Congratulations inventor, you’ve made it this far and you are now the proud owner of a patent! The process of getting the patent was long, and costly, so now that you have it what do you do with it? Besides hanging it on your wall and telling all your friends.
On the most basic level, a patent gives you the ability to exclude all others from the invention the patent teaches. This 20-year term means that nobody else can make, sell or otherwise take advantage of your patent. If they do, they are infringing the patent and you can sue them. However, a patent is much more than an enforcement tool, it can also be your most valuable asset.
Even before your patent is issued, your invention may form the basis of a start-up company. Perhaps, you’ve invented the new wonder-drug and you decide to leave the world of academia to build a pharmaceutical empire. With your patent in hand, there are a few things to consider before you venture into the world of IP commercialization. First and foremost, you want to make sure to protect your IP. You’ll always be the inventor of the patent, but it is good practice to assign the patent ownership to the company. Both patents and companies often have co-inventors or co-founders, which can make things complicated. If the company does not own the IP, a fall-out between co-inventors could prove fatal. In this case, the unhappy inventor could essentially hold the IP hostage preventing the company from functioning. Making sure the company owns the IP would allow for a disgruntled co-inventor or co-founder to leave the company with the IP still intact.
It’s also important to account for future innovation. As the company grows, employees may develop new innovative ideas for which you may seek patent protection. In these events, be sure to have contractual agreements in place to ensure the company owns the IP, not the employee. In the absence of an agreement, the law will favour the employee as owner. The company may gain a shop right to use the invention without infringement but won’t own and be able to commercialize the invention.
Having ownership of a patent means you can monetize your invention through licencing agreements. Using the COVID-19 vaccine for example, the patent owners of each vaccine have the ability to license others to manufacture and distribute the vaccine. This has been a particular cause for concern due to compulsory licencing during emergencies, recently discussed on the IPilogue. Global pandemic aside, inventors have the opportunity to capitalize on their success through a variety of licencing schemes, be it one-time payments, annual licencing fees or royalties.
It’s also important to consider that not all inventions can stand-alone. Consider an inventor who designed an eco-friendly jet engine. The engine alone doesn’t do much good, but licencing the invention to the companies that build planes offers a huge source of revenue. Licensing is often a two-way street. Your competitors may benefit from your invention, but their success is your success as well. By licencing your eco-friendly jet engine, you may ward off the competition from attempting to develop a non-infringing product. This not only keeps the competition in check but allows you to benefit from the success of all the licensees.
A patent is a powerful tool. It can be the basis of a company and open the door to a profitable licensing scheme. So long as you have a strategy to protect and license your patent there is a world of opportunity awaiting. As an inventor, you have 20 years to capitalize on your patent, so make the most of it.
Written by Maddie Lynch, JD Candidate 2022, enrolled in Professor D’Agostino’s Directed Reading: IP Innovation Clinic course at Osgoode Hall Law School. As part of the course requirements, students were asked to write a blog on a topic of their choice.