The Intellectual Property game can be like a game of chess: you need to think several moves ahead.
You have to make your moves on the same board as your competitors. One of my favourite moves involves making strategic use of the patent pending phase.
If you have filed a patent application, but the patent has not yet been granted, then the patent is pending (for a more detailed explanation, please read this BL&G). It can take years for a patent to be granted. You basically do not have a patent until that point. At first glance this may appear to be rather clumsy.
Quick or strategic?
Companies that apply for a patent for the first time like to make sure that their patent is granted as quickly as possible. It gives them certainty with regard to the kind of protection they have and enables them to claim exclusive rights to their invention.
By contrast good chess players or smart innovators prefer to use the granting procedure as a strategic tool. The longer it takes for a patent to be granted, the more options there are for obtaining optimum protection. As long as a patent application is still pending, it is unclear which claims contained in the patent application are going to be honoured. Not just to the party filing the application, but also to the competition, and that is the crux of the matter.
How to keep ahead of the competitor?
When competitors look at your patent application (because once it has been published everyone can take a look at it, via Espacenet for example, they will see that you have filed a patent application for a new technical development. If your competitor is also working on this innovation, he will think twice before trying to sell his product. After all, if he does, and your patent is granted, he will run the risk of infringing your patent.
Moreover, an ongoing patent application offers more flexibility for adapting the claims to your competitor's product. This will make it more difficult for your competitor to predict the exact limits of the patent to be granted.
By keeping your patent application up in the air, you are casting a shadow on the market which could be bigger than your ultimate patent and are eliminating your competitor.