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Offshoreenergy.dk: Why patents are vital for a company

February 3, 2016

There are two major reasons for focusing on patents: To ensure that you do not infringe other’s patents and to protect your know-how. Both scenarios are crucial for a company.

The consequences of not focusing on patents can be fatal. This is the conclusion of European Patent Attorney Jens Jørgen Schmidt, partner in Zacco Denmark.

He mentions that there are two main reasons for focusing on patents. One is to ensure that your company does not invest a lot of money in developing and selling a product that turns out to be patented by another company.

“Let’s imagine that you have developed a valve and have delivered for 10 mil. EUR of your product to customers and it turns out that another company has patented it. In that case your company would have to pay compensation and damages to the patent owner and give up pending orders. This could potentially close a company,” says Jens Jørgen Schmidt.

The other reason for taking out patents is to protect the rights for your own products. A development of a new product is often a big investment, so it is important to ensure that your time and money are not wasted.

“By patenting your product you can ensure that your investment remains an asset for your company. The patent gives you the right to sue a company and prevent a competitor from copying you. This is crucial to ensure a company’s future – and also often a salient point for potential investors and/or buyers of your company. However, only few cases end up in court, so the patent often functions as a preventive action,” explains the Attorney.

He states that a patent is also important when you enter into cooperation with a manufacturer in order to produce your products. Before investing in new machines, tools or other the manufacturer will often need a guarantee that his investment is not at risk.

“So my advice is that companies already at the idea stage screen the patent field to make sure that no other company has already patented the idea. In the process of development it is important to take the necessary legal steps to make sure that you protect your idea. After your product has been introduced to the market I would advise companies to continuously keep an eye on new, similar products to make sure that they do not infringe your patent,” says Jens Jørgen Schmidt.

Time limit
There is a limit of 20 years for a patent. However, the first two and a half years after having developed a unique product you have the opportunity to protect your invention by keeping the right to patent your products all over the world. This gives you the time to find out if and where there is a market for your product. It would typically cost around 13,000 EUR to do that. If you wish to patent your product after that period of time you would have to consider in which countries you want to protect your invention.

“Sometimes companies also choose to swap patents – if another company has invented a complementary product and there is a mutual interest in having the opportunity to benefit from eachother’s product. Another possibility is to admit other users to use your product by paying a license per item. This is often seen for instance in the car industry,” explains Jens Jørgen Schmidt.

There is no exact price for a patent – it depends among others on how many countries that you want your product to be patented. Meanwhile, the Patent Attorney explains that it typically will be an investment of for a company of about 67,000 to 130,000 EUR to take out a patent covering the important markets – this includes the fee to the attorney.

Read the original article here.