Are patents worth anything?

[globi5]

I've been working in R&D for several years (mostly MEMS and small electromechanical products) and noticed that it has generally never been considered to license any IP from anyone - unless a working product was already available and then we would purchase the product anyway (the fact whether it had any IP or not didn't matter in this case).
Also when we realized that we might infringe a patent we would always find a way to work around it or find an alternative solution. In addition when competitors would infringe on some of our patents we didn't go after them because it was considered too costly and time consuming.

I realize that patent lawyers make a considerable amount of money with patents, but what about inventors? Are there any inventors profiting from their patents? Are there any inventors or engineers that came up with a neat idea and some corporation actually licensed it?
Or is your corporation paying some small guy licensing fees for his idea?

 

[IRstuff]

Some.

Jerome Lemuelson, whatever you think of his capabilities, left his entire patent portfolio with a foundation populated entirely with lawyers, whoc gleefully go after anyone appearing to infringe on one of his patents.

Large corporations leverage their patent portfolios in a similar fashion. Fairchild Semiconductor was sued by Hitachi in the mid 80's for patent infringement. We were able show that a sizable portion was sufficiently questionable that we got away with settling for $7 million on a $50 million suit.

TTFN

 

[stevenal]

Ever hear of the SAM splint? Dr. Seaburg noticed that by curving a piece of foil, it would better hold its shape. The result is very small, lightweight device that can be unrolled and curved to support a fractured limb. His biggest customer is the US government, but they are used by medics and EMTs everywhere. There might have been lawsuits, but he made his money by manufacturing and marketing his patented device. He didn't license it out, he started his own manufacturing business. I'm sure the patent was handy when obtaining startup capital.

 

[MadMango]

A patent can have value, if it is written properly and is not too broad or too narrow in scope.

[green]"I think there is a world market for maybe five computers."[/green]
Thomas Watson, chairman of IBM, 1943.
Have you read faq731-376 to make the best use of Eng-Tips Forums?

 

[plasgears]

Power Jets, the original inventive organization connected with the first British jet engines, turned into a patent shop that identified all infringements around the world. I worked with a guy who heard from Power Jets frequently.

It was downright annoying, but they identified the fan engine as the better propulsion device early on. One of their first designs was a fan engine. They also predicted the value of the turboprop.

At GE we were encouraged to write patent disclosures because of the license value to the company. Now the european consortium is producing their own derived versions for the latest airbuses.

 

[Comcokid]

There are many different ways in which a patent can have value. Some of these values are not in the invention itself, but in future cost savings.

An individual patent by itself may look like it has little value and cover little. However, If there is a competitor in the same market who has patents, at some point the two companies may begin to butt-up each other and one or both companies may file infringement lawsuits. These are usually settled out-of-court by each company cross-licensing their patents. Few companies want the expense of long litigation. In such a case, a patent that appears of little use becomes a valuable item of exchange as part of the settlement and saved much more money than it originally cost to get.

Another situation I have seen was a case where a electromechanical product was designed. A minor patent could have been applied for, but the cost benefit was not obvious. However, a second company copied the product and applied for and received a patent. The cost to the first company to then prove prior art and beat down the copied patent was more than the cost saved by not patenting.

 

[IRstuff]

I forgot to mention that the biggest area for making money with patents, currently, is in pharaceuticals. In fact, you'll find that many drugs, nearing the end of their patent life, will suddenly morph into a similar drug, but with a new patent.

Minoxidil was one such drug. It had previously been marketed with the caveat that higher doses were not beneficial. Yet, as the patent on the original Minoxidil ran out, a higher dose Minoxidil was patented and continued to make money.

In fact, one of the biggest public health debates ongoing in poorer countries is the suspension of patent rights on a variety of drugs to get the cost down by letting companies infringe on the patent. Since they did not pay for the development of the drug, they can manufacture at a lower cost.

TTFN

 

[globi5]

I definitely see the benefit of patents for big corporations like pharmaceutical companies. I just doubt the value of patents for some home inventor.

Btw I heard this before, that some company patented something that was already state of the art. I personally think this is really annoying and there should be simple ways to prove prior art. I wonder whether you can just send the plans of the product to yourself and not open it. This way you have the proof (post stamp) that you invented it, before it was patented by some other company without having to spend thousands of dollars on a patent lawyer - or what do you think?

 

[IRstuff]

Bad idea. The invention of the laser took something like 15 yrs to resolve, with similar groundules, e.g., lab notebook. While there are probably enough lawyers that would work it on contingency, it'll still be a long haul.

The crux of the problem is like starting a new business, less than 10% of all patented ideas are feasible, marketable and desirable.

Your assumption that a single inventor can come up with "plans of the product" is the problem. A typical product requires multiple disciplines, a production line, a producible design, etc. Since you have no production, you cannot ensure designing a producible product. No matter what you do, producibility is king and the person that makes that happen, by definition, has the right to patent his improvements on your design.

TTFN

 

[globi5]

So your basically confirm what I already thought. A small guy is better off not patenting his idea and spending his money on R&D, manufacturing and marketing instead.
Obviously there are very simple products that could be managed by a single person. Think of that SAM splint mentioned before. (I'm not talking about pharmaceuticals, lasers or engines.)

But what can the small guy do to prevent a big company from patenting his idea and then stop him from selling it? (I'm not talking about a big company stealing the idea.)
Don't you think if he sends the product to himself is proof enough that he invented it before it was patented and should allow him to sell it?

 

[IRstuff]

You've apparently missed my point.

Having proof of precedence simply allows you to try to overturn a patent in court. It would still be years before you could claim victory, after which, you would then spend years trying to collect royalties.

Also, I believe that it's impossible for a single inventor to develop an idea well enough to do what you're asking, particularly, since it's unlikely that a competitor will have the identical product.

This all takes time. The basic patent process does not require product nor plans, just an idea that can be described narratively. By the time you actually come up with product drawings and plans, etc., it could years after the basic idea was invented, which is time lost.

Not having a patent puts you at a grave disadvantage

TTFN

 

[ewh]

Reminds me of the story of the guy that invented velcro. He couldn't find anyone to license it to, and couldn't afford to make it himself. As soon as the patent expired, velcro started appearing everywhere. Not sure of the truth of the story, but it does sound plausible.

 

[globi5]

Ok lets ask it differently:
Lets say you invented a simple spoon that changes color when food is above a certain temperature (so that the customer doesn't burn his mouth) - the plastic is already available and so is the mold for the tool - so R&D is practically zero.
You know that you'll never generate more than $1 Million in revenue (not worth a law-suit). Why would it be a grave disadvantage if you wouldn't have a patent?

I'd like to see a statistics that show how many patents actually were worth anything (made money before they ran out)? Is it more than 0.1%?
For instance the turbocharger was invented 1905 by a single inventor. Was it a great invention? Yes and definitely better than most. Did the inventor make any money with it? No.

It seems to me that paying for a patent can be like paying for an insurance that you don't need or even worse might not cover you anyway.

 

[IRstuff]

You're mixing statistics. The majority of all patents are held by companies and most are never exercised. I've gotten three through companies I worked for; but they were never turned into products nor exercised in any other fashion.

The majority of other patent holders invent mostly useless stuff; God only knows why those people bother. The majority of non-company patents don't make money simply because they're essentially useless products. The most famous useless patent I can think of readily is the chewing gum saver for saving chewing gum overnight; it came with hardware for mounting on a bedpost.

It's a grave disadvantage to not have patent protection on a real product because there's almost always someone who can undercut your price. Without patent protection, you have no legal recourse to stop them from copying your product, undercutting your prices and putting you quickly out of business.

TTFN

 

[plasgears]

The engr who invented delay wipers won against the big three in the end, but he was an old man when he cashed in. He made his relatives and charities rich.

 

[TrevorP]

Dyson - patented the bagless vacuum cleaner. Took it to the big boys (Hoover, Electrolux etc.) to try to licence it to them but generated no interest. Decided to develop and make it himself, and started what is now one of the largest (If not the largest) vacuum cleaner companies in the world. Hoover, as a response to dramatically diminishing sales, copied some aspects of his design. He took them to court and won. All this within a space of 5 - 10 years.

P.S. coloured spoons - prior art now, but could have been patented, and could well have been worth more than $1million if done so.

 

[Pud]

Hi,

How about this:

http://en.wikipedia.org/wiki/Cat's_eye

Interesting links about the inventor and monies made...


Rgds

Harry

 

[Jabberwocky]

http://wwwp.medtronic.com/Newsroom/NewsReleaseDetails.do?itemId=1114170340267&lang=en_US

Basically - a single inventor sued and won a $1.3Bn settlement against one of the largest players in the industry. Billion - with a B. He did have a small company in place which I'm sure helped, but the bottom line is:

This man's patents, past and future, netted him a Billion bucks.

 

[Comcokid]

In Jabberwocky's posted link the article indicates that 100 issued patents and 110 pending patents are involved in the Medtronic acquisition. No doubt this amount of intellectual property is worth some money.

Nevertheless, a single simple patent for someone who sees the need and the idea to meet the need can be worth a lot of money. Take, for example, the stereo cassette adapter that allows you to hook up an external audio device (CD, iPOD, etc) by using a cassette-shaped module in you cassette player. This consist of only a coil with couples to the tape player head magnetically. This was developed by individual(s) in Millwakee. From the time the idea occurred to them until they had a working example required only about 1/2 a day! In royalities and licenses, this quick idea has resulted several million dollars income!

 

[MedicineEng]

These are my toughts:
Patents can eventually worth something, depending on the country you are living, for instance in China and India it worth virtually zero, no matter the product is. If it is sucessfull, it will be copied by thousands without you ever know who is doing it.
In the developed countries where IP is still enforced this process can also be paintful.
I remember once I saw a cartoon in a newspapaer, where a samll inventor was going to a big corporation trying to license his invention and then a big laywer was saying to him:"Our corporation holds XXXX thousand patents. For sure you are infriging some of them. You would be better off it you just give us your invention for free".