Benefits of Applying for a Patent
Patents are a part of a company’s business strategy. Patents can be used to attempt to protect the company’s products against imitators, to protect the company’s market share and to expand to new business fields. One advantage of patenting is that a patent provides an exclusive right to a product based on the patented invention. Competitors are forced to invest in development of substitute products as long as the patent’s remains valid. When a company’s product is based on a patented invention, and other companies are prohibited from producing a similar product without permission, the company is able to set the price of such product at a higher level than would be the case under normal, competitive circumstances. A company can either retain all rights or, if desired, grant competitors a license, that is, a right to use the patent in consideration of a license fee. The terms of such license arrangements vary from parallel licenses to exclusive licenses [188.8.131.52.3 Geographical Scope and Exclusivity of the License], which grant the licensee an exclusive right to utilize the patent limited in terms of time, geographical area or method of use. The license fee is normally based on the commercial value of the license, which in turn is dependent on the license scope.
A company should, however, consider whether patenting is the best way to protect the company’s inventions. All inventions are not patentable, see further in [184.108.40.206 Preconditions for Patentability]. Moreover, it is worth assessing the patent’s financial benefit. If development in the relevant field is rapid, the value of the patent may diminish quickly as new products and methods replace those available on the market. A patent does not have a value as such, but in infringement situations it will provide an opportunity for defending against or presenting claims.
As regards the company’s financiers, investments in patents can be risky since it is difficult to provide even indicative advance estimates of the results of product development. Therefore, financiers usually value patents which have already been applied for and granted, and may be reluctant to invest in the development of new inventions.
When applying for a patent, a company should also assess whether it has the requisite financial resources to defend the patent in potential infringement situations. Patent infringement proceedings are expensive and time consuming, requiring detailed technical and legal expertise.
When considering whether to apply for a patent, it is advisable to seek the advice of experts, as the financial value of the decision may be quite significant. The applicant is advised to become familiar with the already registered inventions using the register of the National Board of Patents and Registration). Financial support for filing patent applications can be applied from the Foundation for Finnish Inventions. For further information regarding the application process, see Applying for a Patent [220.127.116.11 Applying for a Patent].