is patented, it can provide a significant advantage over competitors [since] a patent would exclude competitors from using such a device in their products. In addition, a patent on a safety device can result in significant royalties from licenses to companies that must use the safety device in other products."

Revenue generating ideas. Inventions that can be licensed to third parties are good candidates for patents. "Patent licenses can generate significant revenue. However, an upstart technology company may not have the ability or the resources to exploit an invention. If patent protection is obtained, ideas or products may be licensed to larger companies or companies with a different area of expertise. In fact, for some companies, the fees they receive from patent licenses are their only source of revenue."

Not all ideas are strong candidates for patent protection, Smith points out. "For example, if a company has a new method of manufacturing a product, it may be more beneficial to protect that idea as a trade secret. Patents have limited life spans--less than 20 years--while trade secrets can last indefinitely."

He cautions that a trade secret is protected only if certain safeguards are in place. "Confidentiality agreements, locked drawers and cabinets, and computer passwords are among the tools that should be used to prevent disclosure. Procedures must be in place to ensure that trade secrets are revealed only on a need-to-know basis."

In some cases, a well-kept trade secret can be more valuable than a patented idea. "A patent application can reveal information helpful to competitors. When a product is improved in a way that cannot be reverse-engineered by third parties trade secret protection could be more effective."