Why patents suck
About 11 years ago I was quoted in an article for The Engineer all about patent enforcement. One of the responses in the comments section referred to patent attorneys as “leeches on the jugular of innovation”. A bit harsh maybe, but we’re all entitled to an opinion.
So having been reminded of this recently, it inspired me to write about why patents suck. They are not for everyone, and not for every business.
Being a little biased, I will, of course, put the counterpoint across in the expanding sections below each point.
Patents are expensive
If you pay someone like me they are.
Do it yourself and you’ll spend £310 in fees- pay me to get you a UK patent and we’re talking £5k on average (to grant). Want to go overseas? Another order of magnitude. You can easily spend £10k in Europe, £8k in the USA and so on.
Once the patents are granted you have to renew the damn things every year. For a UK patent that’s, say, another £5500 (including attorney fees). The number will multiply quickly for overseas patents. That’s a lot of cash that could be spent elsewhere.
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Think about what a patent gets you. A 20 year monopoly on your invention. What value you can you put on that? We have said a UK patent costs about £10,500 all the way from filing to expiry- 20 years.
That’s £525 a year. For a monopoly on your invention- i.e. the ability to stop others from making, importing, selling, using etc the invention you worked hard to develop.
And that’s even before you factor in the fact that you get a corporation tax break on the profit from patented products in the UK.
I’d challenge anyone to argue that’s not good value for money.
Patents are worthless
So you spend all this cash, and what do you get? A piece of paper with a bit of ribbon? In all fairness the ribbon is a thing of the past. It’s just a PDF. A crummy PDF.
And you know what- someone’s going to copy it in China anyway, so what’s the point? And if even if you get the point of trying to enforce it the other side will probably knock it out anyway.
That’s before we even get into the costs of litigaton (more on that below…).
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Patents represent a monopoly- something which most countries do not tolerate under normal circumstances. What you have is the ability to stop others from making, importing, selling etc your invention. That is a powerful right, and is enforceable in the UK courts.
As far as overseas rip-offs go, a UK patent certainly can’t be enforced elsewhere. But do note that importation is an act of infringement- even if you only have a UK patent you can prevent infringing imports. So someone may be merrily manufacturing and selling in China, and there would be nothing you could do about that, but you can certainly stop the infringement hitting the UK market.
And in terms of the patent just being knocked out? That’s a very expensive exercise for the other side. Patents are carefully examined and presumed valid until proven otherwise. Even if someone is sure your patent is invalid, it will cost them a lot to invalidate it, which gives you more chips in the game.
The point is that a patent gives you an advantage in the marketplace. Whether you want to sue infringers left, right and centre or just get around a table and thrash out a deal, a patent will improve your position from the start.
Patents are complicated
When you file a divisional application to an invention disclosed in the parent application that does not validly claim priority, then the parent application may inadvertently poison the divisional rendering grant impossible…
BLAH BLAH BLAH
Why is it so complicated? Can’t we just have copyright for inventions? No registration required- if someone rips you off then you take action on the basis you were first. Or if you need to register these things make it simple, and cheap. No attorneys required.
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Unfortunately, it needs to be complicated. Patents represent a very powerful right. The system for getting them granted needs to exhaustively examine whether the invention is worthy of a patent. It needs to be rigorous, and that comes with complexity.
Copyright is simple because the bar to entry is low. You just need something original. If you gave inventors a monopoly on everything on that basis, innovation would be stifled. There needs to be a higher bar, and that comes with a need to test whether the invention meets that bar.
So we are, sadly, complexity is a necessary evil.
My advice? Get a good attorney- someone who can decode all that legal jargon and provide clear, straightforward advice. Make sure they understand your company’s objectives and can steer the patent in the direction to help meet them.
Patent litigation is not for startups and SMEs
Patent litigation is extraordinarily expensive in the UK. At the very lowest end you could be in for £100k in legal costs- if you are lucky you might get half that back if you win. Add even a little complexity and you are in the high six figures.
For most engineering inventions this will outstrip any damages you may be seeking. That’d before you factor in the management and staff time needed for a patent litigation, which by the way may take years.
So what’s the point in a patent if you can’t even enforce it?
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It is expensive- no getting away from that. But don’t assume that court is the only way to sort these matters out. Most patent disputes don’t make it to court- what patents are really good at is getting people to talk. Patents are business tools, and business is done in the board room, not in a court.
So don’t look at the patent as a stick, it’s a means to give your company the edge in thrashing out a deal, perhaps one that could generate income via a licence rather than spending it on litigation.
Court will always be there as a last resort. Even then, the Intellectual Property Enterprise Court (IPEC) is specifically designed for SME litigation. It features a streamlined process and a costs recovery cap to manage risk. The new EU Unified Patent Court (UPC) is similar if you want to litigate in Europe. So there are ways of litigating as an SME that are not prohibitive.
So patents definitely suck?
Yes, well, kind of. Depends on your point of view. They are not for everybody. If I talk to a potential client and I don’t think patents are right for them I will tell them. Is there a viable demand for the product? Is there a business plan that will start to generate income to cover the costs involved in the patent process? Is the invention even suitable for a patent- some are better treated as trade secrets. Some things are simply not patentable at all.
In short, it’s pretty subjective. So my advice- let’s have a chat. I might be a leech but I promise I’ll stay well away from the jugular for the first meeting.