Patents can be important tools for business development. However, in order to use them effectively, it is necessary to understand how they work.

The first thing to understand is that you do not need a patent to practice your invention. The patent is a “right to exclude” others from making/selling/using the invention.

The second thing to understand is that the less details in your claim, the broader the scope of the patent. For example, if you claim a red widget, a blue widget does not infringe. Unless the color red is important to the function of the widget, the word “red” does not belong in the claim.

The third thing to understand is that getting a patent is your reward for providing a description that is sufficient forone of ordinary skill (in the relevant technology) to actually make or do the invention. That means you need to “tell all”. The price for holding back can be invalidation of your patent after it is granted.

The fourth thing to understand is that there are no “patent police”. Once the patent is granted, the owner is responsible for identifying infringers and filing a lawsuit against them. These infringement lawsuits are civil suits so there is no government interest in how they are resolved (just like personal injury, breach of contract and divorce). There are “private enforcers” that will file and litigate patent infringement lawsuits for a portion of the damages if the situation warrants it. These enforcers are called non-practicing entities (NPEs). The cost of an infringement suit (in legal fees) is typically measured in millions of dollars for each side. The proceedings can go on for years. This means that patents are most suitable for products expected to generate revenues measured in tens, hundreds or thousands of millions of dollars.

The fifth thing to understand is that having a patent is no substitute for having proof of concept. Investors want to see proof that the product works and that there is a market for it. That is what closes deals. A patent (or even a pending application) can sweeten the deal, but it does not drive the bargain by itself. Inventors that think they will file a patent application and sell the idea without product testing and/or marketing research are likely to be disappointed.

The sixth thing to understand is that the patent office doesn’t care. The Examiner that handles your application is typically indifferent as to whether the final answer is “yes” or “no”. The person that cares about your application is your representative (Agent or Attorney). Look for a representative that has a practice focused on dealing with Patent Examiners.

The seventh thing to understand is that the process of getting a patent granted is both costly and time consuming. The success stories usually involve inventors that launched a company (or product) after filing an application and used part of their revenue stream to fund the patenting process. In other words, a patent strategy should be part of a business plan not a substitute for a business plan.