Envisage to Optimize – The recipe to Monetize

When was the last time you thought of an idea and kept it at just that – an idea. May be last summer, last second or may be you are thinking of one as you read this. A few smart chaps go for the legal way and register their innovation as a patent. An innovation which can be claimed as their own and have an exclusive right on it. However unfortunate it may seem, there is a cost required to maintain this exclusivity of your innovation. Here comes the trade off, the question of to be, or not to be. Why should I spend my money on a piece of document just for the sake of having an exclusive right. Well, when you envisage the potential of your innovation is when you can realize the power of optimization of your patent portfolio.

With the advent of hugely advertised upcoming technologies that we may see in the market, we often ignore the innovations which are omnipresent. US patent 5,836,038 is a patent assigned to an individual inventor. The patent describes a magnet coupled eraser which may be used with a white board. The patent expired due to non payment of fees in 2002. Though the due diligence of the patent before considering it for expiration cannot be commented upon, however, let’s try to envisage the widespread use of the innovation.

Let us use approximation on a sample set for analyzing the worth of the invention. If we consider the number of whiteboard eraser manufacturers spread across the United States to be around 1000, each manufacturer may produce around 1 million whiteboard eraser units every year. Of these, let us assume that 50% are magnet coupled erasers which calculates to 500 million whiteboard erasers. Considering the cost of the whiteboard eraser to be $2 - $5, the cost associated with this innovation becomes $1 - $2.5 billion. Had the patent been active in US alone, imagine the licensing revenue it may have generated. Considering the fact that China is also an emerging market for such stationary items, had the patent covered other jurisdictions, the kind of patent monetization is immensely huge.

The Intellectual Property universe has witnessed the growth of the Non-Practicing Entities or the patent aggregators. The business models and the operational behavior of these entities are frequently debated and people have diverse sets of opinions on their ethics. However, if we zoom into the sector of small yet powerful innovations, these entities have set an example of nurturing the saplings to turn them to fruit laden trees. The differentiator has been the realization of the power of innovations and supporting them to exist. There has also been a significant streak of success with the patent interdealer brokers. These entities have also been a great supporter in nurturing the innovations by facilitating the monetization of patents. Well, in some cases, it also promotes the mantra of – A burden to one is a gain to some.

Innovation will never cease to exist. One has to envisage the potential of the innovation and optimize the cost associated with it. That’s the recipe which will stir up the aroma from your latent patent portfolio – the recipe of Patent Monetization.