Response to WSJ Online Article: What Business Owners Should Know About NOT Patenting

Today, the Wall Street Journal Online published an article entitled "What Business Owners Should Know About Patenting". In this article, Stuart Weinberg interviews James McDonough, an attorney at the well-respected Fish & Richardson law firm. Mr. McDonough gives excellent advice about the process of building an intellectual property portfolio.

However, he skips over a crucial first step--does building a patent portfolio really create long term value for your business? In many cases, the answer will clearly be "yes". In many other cases, building a intellectual property portfolio could actually reduce or destroy your company's asset value. By focusing his advice on the portfolio building step and later, Mr. Donough ignores the foundation on which your company should start the portfolio-building process.

First, an admission: I created a lot of value for myself and my law firm partners over the years by obtaining patents that did not ultimately create business value for my clients. I am not proud of this fact but, as a patent attorney, my job was to get a patent for a client if they thought they needed one. My job was not to tell them whether they needed a patent to support their business objectives. And, certainly if my client was willing to spend $10 - $30K for me to obtain a patent (which is the current cost estimated by Mr. McDonough), my assumption was that they had run the numbers and determined that a patent was a good spend for their business.

I now wear a different hat: as an Intellectual Property and Patent Business Strategy consultant (more info here: http://www.jackiehutter.com/), I do not create value for myself by billing clients on an hourly basis. Thus, I am able to look at intellectual property from a fundamentally strategic basis--does building an intellectual property portfolio create long term business value for my client? Unlike traditional patent attorneys, I can create value for myself by telling a client that they do not actually need a patent to maximize their business value. With all due respect to patent attorneys like Mr. McDonough, under the existing model of patent procurement, law firm patent attorneys cannot make a good living by saying "no", even if it is the best business interests of their clients to do so.

This is not to say that patent attorneys are not currently serving their clients' best interests. To the contrary, I have the utmost respect for the work done by law firm patent attorneys. Indeed, as an corporate patent attorney, I hired Mr. McDonough's law firm for high-value patent matters. And, if I had a client with needs for a high-quality patent in certain technology areas today, Mr. McDonough's law firm would be on my short-list of patent providers.

My goal is with this posting is not to criticize his advice, but to add that prior to taking Mr. McDonough's advice of working with a "skilled intellectual-property attorney to develop a plan for building your IP portfolio", you should first determine whether you will create and maximize your company's business value by building a portfolio in the first place. In short, prior to building, you must first decide decide if a proper business foundation exists for doing so.

When might it be in the best business interests of for a company to not get a patent? Some common ones situations are:

• Your product business cycle is very short such that a patent will issue long after your product is finished in the market
• Disclosure would give away critical trade secret information that would empower your competitors
• You have no interest in ever enforcing a patent in court, no matter how strong the claims of your patent

There is no doubt a myriad of additional reasons why a business should not get a patent, and there are as many or more reasons that a company should build a patent portfolio. An intellectual property strategist, such as myself, or a good intellectual property attorney, such as Mr. McDonough, can work with you to work through the various scenarios that may exist in your company's particular situation. Prior to making a decision one way or the other, however, you should be prepared to walk away from the process if you determine that your company's long term value will not be maximized from starting this process. Put another way, what you know about not patenting is just as important to your business success as what you know about patenting.