Now that I've thoroughly gone off the deep end by defending patent trolls and taking a detour through the world of product invention via the courts, it's time to return to my original thread. Recall my "Game Theory of Patents" where patents can only be insurance or threats? What if, in combination with additional intellectual property, a patent becomes the foundation of a viable business threat? I firmly believe that the reason we don't see more patents as business threats is because too often the patent stands alone as a property right and it's surrounded by all sorts of emotional utterances (e.g., "I just know this is going to be huge" or "everyone I ask would buy one" or "I don't know what it will cost to make it, but I'm sure the profits will be huge"). But there's no data to go along with the patent -- so there's no credible business threat. Standing alone as a patent, in the absence of infringers, there is neither a credible legal or a business threat; the patent is worth little more than the paper it's awarded on...
However, what if we combine the foundational patent with additional intellectual property? Such as real market research (e.g., concept/usage/volumetrics), real product design work including prototypes and CADs, some wickedly clever additional patent applications that expand the fence, and perhaps even some brand and packaging insight? Can we make the product opportunity a business threat?
If we succeed in our "commercialization steps" we create a sufficiently compelling business opportunity that is a credible business threat in the sense that now market entry is almost certain: BigCo A, BigCo B, DRTV/infomercial company C or startup D will launch this product because the economics are known, the manufacturing method is known, the consumers have said they'll buy it, etc. And, to top it off, the product opportunity as outlined in the patent and the additional intellectual capital will have both a time to market and a legal advantage over trying to compete against it.
At this point, the business threat combines with the greed factor (and ideally, the ease factor as less work is now required to bring it to market). If we can turn the product license sales pitch into what is essentially an M&A auction, we have dramatically shifted the odds towards a license transaction. We create urgency by shaping a product opportunity into a reality: someone is going to own this and bring it to market. Fast. And those who don't license it will be forced to design around it (which is generally do-able, but will slow you down and likely increase your COGS if we've done our job right).
So here's the business threat laid out there: "Will it be you or your competition?"
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