"PATENTS ARE BUSINESS TOOLS. THEY MAKE MONEY."
Patent questions are now critical in many commercial and financial transactions. Patent royalty revenues have become significant sources of revenue, patents are more often enforced when litigated, and judgments for infringement can now exceed US $1 billion. For example, in 1990, Texas Instruments Corp. reported that its revenues from patent royalties exceeded its revenues from manufacturing. Its intellectual property management program had become a lucrative profit center. Are you maximizing your returns from your intellectual property assets?
Patent Strategies for Business, Third Edition, is the updated classic guide for the use of patents as business tools. The new Third Edition re-evaluates patent law for the business executive, general counsel, and patent counsel, from the point of view of achieving patent profits in a cost-efficient manner. The book is a tool for the reader, presenting new ideas and strategies that have been successful for others. The book was developed from scores of actual transactions with real corporate clients.
Patent Strategies for Business, Third Edition, details the new rules for inventing-on-demand, inventing around your competitor's patents, strategic management of patent portfolios, and due diligence for the investment grade patent portfolio.
Patent strategies for specific industries are also discussed including : Internet services, software, telecommunication services, financial and insurance products, and medical devices.
"Patents Are Business Tools
This book is designed to be a tool for the reader, to present ideas and strategies that have been successful for others, and that will be successful again. This book is not an academic treatise or survey of the entirety of patent law for the patent attorney specialist. It should, however, be useful for the patent attorney, since the book explicitly discusses important strategies and concepts that are seldom analyzed in print. Current legal developments and their practical applications are also discussed.
The approaches in this book have grown out of specific transactions with specific clients, so we are confident that the ideas in this book have passed at least their trial runs in the real world. However, we have been careful to keep all the discussions here on a generic level, so that no confidences regarding any particular party are revealed. Any references to specific companies or individuals in this book communicate only information that is disclosed in the public record, and which involves parties that this author has never personally represented.
There are several major trends in patents in the last 10 years that have revolutionized the patent business, and which we expect to continue for the foreseeable future.
Patents were made more enforceable, and appellate law uniform and more correct by the creation of the Federal Circuit Court of Appeals in the mid-'80s.
Also, software and computer applications have been determined to be patentable technology, if they are new and not obvious. The result is that in more and more industries, more of the innovation is in the form of patentable software applications. This has lead to the shocking application of patents to new areas such as telecommunication services and financial investments. Also, we may be about to see the rise of business method patents, to a par with the current patentable status of all other man-made processes and methods. At the least, we can expect for software patents to become a factor in most industries in this decade.
Patents are not just for gizmos anymore.
We are also seeing the globalization and harmonization of patent law across our planet.
These developments have greatly increased the power and value of patents. Consequently, patent questions are now critical in many commercial and financial transactions. Judgments for patent infringement are bigger (Kodak recently paid Polaroid almost $1 billion for patent infringement, and Litton more recently received a judgment against Honeywell for $1.2 billion), and patents are more often enforced when litigated. It has also been reported that Texas Instruments has received more revenues in some recent years from its patent royalties than from the sale of its products. This has put more pressure on management to develop their patent portfolios, and to avoid infringement. It has also put pressure on Congress to fix the ownership section of U.S. patent statutes (see the appendices herein for one proposed bill).
As a result, financiers are now beginning to do real patent due diligence, and are looking for patent attorneys who can do a deal.
With the first appearance of biotechnology companies, the courts have agreed that man-made life forms are patentable.
We have also seen that copyright can be used to obtain some protection for software. However, copyright protection is weak compared to patent protection for software (when you can get a patent). The unique overlapping nature for copyrights and patent rights for software require that both sides of this ownership coin be attended to for software.
We have also seen case law develop and clarify the legal side of inventing around a competitor's patent (a process of legal development which is still continuing). This makes the invent around process more reliable and practical. Also, this in part enables what we personally find to be the most exciting innovation of this book, which we call the Rules of Virtual Genius.
Inventing and patenting are two different things that are part of a larger commercial effort, to make money from new products and services. Surprisingly, current developments in technology and law are actually working in the same direction, so that good inventing can facilitate good patenting, and, most unexpectedly, good patenting can facilitate good inventing.
We also have found that the Rules of Virtual Genius, described for the first time herein, are teachable to most business and technical people, and lessons on this subject can inspire profitable innovation.
We also have seen since the late '80s that applications at the U.S. Patent Office have been growing at about 15% per year, while software applications have been increasing at about 30% per year.
