Week 11 Blog #4: Patent Advice for Small Companies

In Ms. Kasznik's lecture she quoted that a patent serves as a strategic asset that can be used as leverage in any situation and that for small companies and start-ups, their advantage in filing patents was the fact that they have the ability to innovate faster than most larger companies who are primarily focused on defending the patents they already possess. While looking more in-depth into this fact, I happened to come upon an article published by Todd Hixon of Forbes who argues that for most small companies, patents are just about worthless. Mr. Hixon writes that many entrepreneurs misunderstand the value patents create and how difficult they are to enforce.

I believe patent owners struggle with understanding that patents function more so as an attacking mechanism rather than a defensive tool in the sense that patent owner are free to go after those parties they feel are infringing upon certain elements within their patent, but the patent doesn't give the owner the right to develop that technology solely without any interference from other parties. We see this in the multiple patents we have reviewed over this course such as the numerous patents for a beverage cup protector that essentially were patents that were all quite similar, but had a few differing characteristics that made each one non-obvious and novel.

The issue for small companies however is the fact that there exists so many blockades to them filing patents for their work or simply getting their business off of the ground. Mr. Hixon gives the example of a small company where the product design might be protected by a patent, but the manufacturing process might be subject to another company's "blocking" patent. Furthermore, smaller companies in the information technology world are attacked by the broad patent portfolios of larger companies and with the major players in the market dominating this patent pool, new entrants are left in the cold.

With all these factors in play, Mr. Hixon provides some suggestions for small technology companies to help them grow outside of a reliance on their patents. Some suggestions include not basing a company's business strategy on patents, filing patents in the U.S. and not beyond that, paying close attention to patents that others hold which might enable competitors to block you, and build business on real competitive advantages such as product value-in-use, customer relationships, and rapid innovation. While Mr. Hixon provides some good advice in this matter, I still believe patents have a good amount of value for small companies in terms of defending their products and getting noticed on the map by big competitors who might seek to buy them out. While there are certain risks associated with attempting to base a business model off of patents, I wouldn't say patents are completely worthless to these small companies.