Patents: A Business Strategy or a Romantic Fantasy?

Patents are often romanticized in the world of innovation, associating them with the dream of turning a simple idea into a lucrative business venture. However, the reality is far more nuanced. Patents are not merely about the invention itself; they are a tool for a specific business strategy, often hinged on the financial ability to enforce them through legal means. In this article, we will explore the realities of patents and their role in business, debunking the myth that they are useless.

Patents and Their Expensive Nature

Patents are indeed expensive and highly procedural. The process of securing a patent and maintaining it is a costly endeavor. Patents do not, in themselves, protect an invention; rather, they provide the holder with the right to take an infringer to court or to threaten legal action. This legal protection is what makes a patent valuable, but it also comes with significant financial implications. If an inventor does not have the financial means to carry out a threat of legal action, the patent may be largely useless, as infringers are well aware of how to make the process long and expensive.

The Importance of Commercialization

A good idea, while certainly valuable, is not enough to warrant a patent. The idea should also be widely commercializable, indicating the potential for generating substantial sales. If the market projections show clear potential for millions in sales, then the financial burdens associated with patenting can be borne by investors. This makes it a viable strategy. Conversely, if the idea is not commercially viable, the investment in obtaining and maintaining a patent may not be worthwhile.

Case Study: The Value of Patents

Patents are definitely not useless. A prime example is the case of Bruce Saffran and his successful patent litigation. In 2011, a jury in Texas awarded Saffran $482 million in a patent case against Johnson Johnson subsidiary Cordis Corporation and Boston Scientific Corporation. This was due to three patents he registered in the 1990s while in residency at Massachusetts General Hospital. Later, a judge added $111 million in interest, bringing the total to $593.4 million. This incredible sum demonstrates the value of a well-established patent in a highly lucrative market.

In 2008, a similar case saw Saffran ordered by a jury to be paid $431 million by Boston Scientific. While the company appealed the verdict, it eventually settled with Saffran for $50 million, further illustrating the significant financial impact of a successful patent case.

Conclusion: Patents as a Strategic Tool

Patents are not a goal in themselves; they are a strategic tool for those who understand the legal landscape and have the resources to enforce them. They provide a competitive advantage, especially in industries where legal protections are a key component of business strategy. The success of patents like those held by Bruce Saffran proves that, like any other business venture, the application of patents requires a strategic approach. While not all ideas will be commercially viable, for those that are, a solid patent can make all the difference.

A good idea paired with the right commercial strategy and the ability to enforce legal rights through patents can indeed lead to substantial financial rewards. Patents are a powerful tool in the arsenal of any business, and they should be seen as a means to an end rather than a standalone goal.