Are patents only a stick?

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?






2 responses to “Are patents only a stick?”

  1. jharr Avatar

    As a former UGS employee I’ve been using your blog to keep up on some of the Teamcenter and UGS happenings of late. I was curious, have you seen the recent flood of Dassault commercials and ads? I was shocked to see a “Dassault-branded” CNN homepage a few nights ago (screenshots available if you want to see them), does UGS/Seimens intend to respond? These were very slick ads, the commercial in particular did an excellent job of translating PLM value for non-PLM folks. Just curious, while UGS certainly innovates as evident from these patents, I’m not sure the world knows/cares unless you tell them about.

  2. Greg Avatar

    Which of your strategies would you use to describe UGS’s patent number 7,027,048 – “A computerized deformation analyzer”.,027,048
    Sounds a lot like a few FEA tools that I’ve used in the past, well before the patent application and grant dates. I wonder how familiar the patent examiner was with the prior art involved here?

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