“One of the biggest mistakes that people make is to get a patent way too early. Remember that the good inventions are always yet to come.” – Russ Krajec
In this episode, we talk to Russ Krajec, a “recovering patent attorney” who believes that IP (intellectual property) can be used as a financial instrument. He is the author of “Investing in Patents” and one of IAM’s Top 300 Patent Strategists. He talks about using patents as a financial instrument in engineering, and why it is important for engineers to patent their inventions.
Here Are Some of the Key Points Discussed About Using Patents as a Financial Instrument in Engineering:
- It is an honor for an engineer to get a patent because it is an award that is just short of a Nobel prize. It means that you have created something that nobody in history has ever thought of or created. Small companies can use their patents as weapons against other companies that are stealing their inventions. These patents must survive litigation, licensing, and must be of the highest quality possible. Big companies get many patents each year, so they do not focus on the finer details of their patents.
- If your patent is valuable, you can collateralize it and insure it to be enforced against other people. Having patents makes investors feel good, which is an important value proposition. Many investors make the mistake of not looking carefully at the patents before investing in them, which could cause them to lose money.
- To evaluate a patent, you must be sure that it is detectable. You must be able to detect if your competition is using what you have a patent for. If it is not detectable, then you have put your company at risk.
- If you go to a patent attorney, you will almost certainly get the patent. The patent attorney must get you a patent and make money by doing so. It is your job, not the patent attorney’s job, to find out if your patent is good or bad, and if it has any value.
- The book, “Investing in Patents,” will help you to evaluate inventions and figure out if it is worth patenting. The best way to learn about investing in patents is by experiencing and learning from your mistakes.
- Look at patents from a business standpoint. Ask yourself if the patent will help or hurt you and is it worth the investment. If you want to get a patent, remember that a patent only has value while there is a product in the market. Your idea might never make it to the market during the period that your patent is enforced. Do not make the mistake of thinking too far in advance and get “wishful thinking” patents. You want an idea that will make it to market. If you can sell the patent or the product that the patent covers, you will start to create value for the patent. Until you figure out what your customers want, all ideas are worthless.
- One of the biggest mistakes is to get a patent way too early. You do not have enough data or do not fully understand the technology surrounding it or the customers. You will get smarter about everything in time and will be able to make proper business decisions about getting the patent.
- Patent insurance gives a company an amount of money that they can spend on legal fees for enforcing the patents. Having enforcement insurance means that you can take someone to court if they try to steal your ideas or products for themselves.
- When doing patents, you get to touch an idea, involve yourself with it, and get to work with it. And after a few weeks, you move on to the next patent. A patent lawyer can create value for your patent in a short time.