A strong patent portfolio provides many benefits to the owner. Patents are an asset that have value, and that value can come in different forms.

1. Patents force competitors to design around the patented invention. As your company spends resources, including time and money, in research and development (R & D), the resulting inventions are often patentable. If the invention is commercially viable, and thus valuable, the cost of obtaining a patent may be relatively minor, while factoring the cumulative costs of R & D, manufacturing, distribution, marketing, etc. A patent often serves as a deterrent and may force a competitor to incur their own costs in designing around the patented invention. As a result, the patent is an opportunity to protect your investments and give advantages in the marketplace via the exclusive right to prevent others from making, selling, and using the patented subject matter.

2. Patents create leverage in patent litigation. If you are accused of infringing a patent owned by someone else, a strong patent portfolio may be used in counterclaims against the other party. Your patent portfolio may help level the playing field and provide leverage against the other party. Therefore, having your own patents to assert against the other party may facilitate resolution, without the time, expense, and risk of going to trial.

3. Patents are a business asset. As such, if you are selling your business, your patents increase the purchase price. The value of patents in a buyout situation often exceed the value of the tangible assets of a company. Since patents normally have a twenty-year life, they can be monetized over a number of years, depending on their age. The cost to patent a successful commercial product is small compared to the revenue which may derive from the sale or licensing of the patented technology. Therefore, if you are negotiating the sale of your company, your patent portfolio can increase the size of the check you take to the bank.