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A small company (e.g., a startup) will never sue to enforce its patents because suing is too expensive. Because they won’t sue, they won’t be able to license th
by bdowling 4y ago
A small company (e.g., a startup) will never sue to enforce its patents because suing is too expensive. Because they won’t sue, they won’t be able to license the patents to anyone.
For a startup, however, patents can still have value in at least the following ways:
1. Patents on improvements may discourage larger competitors from suing the startup for infringing the competitors' patents, because the startup may counter-claim infringement of its improvement patents.
2. A potential acquirer may want to acquire the company for its patents. The acquirer may be an established competitor who does have the resources to assert the patents against other competitors, either offensively or defensively.
3. Patents may encourage investors who see patents as residual assets that would be liquidated if the company fails.
- em3rgent0rdr 4y agoValue (1) illustrates the absurdity of the patent system. Innovation, the thing the patent system ostensibly protects, is put at risk by..patents. And so the value of a patent for inventors is to protect their innovation from...patents.
- bdowling 4y agoThere are very few places in law where you can legally stake a claim within someone else's territory and exploit it for profit. Our patent system is one of them because it allows one inventor to patent an improvement to another inventor's patented invention. That should (1) encourage early inventors to continue to invest in improving their inventions before someone else does and (2) encourage new inventors to improve on existing, still-patented inventions by giving them ways to profit from their improvements.
- bdowling 4y agoTo be clear, that anyone can improve upon anyone else’s invention and claim their improvement as their own, to the exclusion of the prior inventor, is what drives innovation.