Why it is important to take business aspects into account when creating your IP rights

When drafting a patent application for an invention, we patent attorneys often consider how to create the broadest possible scope of protection in view of the prior art. This is one of our main tasks, which requires skill and experience. However, this is not the only aspect that has to be considered. One other aspect that often is mentioned is the business aspect, but what does that mean in reality?

Well, for example it means that you should understand how the patent can support your business model, i.e. how you plan to earn money from your newly developed technology. It may be that you want to manufacture and sell products (components and/or systems), sell services, licensing out your technology etc. or a combination thereof. These different business models may require different types of patent claims, which highlights the importance of factoring in the business interests in the technology when drafting a new application.

In addition, another important business aspect to consider is the balance between risk and opportunities with respect to your newly developed technology. For example, it may be possible to define your invention in a very broad manner, also including other business areas than the one(s) that you initially were aiming at. If your patented technology in the end also covers such other areas which are outside your intended scope, it may increase the risk that your patent is challenged in an opposition and/or invalidation trial. Thus, before aiming for a large patent scope you should understand the possible consequences and evaluate if you have the financial muscles to handle a possible invalidation process.

Another aspect to consider is the effect your patent may have on the market. It is well known that a patent provides a monopoly for a certain time period and thereby hopefully gives rise to a competitive advantage. But what if your monopoly means that intended customers are not willing to accept the new technology? It may be seen that the technology is “too new” and older technology still works sufficiently, the increased price for the new technology is considered too high, the customers are not willing to only buy from one supplier etc. A solution to some of the aforementioned scenarios could be to offer licenses to your competitors to thereby open up for more players on the market. However, in some industries and/or situations this may not be possible even though it could be seen as the most preferred alternative. Another way to handle this could be to design your patent in a way such that competition also can enter the new area and therefore increase the likelihood that the new technology will get a better acceptance on the market when introduced. The patent may for example focus on a differentiation of the new technology but open up for a free space for the competition.

To sum up; when designing your patent application, business aspects are as important as patentability aspects, if not more important. And more specifically, the more you know about your intentions and how you want to and can earn money on your new technology, the better patent protection you may get in the end.

// Marcus Gentzel