How to make extra money with your patents. Patents can be useful but are generally expensive and lots of hassle. Thomas Remmerswaal occasionally encounters negative associations like this in his work as a patent attorney at EP&C Patent Attorneys. He feels that this is a shame because as an innovative company there are major benefits for you if you have a policy in place. If you do nothing, you will simply lose your market position or monopoly.
Remmerswaal is calling on companies to embed a patent policy in their organisation: "Patent policies are still in their infancy in many organisations. Consciously thinking about patents has not yet become part of their policy. You should make it part of your overall business strategy and see patenting as one of the steps in your innovation process."
More knowledge first
Everyone has heard of patents and roughly knows what you can do with them. That is not enough within an innovative organisation. With a carefully thought-out patent policy you can look at how patents can help turn a cost – the patent application – into something that generates added value.
Sharing knowledge about this in the organisation creates a mindset in which innovation, patenting and commercialisation are interrelated. Remmerswaal explains that this starts with a better understanding of patents. “Before you start working on a patent policy, it is important that there is awareness of this topic in the organisation. That people know what patents are and what you can do with them. And what patents you already have, for example by having a patent database on your intranet. If the Sales department is aware of the patents, they can use their feelers at exhibitions to see what your competitors are doing, what the trends are, and if anyone is possibly infringing your patents. If they then come across products that are similar to a product you have patented, they will notice it."
The benefits of patents
With this knowledge about patents comes an understanding of the benefits, Remmerswaal explains. "With a patent, you have exclusive rights to your innovation for a maximum period of 20 years. As long as this is of interest to you, you will be protected against counterfeiting during that period. It gives you a strong market position and monopoly on your invention. This also has an effect on your business strategy as this will go hand in hand with your patent policy, if, for example, the main focus of your commercial activities is on patented products."
Another important benefit is that with a patent you can issue licences and make money from this. "If you have a patent in countries where on reflection you are not going to market, you can consider issuing licences in those countries. As from next year you can also apply for a unitary patent. This will give you a patent in 17 European Union countries in one go. Suppose only six of these countries are of interest to your company, you can then offer licences for the other countries to parties operating there. That way you can earn extra money with your patent," Remmerswaal says.
Patents can also be used as a marketing tool Remmerswaal explains. "The Marketing and Sales department can use them commercially. By using the term 'patent pending', for example, which increases the readiness of potential customers to buy your innovation. A patent also makes you more attractive to investors. They tend to be more willing to fork out money then because the chances of them recouping their money are greater than if just anyone brings a product to market."
Too much responsibility lies with technical departments
According to Remmerswaal, the reason why patents do not yet have a fixed place in the policy of many companies is because the responsibility for them currently often lies solely with the technical departments or R&D. "That in itself is hardly surprising; after all, that's where most innovations are done. But often techies particularly find complex, technical solutions interesting to patent. These are not necessarily the inventions that make the most money. If a patent policy has wider support across the organisation, a Marketing & Sales department, for example, will look at it from a different perspective. They have a better idea of what the market needs and what is commercially viable. It is therefore good to involve them and to make management responsible for the policy, for instance. If you ensure that the vision on patenting is embedded in the organisation you also avoid it being deviated from in the event of staff changes at management level or in R&D, for example," according to Remmerswaal.
Don't shoot yourself in the foot
By ensuring that there is greater awareness of your patent policy within the organisation, you also avoid shooting yourself in the foot. Remmerswaal explains: "Within many companies there is often little awareness of patents. Not even among the people who make inventions. A techie might enthusiastically talk about an innovation they are working on at a birthday party or an exhibition. As a result of this, patenting will no longer be possible. The patent must be applied for before you can go public with an innovation as otherwise it is no longer novel and that is a very strict condition for obtaining a patent. You can prevent this type of unwanted public disclosure by increasing awareness of patents."
Link your patent policy to your innovation subsidy
Innovative companies often make use of WBSO subsidies. Companies receive these subsidies, which are linked to the time spent on R&D work, to promote innovation. If you sell an invention developed with WBSO subsidies you can reduce the amount of tax on profits payable by making use of the Innovation Box. Remmerswaal explains how this works. "Companies receive a tax on profits allowance in respect of innovative products; the so-called Innovation Box. Larger companies actually have to have a patent to qualify for these Innovation Box allowances. They may have to incur costs for patents but in light of the tax on profits allowance they will receive it still pays them to do so. So there are big financial benefits to aligning your patent policy with your innovation subsidies. In addition, you can consider aligning the complexity - and thus the cost - of the patent with its purpose: curbing competition or tax benefits. But then again; don't just limit the knowledge to the Technical department, make sure you share it more widely. With the Finance department in this case. It is up to them to ensure that effective use is made of the innovation subsidies available."
What do you include in your patent policy?
In a patent policy you lay down your company's vision on patenting. This way you ensure that when innovating, it makes perfect sense to also think about possible patents. Remmerswaal explains which questions you can ask to arrive at this vision: "It is important to ask yourself how you will make money with the invention. If the invention is important for your company or technically very innovative, you should consider a patent. You should not do so for inventions that are not commercially attractive.
You should also think about what you want to do with the patents: solely protect your innovation or also issue licences? In which countries do you want to operate commercially, what are the policies on the prosecution side? And are you also willing to invest in keeping infringers away? You should also consider whether the patents match what you can handle when it comes to production and operations. These can be quite complex questions. So don't be afraid to get expert help with them. It will be worth it in the long run."
