Ralph picked up the news release UGS did today the ‘record number of patents’ issued in 2006. He concludes with a statement about patents only being useful in cases where there is some other disagreement between companies (specifically in the form of a law suit), where they can be used as negotiation chips.
While I don’t disagree that some companies use their patent portfolio that way, I think there are other important strategies for use of patents:
- They are proof of investments in innovation. While its true there are other measures, the test that the USPO places on patent applications gives at least some basic third party endorsement that something novel was developed as described in the application.
- They can be significant revenue sources, especially for companies that truly practice open innovation. There are numerous cases of companies effectively licensing patents to third parties creating revenue streams where the business model required to successfully commercialize the patented technology does not exist in the parent company.
What else? What other positive (or negative) uses of patent portfolios have you seen on there?
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