Patents – Get the Facts Right Part 1

concept of investing in their ideas - piggy bank - bulbIt’s so easy to get caught up in the hype about patents that you somehow lose the understanding and the truth of what they cover and don’t cover, what they’re worth and not worth and when they’re needed and not needed. Everyone has an opinion and you soon learn that not everyone knows what they’re talking about. Here are some misguided “truths” about patents to help you along the way.

  1. There’s absolutely no competition out there for my business plans, so there’s no sense in spending money to patent any part of it.

There is always competition out there. There may be no similar technology, but there are many things that can perform the same function. One of the most beneficial things an entrepreneur can do to continually outpace the competition is to trade marketing strategies, customer-retention ideas and tips with other entrepreneurs

  1. It takes a long time to license a patent, and I need to show some profit.

Allow it takes some time to get your product patented, you can do some things on your end to speed up the process: Apply online, do prior art searches, make sure your application is complete and check on the status of your patent application. It may be too early to publicize profits, but you can talk about how you’re different from competitors and why you’re the leader in your industry.

  1. What if I change my business focus? Won’t the money I invested be wasted?

Everything has value. You may not make money from a patent by applying it yourself, but you can pursue licensing royalties. To determine where you stand with respect to potential revenue, to a comparison of Cost-Plus Pricing and Demand Pricing. Then ask yourself, “What cost savings, what productivity increases, does my product provide?”

  1. When I brought my idea to the table for a brainstorming session, everyone there now gets to put their name on the patent.

First off this is not true. However, if you are the inventor yourself or a partner in the business, royalties from patent licenses generally go to the company, not the employees who came up with the invention. The company is the assignee-the person or legal entity that has actual ownership of the patent.

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