By World Intellectual Property Organisation (WIPO)
Reasons for Patenting Your
What Happens if you do not
Patent Your Inventions?
Innovative and creative ideas are at the heart of most
businesses. Ideas by themselves, however, have little value. They need to be
developed, turned into
innovative products or services and commercialized successfully so as to
enable your SME to reap the benefits of your
Intellectual Property (IP),
particular, can be crucial for turning innovative ideas and inventions into
competitive products that significantly increase profit margins.
Your SME may also use patents to earn
royalty revenue by
licensing such patented inventions to
other firms that have the capacity to commercialize them. This may not only
save your SME money, but also provide you with a stream of income from your
invention or the inventions of employees of your SME, without the need to invest
in its commercialization.
For practical information on the costs
of patenting, the time taken for patents to be granted and other useful
FAQs, see link or contact your
National IP office.
Reasons for Patenting Your
Exclusive rights – Patents provide
the exclusive rights which usually allow your SME to use and exploit the
invention for twenty years from the date of filing of the patent
Strong market position
Through these exclusive rights, you are able to prevent others from
commercially using your patented invention, thereby reducing competition and
establishing yourself in the market as the pre-eminent player.
Higher returns on investments
Having invested a considerable amount of money and time in
developing innovative products,
your SME could, under the umbrella of these exclusive rights, commercialize
the invention enabling your SME to obtain higher returns on investments.
Opportunity to license or sell the invention
If you chose not to exploit the patent yourself, you may sell it or license
the rights to commercialize it to another enterprise which will be a source
of income for your SME.
Increase in negotiating power
If your SME is in the process of acquiring the rights to use the patents of
another enterprise, through a licensing contract, your patent portfolio will
enhance your bargaining power. That is to say, your patents may prove to be
of considerable interest to the enterprise with whom you are negotiating and
you could enter into a cross licensing arrangement where, simply put, the
patent rights could be exchanged between your enterprise and the other.
Positive image for your enterprise
Business partners, investors and shareholders may perceive patent portfolios
as a demonstration of the high level of expertise, specialization and
technological capacity within your company. This may prove useful for
raising funds, finding business partners and raising your company’s market
In many cases, where an enterprise has
merely improved an existing product and the said improvement is not sufficiently
inventive to be deemed patentable,
models (or "petty patents" or "utility innovations") may
represent a good alternative, if available in the country in question. On
occasions, it may be advisable for your SME to keep its innovations as
secrets which requires, in particular, that sufficient measures
are taken to keep the information confidential.
It is highly advisable for SMEs
engaging in inventive activities to consult patent databases to find out about
existing technologies, identify licensing partners in case a technology already
exists and avoid duplication of research activities. A more comprehensive
analysis of the importance of
searches is available.
if you do not Patent Your Inventions?
Somebody else might patent them
In most countries (with the exception of the United States), the first
person or enterprise to apply for a patent for an invention will have the
right to the patent. This may in fact mean that, if you do not patent your
inventions or inventions of the employees of your SME, somebody else
who may have developed the same or an equivalent invention later
– may do so and
legitimately exclude your enterprise from the market, limit its activities
to the continuation of prior use, where the patent legislation provides for
such exception, or ask your SME to pay a licensing fee for using the
Competitors will take advantage of your invention
If the product is successful, many other competitor firms will be tempted to
make the same product by using your invention but without having to pay for
such use. Larger enterprises may take advantage of scale economies to
produce the product more cheaply and compete at a more favorable market
price. This may considerably reduce your company’s market share for that
product. Even small competing enterprises can produce the same product and
often sell it at a lower price as they do not have to recoup research and
development costs incurred by your SME.
Possibilities to license, sell or transfer technology will be severely
Without IP rights, transfers of technology would be difficult if not
impossible. Transfer of technology presupposes ownership of a technology
which can only be effectively obtained through appropriate IP protection.
negotiations do take
place for transferring a given technological development without IP
protection over the technology in question, parties are suspicious of
disclosing their inventions, fearing that the other side may “run away with
IP protection, in
particular patent protection, is crucial for acquiring technology through