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Chris Griffiths

Know when to protect with a patent Add to ...

Patents are often seen as the ultimate protection for an innovative design, process or product. For some businesses, they are a key building block, but for others, they don’t deliver the desired result if they fail to produce a competitive advantage or if patent holders can’t afford to enforce their rights.

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I have been issued several patents over the years and found them to be extremely worthwhile.

For one, I thought they were a great marketing tool – “patented” sounded awesome.

As well, investors felt better knowing that my intellectual property was covered and that the patents were evidence that I offered something different than others. When someone unknowingly infringed on them, I was fortunate to be able to protect my patents with a simple cease-and-desist letter from my lawyer.

I eventually sold my patents, along with my business, to a third party with better commercialization capabilities than I had.

Along the way, who knows how many people developing a competing technology were dissuaded by my patents? Just having one often discourages most direct competitors.

Given my kind of experience, you’d think patents would be a home run for any business. But, in fact, they are not for everyone.

For one thing, they are expensive and time-consuming to obtain and enforce. There are many types, the most common known as a patent in Canada and a utility patent in the United States.

Either way, it is the most in-depth, thorough and expensive. It is meant to cover an innovative structure, function or process that has never been done before. You can expect to budget about $25,000 spread over several years to obtain such a patent in the United States, and a bit less in Canada.

The second most popular patent is called an industrial design registration in Canada and a design patent in the United States. It’s meant to protect the original appearance of a product’s design, not its function. It typically costs less than 25 per cent of a patent and is easier to get approved. But it still takes time and money to obtain.

Besides the time and expense, there are other considerations about how valuable a patent may be.

The most important may be how capable you are of defending it against someone who infringes on it.

After all, a patent is just a piece of paper that buys you the right to sue someone who infringes on it. If a competitor 100 times your size tries to encroach on your patent, you have to prove that in court. That takes even more time, effort and money.

Much more difficult to figure out, but still a consideration, is whether a patent really will provide a competitive advantage against something that others will definitely want. If you are the only one who sees value in protecting something, it doesn’t need protection. And then a patent may just become a distraction and an unnecessary expense.

“Know how your business can use a patent as an asset. You can buy it, sell it, enforce it or use it as security for a loan. You can also licence it to other companies for royalties.” says Noel Courage, a patent lawyer at the Toronto office of Bereskin & Parr whom I consulted for advice.

Just as important, “a small business considering patenting has to do a realistic cost-benefit analysis of the expenses, the likely patent scope and the potential value that can be generated,” Mr. Courage says.

If you are pondering getting a patent, keep these considerations in mind:

1. Make sure it will offer you the protection you need, and the competitive advantage that makes it worthwhile.

2. Be sure to keep your invention confidential during the process.

3. Hire a professional for help. Don’t try to do the process on your own.

4. Be prepared to defend a patent, and have the resources necessary to do so.

5. Revisit the benefit to your business so it continues to deliver on the first point.

“It is important to make sure the patent ends up [as]more than a nice-looking document on the wall,” Mr. Courage says. “Since most patents have yearly maintenance fees and need to be monitored, regularly revisit the cost-benefit analysis to make sure it still holds up as your business evolves.”

Special to The Globe and Mail

Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.

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