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Top 10 IP Mistakes: No. 9 Dismissing IP

DNAUnlike the blissfully unaware businesses of No. 10, the dismissive intellectual property (IP) owner understands that he has IP but misunderstands its economic value, protective capacity, or his own ability to enforce it. A perfect example is a biotech company located in Ohio that believed it was impossible to protect their technology with patents. We will call them NoBio. In their defense, biotech has certain special issues that can make these cases difficult to patent. But, we did an assessment of two of their core technologies and found that they were likely to be patentable, and NoBio even went so far as to hire us to write provisional patent applications covering the technology. Regardless, NoBio remained skeptical and apprehensive, and ultimately decided not to follow through when the time came to convert their applications into non-provisionals. Their reasoning? ... The space was too crowded... Of course, this is exactly when a patent can be most valuable, so in my view this was not a sound business decision.

As you might expect, this story does not end well for the dismissive IP owner. While NoBio was failing to act their closest competitor was diligently populating the same space with patents. So, their competitor remained free to operate while NoBio had to operate in an IP mine field. In the end NoBio stepped on a landmine, and now as part of a settlement for patent infringement they have been compelled to license their competitor's technology. NoBio missed an opportunity to soften the blow by having a counterbalancing licensing income stream, or if they were lucky maybe even a cross-license with their accuser. Instead, NoBio's failure to act left them with no licensing income, and no bargaining power. Clearly, NoBio misunderstood the value of their intellectual property.

Stay tuned for more of the Top 10 IP Mistakes.

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