As we begin the 21st century, the world of business is in the throes of extreme change– with “World” being the key part of this description. Globalization is driving much of the change we experience in the United States. The factors that once provided the dominant sources of competitive advantage in business — efficiency, productivity, scale — are now often best provided by firms overseas. The impact of the shift of traditional U.S. industrial mainstays offshore is profound.

Yet change brings opportunity for a new source of competitive advantage: innovation. Corporations are increasingly turning to ideas as the premier source of differentiated products and services.

Commercializing innovations can be broken down into a four-step process:

  • Generate ideas
  • Differentiate through design
  • Develop assets
  • Take to market
  • The key step in this process — where sustainable competitive advantage is gained or lost — is in the development of the assets. Your innovation must be protected in order to be valuable — in order to preserve its scarcity and uniqueness. Without protection, assets can be copied. And copies create commodities.

    Protection can come in several legal forms: copyright, trademark, trade secret, or (most significantly) patents. A patent, simply stated, grants the exclusive right to keep others from using an invention for a period of 20 years. A patent may be enforced if others infringe on it, or it may be licensed or sold. The vast majority of patents, however, go unused.

    Business leaders often see patents as an arcane branch of the law that generally costs a lot of money. They are not treated as an integral part of corporate strategy. Any decision on whether to proceed with filing a patent application on an invention should be made based on strategic company objectives, such as increasing shareholder value or protecting a key market position. C-level business leaders should be controlling the patent process and assuring that it is aligned with the overall business goals.

    If you are a business leader whose organization holds patents or has filed for patent protection, it’s time for a gut check. Ask yourself some of the following questions:

    • Am I getting my money’s worth from my patents?
    • Do they cover what I think they cover?
    • Have I patented things I shouldn’t have?
    • Are my patents making my company more successful?
    • Am I really protecting my key business interests?
    • Can my competitors design around my patents?
    • Am I confident in my “freedom to operate” with my patented technologies?

    This last item is worth special consideration, and is especially important when taking a patented technology to market. While a patent grants exclusive rights to an invention, it does NOT grant the right to use that invention.

    There may be other considerations that limit your “freedom to operate.” Here’s an analogy: just because you own a piece of land doesn’t mean that you have the right to build a house on it. There may be zoning restrictions or covenants that restrict the use. There may be easements or liens on the property. You may not even have access to the land. Similar situations exist with patents.

    So what’s the solution? A new way of looking at patents is required — one called “patent design.” (At Spore, we call it “patent smart•”). Returning to the real estate analogy, assuming that you did have the “freedom to build” on your land, you have two options. You could simply go to a builder, ask for a house, and see what you get. Or, you could go to an architect, describe your objectives, interactively design your house, and then take it to a builder, who would build what you want. The key point is that patents can — and should — be designed to serve a business goal.

    By taking the step to design your patent, you will achieve several benefits. The first and most obvious is that you will have control over the process and will get what you set out to achieve. Designed patents can help avoid litigation, provide stronger protection for ideas, and be more effective at blocking competitors. Patents that go through the design process are granted more quickly and more often. Business leaders can relate to this: you will get a higher ROIP• (Return on Investment in Patents.)

    The innovation economy demands that business leaders turn ideas into assets. Patents protect key sources of differentiation and competitive advantage, but must be designed in order to maximize their business value. Companies will achieve a higher ROIP from patenting smart.

    JiNan Glasgow is co-founder, CEO & president of Spore, Inc. and is recognized worldwide for her expertise in intellectual property (IP). As an inventor, patent attorney and prior United States Patent & Trademark Office (USPTO) patent examiner, JiNan uniquely understands intellectual property from the industry, legal services and government perspectives. For more information on the service offered by Spore, Inc, please visit www.sporeusa.com .