Patent strategy is too often disconnected from the core business strategy, usually only being thought about when an engineer develops something novel, triggering a call to the patent attorneys.
This approach to patents is reactive and limiting. It treats patents as a wall or burden within the process, relegating patents to a cost centre. The result? The conversation is confined to cost and compliance, overlooking the immense potential for value creation.
This is inevitable in a business that only views patents as a defensive position in the market, often missing the potential for more and creating only a hastily built barrier that can be bypassed by competitors.
By moving beyond just a singular defensive function of patents, it’s easier to understand the deeper value that a patent can provide and switch the business mindset to one that views patents as multifaceted business assets that can be actively deployed to achieve specific commercial objectives.
The four interconnected pillars of patent strategy
Pillar 1: The Shield (Defence)
A well-built defensive patent portfolio acts as a powerful deterrent, discouraging litigation and market challenges.
The Shield is the most well-known role of a patent, used to defend a core technology by securing the exclusive rights to an invention. It’s an important strategic move, but one that is too often done in isolation and reactively, and without a proper patent strategy can be circumvented by competitors designing around the key parts of the patent.
Pillar 2: The Sword (Offence)
The Sword is all about using patents as instruments for business growth: generating revenue, shaping markets, and enabling new commercial models. It’s a way to actively create value.
A good example of how this can be used is for granting others the right to use intellectual property in exchange for royalties or other fees. This transforms how patents are thought about internally, providing new ways to diversify revenue streams.
Pillar 3: The Crown Jewels (Valuation)
The “Crown Jewels” represents a company’s patent portfolio.
When thought about as part of the core business strategy, a patent portfolio not only increases a company’s valuation, but also increases attractiveness to investors, partners and potential acquirers.
A company’s “Crown Jewels” is a clear sign of innovation, defensibility, and long-term potential.
Pillar 4: The Bridge (Collaboration)
The Bridge allows the patent holder to maintain control when choosing partners for scaling, marketing, or distribution, ensuring favourable collaboration terms.
It’s another way of thinking about patent strategy, and one that moves away from patenting technology in order to build a barrier from others using the technology, and instead provides a strategic way to let the right partners in.
An example of where a patent holder might choose to collaborate with a partner could be to expand to new territories through trusted distributors, once again diversifying the revenue streams and viewing patents as valuable business assets.
Rethinking your approach to patents
By implementing a modern strategic framework that builds upon these four interconnected pillars, a patent strategy can go far beyond just protecting IP, allowing companies to diversify revenue streams and create new value.
Some of this lies in the thinking and approach to patents and learning to see them as more than legal defensive documentation to stop others encroaching on intellectual property, and considering patents as true business assets.
