What should I do after filing the patent application?
As Patent Attorneys, we often counsel clients who have had no previous experience in commercialising inventions. An important aspect that needs to be understood by first time inventors is that a filed patent application or even a granted patent by itself will not ensure commercial success.
A very common question that first time inventors often ask us after we have filed their patent application is “What should I do after filing a patent application?” I am confident that most Patent Attorneys who assist local Australian businesses and inventors have been asked this question in one form or another and the answer is never straightforward. My answer in almost all such cases revolves around commercialising the invention.
Unlike the patent system, the process of commercialising an invention is not a linear process and its different components overlap and interact in various ways depending on various factors. It is important for inventors to devise a business plan for commercialising their invention at an early stage of commercialisation. From the viewpoint of the inventor or the owner of an invention there are at least 4 possible ways of commercialising an invention, including:
- to start manufacturing and marketing of the product based on the invention or raise sufficient capital to start manufacturing and marketing,
- to license the rights in the invention to one or more interested third parties,
- to sell the patent rights to a third party, or
- any combination of the above.
The Role of Patent Protection
Patents are like any other commodity that may be bought and sold in a free market in countries across the world. However, one of the fundamental differences between a patent and material goods is from the point of view of commercialisation. Unlike material goods, inventions can be used simultaneously by several persons or companies and hence they can be sold or licensed several times, to different persons or companies. As a result commercialising a patented invention can result in generating significant income throughout the life of a patent.
However, inventors and all those involved in marketing inventions should not forget that only a very small percentage (5 to 7 percent) of all inventions for which patents have been granted actually make money for the owner. In many cases, the failure to make money is not due to the quality of the invention, but rather the result of other factors, such as the high investment cost for a relatively small effect, need for additional R&D work, lack of appropriate manufacturing and technological environment or no real market need. Our experience suggests that inventors are usually very optimistic people who sometimes apply overly optimistic views of the chances of commercial success. Timely and valuable advice from professionals such as Patent Attorneys can often make a significant difference to commercialisation outcomes.
Patent protection can be a very powerful tool in the commercialisation process. Reliable and enforceable patent protection provides inventors with an opportunity to license or sell the patented invention to partners or buyers for an invention. Such commercial partners may be approached in many different ways such as direct contacts with companies, contacts through Chambers of commerce and industry or similar organizations, contacts through professional or industrial associations, or by participating in specialized exhibitions.
It is also important for inventors to discuss their commercialisation strategy with their Patent Attorneys to ensure that the patent protection pursued by the Patent Attorney is in alignment with the commercialisation strategy adopted.
Common Mistakes
Filing an initial Patent Application without professional guidance: A common mistake made by inventors is that they try to draft and file their own patent application in order to reduce costs and refuse to seek the services of qualified patent attorneys at an early stage of the commercialisation process to save on costs.
The first filed patent application is a very important document. A poorly drafted patent specification can create significant problems further down the road during the commercialisation process that can be infinitely more costly. My colleague Brad Postma recently wrote an article to consider this issue in further detail and highlight the irreversible harm that applicants may do to themselves at an early stage of commercialisation by not seeking professional help for drafting and prosecuting their patent applications.
Confusing ambition with capability: It’s easy for inventors to believe their patented invention is likely to be a long-term, global market-changer and must be protected all over the world. As a result it is tempting for inventors to pursue patent protection in many different countries around the world without realising that commercialising an invention all over the world can be very challenging. Costs associated with IP protection around the world in multiple countries can have a crippling effect on the business if not managed well. Many of our successful clients have pursued patent protection in a select few jurisdictions and achieved tremendous success.
We always like to see our clients succeed in the marketplace and we are upfront in advising our clients that they should not seek protection in countries where they may not have the capacity to exploit their invention nor any reasonable chance at attracting a commercial partner in the particular country, that can help.
How to choose the right commercial strategy
Commercialisation strategies largely depend on the kind of invention and the field of technology, to which it is related. The commercialisation strategy for a product in the consumer goods industry that is mass produced, is likely to be very different when compared with an invention in a specialised field that is only applicable to a select few manufacturers. Commercialisation of inventions is a complex process and in a highly competitive market it is often advisable to seek the help of professional specialists (including government agencies) who have expertise in advising on commercialisation of inventions.
The following story is an excellent illustration of what can happen in reality and how difficult it can be to devise a successful commercialisation strategy for a new invention. A European company sent some salesmen to a remote part of Africa to explore the local market for shoes. The first salesman reported to his company that “shoes will be an interesting product to be sold in that part of Africa because nobody was currently wearing shoes and the potential market was large”. The second salesman, sent on mission by the company to follow up on the survey a few months later, reported that “shoes will not be saleable here because nobody wears shoes.” This example shows to what extent a conclusion reached can differ based on the same facts. This story gives a clear indication on how difficult it may be for inventors to devise a commercialisation strategy for their invention.
While there are several publications that teach strategies and techniques on how to sell and commercialise products, almost all of them always highlight the fact that there can be no fixed rule on how to commercialise or market a product.
To summarise, successful commercialisation of inventions and technology requires a marriage between a new invention and a real existing need. As a result, commercialisation demands a close collaboration and cooperation between three groups of people:
(a) those who create inventions and technology (inventors or inventive enterprises)
(b) those who explore and create opportunity for the inventions (Patent Attorneys/IP experts and Commercialisation Experts)
(c) those who use inventions and technology (the end user or consumer).