We dispel the myth that software is too difficult and costly to protect with patents.
In these tough times, many are looking to ring-fence the core aspects of their business relative to those more peripheral, to help secure longevity and ride-out the pandemic.
Across industry sectors and company-to-company, intellectual property (IP) — which includes patents, designs, trade marks and copyright — can be treated disparately. For some, IP is a valuable asset and an essential part of their business model. For others, who may rarely or never have stepped into the world of IP, it can be completely off the radar.
At a time when everyone should be looking to build and secure their company assets, implementing a patent-based IP strategy can be a relatively inexpensive way to secure your future — here’s why.
Patents provide a 20-year exclusive right to commercially exploit a given invention. This is a tangible company asset, which can be licensed to various subsidiaries and third parties, with the original patent holder attracting regular licence royalties. Furthermore, a patent often provides a basis for attracting investment, with any potential investor gaining confidence to partner with a company that has protected its R&D initiatives and secured a highly competitive commercial position against its competitors.
As an asset, a patent can significantly enhance a company’s value. In some territories, there is even a tax incentive for holding a patent. For example, in the UK, worldwide sales of a product that fall under the umbrella of a patent attract a much-reduced level of corporation tax. In some instances, this alone can be reason enough to secure a patent — particularly for a product with worldwide potential.
To some extent this depends on how IP has been regarded historically within your company. If you already have a patent portfolio, built through years of investment in highly skilled, creative personnel and R&D, discontinuing this (in the vast majority of cases) is simply not an option. Alternatively, if you have never held a patent, does starting to build a portfolio in very challenging times make sense?
The key point to consider is that investment in IP and patents builds company assets. This can offset losses and may enhance financial performance, particularly when measuring based on company or asset valuation. With a relatively modest investment in a patent application, you can secure a potentially significant exclusive market share and unlock the ability to licence, attract investment, swell your company valuation or simply deter your competition from capitalising on the commercialisation of a new concept (be that a product, chemical compound, material or method of manufacture).
The costs to secure patent protection are proportional to the extent of geographical protection that is required. As a guide, in a single territory, using an IP firm to do the work, typical costs to start the patent application process might be in the region of £4K to £6K. Costs to progress the patent application through to possible grant in that country might be a further £1K to £4K, depending on the technology sector, nature of the concept, how different it is from products already in the marketplace, etc. Once granted, a patent is then renewed every year through the payment of a renewal fee, typically around £300 per year in the UK. For international protection, country-by-country costs will be cumulative and deciding on the countries in which to protect company assets depends on business sectors and your competition. As patents protect against importation into a country where the patent is held, it’s generally commonplace to secure protection in three to five major territories such as Europe, the US, China, Japan and Australia.
Thankfully, the solution to this is simple — use a firm of patent and trade mark attorneys to shoulder the complicated legal and technical administrative burden. Professional attorneys can advise and guide your business through the process of maximising your commercial position and ultimately, enhance the value of your company.
To find out more and for an initial conversation, get in touch with me at email@example.com.
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