Our Founding Fathers believed that the concept of a patent was so important that they included patents (and copyrights) in the original U.S. Constitution, rather than trust Congress to enact patent and trademark legislation. The American Patent System has promoted innovation and made the U.S. the leader in technology for 250 years! The brilliance of the Founding Fathers continues to amaze us!
Most businesses take advantage of the American Patent System, regularly filing patents to protect their technologies and enable innovative enterprises to profit from their collective genius. Just about every business – regardless of its size or industry – has some type of R&D (Research and Development) function. Businesses continually search for the next product or service to take to market – a new product or service, or an enhancement to a current products or services, that will generate more sales and even greater profits, expand the customer base, and give the company a competitive advantage.
Some businesses have an actual Department called “R&D” while other businesses use terms such as “New Product Development” or “Office of Technology” that is lead by a CTO (Chief Technology Officer). In some enterprises, the Engineering Department heads up new product development while in other businesses it is a function of Marketing.
Regardless where the process resides or what it is called, the process is pretty much the same. Starting with the products and services the company presently sells, employees look into the future to see how current products and services can be improved or enhanced, or what the technology will be for the next generation of products and services.
R&D is critical to the long-term survival of any business, but it is expensive and time-consuming. New product concepts have to be tested. Prototypes have to be designed and engineered. A source of parts and components for the new product has to be identified. Packaging, pricing, and promotion is needed to take the new product to market. In fact, traditional R&D is so time-consuming that it is not uncommon today – with the considerably shortened life cycle of most products – to have a new product come to market only to find that it is obsolete!
Alec Schibanoff is Vice President of IPOfferings LLC, a leading patent brokerage firm and provider of patent valuation services. IPOfferings’ Patent Marketplace lists patents for sale that are represent by the firm.
And, of course, the company’s new technologies have to be patented. That means engaging a patent attorney and filing for patents. And since it currently takes on average about 30 months to receive a patent – from the date the patent application is filed to the date a patent is granted – it is not uncommon for a new product to be obsolete by the time that patent covering it is finally granted!
There is, however, an alternative to the traditional in-house, home-grown, labor-intensive, time-consuming process of developing and patenting new products and services: Outsource the task and acquire new technologies that have already been invented and patented!
The U.S. Patent and Trademark Office granted 399,055 patents in 2020, while the European Patent Office granted 133,715 in the same period. All of the industrialized nations have patent agencies that are busier than ever processing patent applications. While most of the patents that are granted each year are to businesses and universities, a substantial share of the patents granted each year are granted to individual inventors. These inventors do not have a factory for the commercialization of the inventions covered by their patents. These inventors will be not be “practicing” their patents – to use patent law term – so these patented inventions are available for acquisition by a business that can commercialize them and take new products and services to market based on the inventions covered by these patents. Forget about the years it takes to finalize the invention and the 30 months it takes to apply for and secure a patent. These are all granted patents that can be immediately used to launch new products or introduce enhancements to current products!
While a patent is not cheap – U.S. Utility Patents typically sell in the $200,000 to $500,000 range – the cost of acquiring a patent is very likely much less than the payroll for two or three years of an R&D staff. If a company does not have the cash-on-hand to outright purchase a patent, it can license the patent and pay a royalty on sales of products based on that patent, so the cost of the patent is back-loaded.
IPOfferings will conduct a search of the current patent database for any nation to identify patents and active patent applications that could be a good fit for a business. We just need a thorough understanding of the business’s current technology and where it plans to go with future product offerings.
We do not suggest that you fire your R&D staff, but it would certainly be a worthwhile exercise to have a search conducted to see what recently granted patents or active patent applications are out there that are applicable to your company’s technology focus. You might find the ideal next product, or come across a new product concept that is not a perfect fit, but with some tweaking by your R&D staff, it can be the next new product for your business. And if the patent broker comes up with NO viable new product patents, no harm, no foul.
You should consider both granted patents and active patent applications. A company can acquire a patent application, introduce a new product based on that patent application, and mark the product “Patent Pending” while it awaits final approval of the patent application.
Why re-invent the wheel, when someone else may have already invented – and patented – it? The time has come to think about the next generation of R&D!