Patent Advice Blog - Boswell IP Law

This article (click here) discusses Microsoft head of Research Rick Rashid's comments that the key to a technology company's survival is research. The article provides some great examples of how Microsoft is finding new areas of revenue through their research.

Rick's comments go right along with a message about the importance of patents to protect the research and development a company is doing. In my experience, I have met three types of companies:

• The first type of company realizes the importance of patents and other intellectual property (IP) from the start. Often there is a founder or advisor that has been through the process of building a business before and has seen the long-term value of IP protection. These companies work to get patents for their early ideas and prioritize IP funding for at least the core idea of the company even when the early money is tight.
• The second type of company wants to protect their IP after everything else is done. These types of companies always seem to put something else first, whether it is sales, development, or the many distractions that go with starting a business. These companies often are too late to get protection on their core idea (because of the U.S. rule preventing patent protection one year after public disclosure) and are stuck getting protection for minor improvements or later enhancements to the core idea.
• The third type of company is openly hostile to IP protection. Usually there is a vocal team member that has read an article about abuse of the patent system that offends their core beliefs, and they do not want to be part of it. The sentiment is understandable, but often those holding it are wrong to equate themselves with those abusing the system. These companies often truly do have a very unique idea that deserves protection, and by not protecting their ideas increase the percentage of bad patents in the system.

This order of this list also often corresponds to the rate of success that I see from these companies. All of the big players, such as Microsoft, Intel, IBM, and others, make major investments in both research and IP and see the rewards of those investments to their bottom line. However, what is less visible is the enormous benefits that come to small to medium sized companies that protect their IP. These companies can ward off competitors seeking to copy their hard work, and they provide themselves with a defensive position when competitors try to assert IP against them. These companies are also often the targets for acquisition by bigger companies that view the IP the company has built as an asset as valuable as the team and products of the company.