When discussing patenting, there is often a tendency to underestimate an activity that is increasingly essential for companies.
It is important to keep in mind that intellectual property can be one of the most expensive components for many products.
One need only consider that for many of them, 25% of the price is represented precisely by licensing costs for the use of patented technologies.
Furthermore, it must be considered that while a company may start with a competitive advantage, competitors will soon learn to produce and market the product successfully, thereby creating a decrease in sales due to the fact that the market will have increasingly more competitors.
What are the advantages for a company that holds intellectual property rights?
By leveraging its intellectual property rights (Trademarks, Patents, Designs), a company can totally or partially preclude competitors' ability to produce a specific product, or it could enjoy licensing revenues, thus allowing other manufacturers to market that specific product under its authorization and control.
Let's look specifically at 5 advantages of the patent and how companies can exploit them.
1. The patent represents a source of revenue.
Once a patent has been obtained for a specific product, one enjoys a title of strength which grants a temporary monopoly of exploitation over the object of the patent itself, consisting of the exclusive right to manufacture, dispose of, and make commercial use of it.
In other words, those who patent a key product can enjoy a position of advantage in the market due to the monopoly over that specific product.
Furthermore, the patent owner retains the possibility of licensing their patented product to others.
It is interesting to note that, especially for a successful company with resources, it may acquire patents even from independent inventors in order to enforce its rights against others.
Meanwhile, small businesses can certainly obtain significant revenues by granting licenses for their patents.
Generally speaking, an inventor should always have realistic expectations regarding the income that could derive from licensing their patent and should truly understand (this is fundamental) if the invention is well protected.
2. Having a strategic advantage
It often happens that companies and research institutes use their patent portfolios as a tool to obtain a competitive or strategic advantage.
Various patent-holding companies use the strength of their patent portfolio to persuade a competitor to cross-license patent portfolios, thereby eliminating, or at least reducing, the possibility of litigation between them.
Patents are therefore also used to improve strategic positions within the market and enhance relationships between competitors.
3. Marketing element: the patent can improve market image
Having a well-structured and protected patent portfolio is certainly a sign of financial capacity and solidity that instills confidence both in the public and, above all, in investors or potential commercial partners.
It is also important to emphasize that for some products, such as those made of metal or plastic, the patent number can be stamped on the product itself.
A triviality for some, but one that large enterprises use for two different purposes: the first is as a method of informing the general public (marketing); the second, instead, is aimed at informing competitors that the specific product is protected by a patent and cannot be copied.
4. Controlling the market
Many are aware of the direct use of a patent, which translates into the possibility of obtaining an injunction against infringement by a competitor who produces, uses, sells, offers to sell, or imports a product or service covered by the patent claims.
Few, however, know that the indirect use of a patent can represent an advantage for a company that can monitor the market, particularly the patenting activities of competitors.
Through patent surveillance activity, the aim is to monitor third-party patent applications in a specific technological sector in order to intervene, when possible, during the examination proceedings, attempting to prevent the granting of the patent or to limit the scope of protection of any patent eventually granted.
In other words, this means limiting or even preventing the activities of competitors and staying constantly updated on their state of progress.
Naturally, the claims of most patents are not broad enough to control the production of all products in a given product category.
However, an entire patent portfolio—a collection of patents in the same field—can sometimes be so significant that it influences an entire industry.
5. Protecting one's innovative ideas
The purpose of a patent is to allow its owner or inventor to acquire exclusivity over their own idea that finds application within any sector.
Registering one's patent therefore offers the owner company the possibility to prevent, in the country where the patent was obtained, the production, importation, marketing, exhibition, and utilization for profit of the patented product.
Finally, the company owning the patent will retain the possibility and responsibility to identify violations of its patent and, consequently, initiate actions against counterfeiters of the same under the Codice della Proprietà Industriale (Italian Industrial Property Code).