This is a transcript from a section of the course “Patents 340 – Invention Rating Checklist,” which is available here at IP.Education.
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Competitor Product Fit
Large companies often look at patents as defensive tools.
They want to keep other people from copying them directly.
To some extent, this viewpoint can be slightly arrogant.
The truth is that there are many people who are equally as smart and inventive as you – or maybe not nearly as smart and inventive as you – but they will change and respond to your invention.
Remember that your invention was developed with your own personal set of constraints.
But your competitors will not have the same constraints, so they will develop something different.
Your software product may use a certain set of tools, frameworks, programming languages, metaphors, or architectures that you know and love.
Your competitor might build a competing product using old, antiquated frameworks.
Or they may build a product using new technologies that won’t come out for 10 years.
Your product is designed with your set of tools, your current technologies, and your budget.
However, the patent will be around for twenty years.
We cannot possibly guess what will happen to the technology over that time, and there will be lots of people who will try your invention in countless ways.
One of the most interesting things to watch is how today’s technologies get beat up, twisted, and changed around over time.
It is fascinating to see technologies and inventions evolve and change.
With the competitor market fit, we are looking to see if your competitors are likely to use the invention.
Look outside your company’s universe and put yourself in your competitor’s shoes.
Does the invention look like something they would want?
Remember that patents turn into playing cards in business.
Businesses use them to bring parties to the negotiating table, to leverage things like joint venture agreements, to swap technology, to set up and enforce partnership arrangements or exclusive deals, and many other uses.
In some cases, patents can help enforce employment agreements, noncompete agreements, and many other little things that you might not have thought about.
Valuable patents are those that *competitors* infringe – or want to infringe.
In the previous section, we evaluated how the patents map to our products.
The truth is that if we were the only infringer, the patent would not have much commercial value at all.
The value really comes when we can negotiate or trade the patent with someone else.
In this section, we look outside to our competitors, but we also look to companies who might not be our competitors, but who could use our solution in some way.
We might not ever want to sell or license our technologies to a competitor.
That is OK.
We are not making a business decision with this analysis: we are just trying to find the value of the patent asset.
The value of the patent asset goes up substantially when a competitor wants to copy it.
In reality, the value of the patent is *all* about how badly the competitor wants to copy it.
Even if we don’t implement the invention, it still might have value to someone else.
A level 1 score is that there is no known or expected competitor activity.
At this level, you have to wonder why you would even bother getting a patent if there is no need to keep competitors at bay.
A level 2 score is that the invention is a solid improvement to a competitor’s product when different solutions exist.
This level applies when your invention points out a problem with the competitor’s product.
Once the competitor knows that the problem exists, is it easy for them to find a different solution?
A level 3 score is that the invention addresses a shortcoming in a competitor’s product that a third party may implement.
This may apply when a third party may build a software plugin that adds a feature – or when an aftermarket company may provide the solution.
A level 4 score is when the invention addresses a shortcoming in a competitor’s product is a substantial manner.
A level 5 score is when the invention addresses a direct need of a competitor’s product and it fits in the competitor’s strategy.
These two levels try to assess how likely it would be that the competitor will copy the idea and try to build it into their products.
The concept here is that we might have a blocking patent.
A blocking patent may be a roadblock for our competitor.
This could be a great bargaining chip that we can use later on.
It might be two years or twelve years down the road, but we are building an asset base from which we can negotiate.
As an aside, if you are a startup company, a bigger company may acquire you because of your patents.
Many times, an acquiring company might buy you or your patents because they are worried that they might infringe the patents.
Rather than getting sued, they just purchase the company and control the assets.
But what you might not realize, is that many companies buy patent assets that their competitors might infringe.
They might not infringe, but their competitors do.
Companies who are being sued for patent infringement by a competitor will often go out and buy patents on the secondary market so that they can counter sue.
The buyer doesn’t care if they infringe, they only care that their adversary infringes.
Startup companies might not appreciate that not only should they be targeting potential infringers as acquisition targets –
They should be targeting anyone who competes with those infringers.
The enemy of my enemy is my friend.