Many companies avoid applying for patents. They may believe that the patenting process is too expensive, too complicated or takes too long to be worthwhile. They believe that the cost and resources to achieve a patent will outweigh any potential benefits.
But often companies underestimate the benefits of holding a patent. Here we outline some of the potential benefits of filing a patent application, the obvious and the not so obvious.
The most obvious benefit provided by obtaining a patent is that it protects your innovation from possible copycats. It provides the holder with the legal right to prevent anyone else from utilising, manufacturing and selling their innovation (in the relevant territory).
Patents can be sold or licensed. A business can sell multiple licenses to its proprietary technology and thus generate significant revenue.
Once a patent application has been filed a business is free to add “Patent Pending” to its technology/marketing. This can act as a great warning sign for potential imitators and even competitors.
A patent is a useful tool for start-ups and other business seeking investment. A patent shows commitment to innovation and speaks of the wider culture within the business. It also can provide some assurances to would-be investors, particularly when talking about a granted patent. However, simply filing a patent application can also go a long way in supporting investment opportunities.
In today’s world intangible assets can easily account for a large proportion of a company’s value. A patent is a sure-fire way to increase the valuation of a business. It provides potential buyers with assurances that your technology is credible and is adequately protected.
Once published, your patent will be available to the public and therefore competitors and future potential competitors to read and review. Just by existing, your patent will shape decisions made by competitors in ways that cannot be measured.
In high patent activity fields, two companies may be working on a similar technology. The UK operates under a first to file system, meaning that whoever first files at the patent office, “wins”. If a competitor files a patent on similar technology to yours, before you do, they could stop your technology in its tracks. A business may find itself in the situation in which it needs to file a patent, simply to prevent a competitor filing one first. This does have the added benefit of stopping your competitor’s technology in its tracks.
A patent can be a great tool for bringing potential collaborators to the table. Patents can provide you the edge required to catch the attention of otherwise uninterested parties, as well as providing leverage in any future collaborative opportunities. The patent search provided by the UKIPO as part of the application process will provide a list of potentially relevant patent results, and with it, potential collaborators too.
Filing for a patent will result in a UKIPO patent examiner conducting an examination of your application. As part of this examination, previously filed patents that relate to your innovation will be reviewed. The examiner provides the applicant with all of the supposedly relevant patent results they find. This can help to uncover a number of previously unknown competitors in your field.
Filing a patent application can provide helpful evidence that your R&D is making a technical advance in your field of technology when filing for R&D tax credits.
Profits that can be attributed to a patented invention – provided the patent is granted in a particular territory (e.g. UK) – can benefit from the UK’s Patent Box Scheme, which reduces cooperation tax paid on said profits down to 10%.