Significance of Patents  
Patents have emerged as a major area of business competence. It has become as important as understanding innovation, technology, marketing, finance, corporate governance, industrial economics and strategy. They provide insights on technology, business and competition, and have the potential to affect key decisions, such as those related to the R&D and business strategies of a company, research organizations and universities.

A few examples that validate the strategic importance of patent information:
IBM generated US$ 562 million by the sale and other transfer of IP in FY ending December 2003.
Ring-pull cans: Inventor licensed the system to Coca-cola at 1/10 of a penny per can. During the period of validity of the patent the inventor received 148,000 UK pounds a day on royalties protected its business method by patenting its one-click method. This not only aided the company in protecting its methodology from competitors, but also helped it in creating a niche for itself amongst a multitude of shopping portals.
Microsoft has moved from 1 patent in 1990 to over 2500 patents in 2002.
Gillette Mach 3 is protected by a strong portfolio of 35 patents (including patents on the manufacturing process), which deters competitors from entering the “triple-blade razor” market.
British Telecom’s (BT) failure in identifying and analyzing the true potential of the hyperlink patent (filed in 1976 and granted in 1989) not only resulted in a lost opportunity but also led to a legal battle, which BT eventually lost.
Worldwide companies are increasingly pursuing patent protection of their innovations, and are looking at building large patent portfolios. For example, in the five-year period, 1997-2001, the USPTO granted almost half a million patents. Over 700 companies/institutions were granted over 100 patents or more in these five years. The number of patents filed by these organizations is much more. These numbers clearly indicate that there is a great deal of patenting activity in companies across the world.
© 2008 Global Institute of Intellectual Property - All Rights Reserved