Patent lawsuits show that patent owners use their patents to exclude competitors, to generate revenue, or both. These same lawsuits show that patents are useful, but not so tidy. Companies must fight tooth and nail to get the patent protection they need, to avoid patent liability, and to best exploit their own patents. There are no silver bullets.
If you ask a chief executive if his or her company has sufficiently protected its technology, the executive might respond “Yes, of course! We own our technology, and there is nothing blocking us from our markets.” While this is a wise “stock” answer because it inspires confidence and deters competitors, the true answer is murkier for most companies.
Problem number 1 – We are not alone. While many companies have patents, few companies have patents blocking their competition. Many patents cover specific technologies competitors can avoid. Companies that can exclude their competitors must tirelessly pursue patents on the general product features critical to their market.
Problem number 2 – We are vulnerable. Because patents are so complex and competitors seek their own patents, most companies will face a “bet-the-company” lawsuit threatening their own participation in the market. The best-prepared companies are aware of their most important product features, and of other patents that might block those features. They have a plan to address threatening patents, perhaps a license or an opinion of counsel that the patent is invalid.
Problem number 3 – Our patents will not insulate us. A common misconception is that a patent gives its owner the right to use their own patented product. This is not true. The patent only allows its owner to exclude others from using the patented technology. Someone else may have a patent covering a different (or overlapping) part of the same product.
Companies that use their patents wisely without a false sense of security tend to be the most successful, surviving that patent lawsuit filed against them and perhaps earning extra revenue by licensing out their own patents. Those that shy away from the hard work lose out more often than not; some do not survive.