Three root causes why most patents never generate a Nickel of revenue (article 5 of 5)

The Need for a Point of Novelty

In this final article in this series, I present the most powerful solution that I have witnessed in my 15 years of patent experience serving A-list clients, such as Apple, Google, Honeywell, Intel, Atmel, Hallmark, Gillette, and hundreds of other smaller enterprises.  

To recap on the failure mode discussed in the prior articles, most patents fail to generate a dime of revenue because they are drafted and prosecuted using a conventional process that simply fails to plan for success in all 3 patent lifecycle phases:

1. Before filing in the Patent Office
2. In the Patent Office, and
3. After the Patent Office.

Many law firms appear to attract clients with low initial costs to file a patent.  However, lower costs imply shortcuts.  Shortcuts in preparing your patent application is not the winning formula for creating a valuable business asset.  When you take shortcuts in the critical phase before filing in the Patent Office, do not be surprised by delays, frustration, rising back end costs, and for little or no return on investment.  In fact, shortcuts make it much more likely that the entire process will make your patent one more dead letter adding to the majority of patents that never generate a dime of revenue!  

The most systematic, reliable, and predictably effective patent process that I have witnessed involves up front due diligence in Phase 1- Before filing in the Patent Office.  Properly executed, this extra due diligence will more than pay for itself in each of at least four ways.  I describe that solution in detail in my book, “Patent Offense.”  But in order to really grasp the advantages of that solution, it is important to appreciate the subtle problems and its hidden costs that are orders of magnitude more significant than any savings that might be found in the initial cost of filing a patent application.   

The KEY: Plan for Success In the Patent Office 

The Patent Office is where the patent game is won or lost, but the ultimate outcome is actually determined before the application is filed in the Patent Office! 

Before you file any patent you absolutely want to ensure that you have a good point of novelty in the claims.  Failure to do this one essential step is frequently the cause of massive misallocation of resources in the form of wasted time, effort and frustration, to include both over-investment and under-investment in patents.  At its core, the frustration arises out of failure to plan for success in the Patent Office (PTO).   

The PTO will not issue a patent until the claims recite a Point of Novelty!  That is why early clarity about whether you even have a point of novelty is so critical, because you must have it well described in the patent application before it is filed or the entire investment will eventually be scrapped.   

The pain of cost, delays, and loss of value you will experience are proportional to the extent to which the patent attorney drafting the claims is not crystal clear about your Point of Novelty.  It is simply too slow, expensive, and risky to effectively delegate this critically important step to the PTO!  However, this is exactly what is happening in far too many cases.  Clients need to consider that failure to define a clear point of novelty generates repeat business for law firms, yet it produces an unnecessarily heavy price tag for an inferior performing result in the form of a patent that is weak (or perhaps even abandoned).   

Failure to Plan for Success After the Patent Office 

After the PTO, when the patent is enforceable, the patent drags with it all the baggage that was created in the PTO.   The value of the patent is largely fixed, and very little flexibility remains to recover lost value due to unnecessary claim scope narrowing while on a months or year long quest to find a PON going round after round in the PTO.  

By far the largest costs of a poor patent process are silently felt after the PTO.  These costs manifest in the form of lost opportunity costs to the business, including:   

1. Lost revenue: 
   a. during avoidable delays in becoming enforceable; and,
   b. during unnecessarily shortened effective patent term; or, 

    

2. Lost potential lifetime value due to: 
   a. unnecessary claim scope narrowing; or,
   b. failure to effectively describe the most valuable aspects of the PON.   

As described in the prior articles in this series, these opportunity costs can easily reach 7 figures or more!  

The most vexing cost involves any design arounds that are unnecessarily added to the public record.  In essence, you pay more for sub-optimal patent protection, including paying for your attorney to put concessions that may constitute “design arounds” into the public record, where your competition can find them to see a clear roadmap for all the ways to avoid your patent!  Ouch!! 

The Solution: 7 Step Strategic Patent Assessment   

As shown in the above chart, the 7 Step SPA process is organized in two phases:  

1. Patentability Issues:  Identify what PON can I patent (if any)? 
2. Business issues: If I patent that PON, how will I make enough profit to justify a patent? 

I venture to say that no one is getting answers to these two specific questions for their clients, not to mention all 7 steps of the SPA.  In the last several years, I have found these questions to be extraordinarily valuable in getting more valuable patent protection, faster, for less. 

Strikingly, we found that roughly 30 % of the time, the 7 Step SPA leads us to recommend the client not file a patent! And the client is empowered to make their own informed decision in order to make that determination.    

The 7 Step SPA is the best process I have (yet) devised to minimize time delays and loss of value in the PTO, while maximizing the business value of the resulting patent asset.   

Bottom Line for Business

Weak patent processes ruin the potential value of fantastically valuable ideas all the time!  

No great idea can withstand a poor patent process! 

To the extent that a patent that is not constructed *from the beginning* like a valuable business asset, it is not likely to resemble a valuable business asset where it counts– on the Income Statement and the Balance Sheet. 

And in order to become a valuable business asset, a patentable idea must be successfully processed through the PTO.  What happens in the PTO phase determines how valuable that patent will be.   

After the patent is filed in the PTO, it is too late to make add or clarify missing information.   

Thus, winning the patent game depends on what happens before the patent is even filed!  The best way to win is to start every patent process is by following the 7 Step Strategic Patent Assessment, because the 7 Step SPA generates a plan to succeed in every phase of the patent lifecycle!   

If you would like to discuss how to dominate patents in your business, you can call my office at 512-649-1046 or click below to schedule a complimentary Patent Needs Assessment 

Have a Profitable Day!