As you might recall, the first lesson I learned in practice is that it’s hard for companies to find good patent-business advice when most patent law firms focus primarily on patent prosecution. The second lesson I learned is closely related to the first lesson, and it is this: most companies don’t care about advice so long as they get a patent. So, to be fair, it’s hard to fault patent law firms for not giving advice when a majority of their clients don’t ask for it, and in some cases, don’t want it.
This lesson hit me when I was talking to one of my trusted “advisors”, a Chicago patent attorney who was coming east to meet with his clients. I told him that I would be happy to see him when he came to town, and I asked him how many other clients he would be seeing on his trip. His answer surprised me. Not many. It turned out that most of his clients didn’t want to meet with him in person. The prevailing feeling amongst his clients was, so long as the work gets done (i.e., patent prosecution) what else is there to talk about. Wow! Not only would his other clients miss out on a fabulous meal, but the opportunity to really talk with their attorney. (A big mistake!) At the time, I was really shocked by this, but now I just know that it’s par for the course.
I think my friend’s story is very typical. I am totally convinced that most companies don’t know why they have patents, so they don’t know what else to discuss with their patent attorneys. They don’t know what to do with them. They don’t have a strategy for them. How many patent attorneys out there know of at least one client who has a good case for patent infringement, but your client won’t even try to engage in licensing talks or send a cease & desist letter? Companies spend hundreds of thousands of dollars on patent prosecution to have their patent assets gather dust sitting in a drawer, or at best, hanging in a frame on the wall. Why do companies do this? It’s an expensive case of keeping up with the Jones’ or following the herd. Everyone else is getting patents so I must need them too.
Getting patents for the sake of having patents is one of the legacies of the dot.com boom. Start ups popped up everywhere (at least in Cambridge, MA where I worked at the time) flush with VC funds and lots of patents eager to create the “new economy”. Some thrived and pushed the economy in new directions, but most didn’t survive. Why not? These paper millionaires sitting in their hammock rooms failed to see that the rules of the old economy were, and still are, very much in play. Cool technology minus a good business plan = failure. In the dot.com world, potential investors wanted to see hard intellectual property assets before they would decide whether or not to invest in a technology or company. It became all about the technology (and the patents) and not so much about the business plan. And the dot.com boom went bust.
What survived and thrived was a new importance placed on patents and intellectual property in general. Patents became trendy, and part of the new corporate buzz. It’s what companies do. Everyone wanted to be part of the new economy, and having patents made you part of the “in crowd”. Let’s face it. Everyone wants to be the next Google, eBay or Amazon. Part of their success comes from their strategic use of patents. And it’s the same for industrial companies like Honeywell, Motorola, and 3m. These companies use patents successfully to enhance their business. What these companies do that the average company does not is manage their intellectual property. They don’t have an IP plan. Most companies are convinced that they must get patents to cover their technology, still failing to see that without a plan, their patents are not very valuable.
Now don’t get me wrong. I am not saying that a company shouldn’t protect its inventions with patents. I am a huge fan of patents. Patents are powerful business assets when used properly. I’m simply saying that a company should know WHY they are getting patents. And frankly, “because everyone else is doing it” isn’t a good answer. (It didn’t work on your parents when you were in high school, and it doesn’t work now.) What I am saying is that to be successful with patents a company needs to recognize that their intellectual property is a business asset and can be used to enhance the company’s bottom line if it is managed like any other business asset.
I don’t know of a company that would buy a fleet of trucks or manufacturing equipment to sit unused in a warehouse indefinitely? When a company purchases equipment, it presumably asks questions and assesses its overall needs. A cost-benefit analysis is performed. In the end, a reasonable decision is made. So, why then do some companies spend money on patents that they have no idea what to do with? My simple answer is that they don’t view a patent in the same way they view their office equipment, tooling, or trucks, and therefore do not perform a similar analysis when making decisions about their intellectual property. Why not? They don’t know any better.