How to transform inventions into profitable assets for your SME?

How to transform inventions into profitable assets for your SME?

Innovative ideas are the basis of most prosperous companies

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However, the ideas themselves have very little value and must be developed, transformed into innovative products or services and marketed successfully for the company to reap the benefits of its innovation and creativity. Intellectual property, particularly patents, can be essential when converting innovative ideas and inventions into competitive products that significantly increase profit margins.

Also, your SME can use patents to obtain royalty income by granting patents for patented inventions to other companies that can market them. Not only will this save your SME money, but it will also provide you with a stream of income from your inventions or your employees' inventions, without the need to invest in your marketing.

For practical information on the costs of acquiring patents, the time needed to grant them and other frequently asked questions, consult the link or go to your national intellectual property office.

Someone else could patent them:

In most countries the first person or company that applies for an invention patent will have the right to the patent. This means in fact that, if you do not patent your inventions or the inventions of your SME employees, another person, who may have developed the same invention or an equivalent invention later, may patent and legitimately exclude your company from the market. , limit its activities to the continuation of the previous use, when the patent legislation provides for such an exception, or ask your SME to pay a fee to use the invention under license.

Competitors will take advantage of their invention:

If the product is successful, many other competing companies will be tempted to manufacture the same product using their invention, without having to pay for such use. Large companies can take advantage of economies of scale to manufacture the cheapest product and compete at a more favorable market price. This can significantly reduce the market share of your SME concerning that product. Even other small companies that compete with you can manufacture the same product and often sell it at a lower price since they do not have to recover the research and development costs incurred by your SME.

The possibilities of licensing, sale or transfer of technology will be greatly hindered:

Without intellectual property rights, technology transfer will be difficult, if not impossible. The transfer of technology presupposes the ownership of a technology that can only be obtained through the adequate protection of intellectual property. Besides, when negotiations occur for the transfer of a given technological discovery without the technology in question is being protected by intellectual property, the parties will be reluctant to disclose their inventions; for fear that the other party will subtract the invention. The protection of intellectual property, especially patent protection, is essential for the acquisition of technology through licensing.

Reasons to patent your inventions

Exclusive rights:

Patents provide the exclusive rights that usually allow your SME to use and exploit the invention for 20 years from the date of filing of the patent application.

Solid position in the market:

Thanks to these exclusive rights, you will be in a position to prevent other people from commercially using your patented invention, thereby reducing competition and acquiring a prestigious position in the market.

Higher return on investments:

Having invested a considerable amount of time and money in the development of innovative products, under these exclusive rights, your SME could market the invention allowing you to obtain a higher return on investments.

Opportunity to sell the invention or transfer it under license:

If you choose not to exploit the patent yourself, you can sell it or transfer the rights to another company to market it under license, which will be a source of income for your SME.

Increased bargaining power:

If your SME is in the process of acquiring rights to use the patents of another company, through a license agreement, your patent portfolio will increase your bargaining power. That is, it is possible that your patents will be very interesting for the company with which you negotiate and your company could enter into a mutual licensing agreement whereby, in short, both companies could exchange patent rights.

A positive image of the company:

It is possible that associated companies, investors and shareholders consider that the patent portfolios are a sample of the high level of technical knowledge, specialization and technological capacity of their company. This can be useful when raising funds and looking for business partners and could increase the value of your company in the market.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.

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