Posts Tagged ‘ramesh rajaduray’

“If You Guys Were the Inventors of Facebook, You’d Have Invented Facebook”

Sunday, March 2nd, 2014

In the movie “The Social Network”, Mark Zuckerberg creates Facebook after being engaged by the Winkelvoss twins and Divya Narendra to build their dating site. Facebook becomes a massive success, but the Winkelvoss twins and Narendra accuse Zuckerberg of stealing their invention. This enrages Zuckerberg, and he retorts, “If you guys were the inventors of Facebook, you’d have invented Facebook.” Eventually the parties settle and the Winkelvoss twins and Narendra receive a large settlement.

facebook_logo2While “The Social Network” raked in hundreds of millions of dollars at the box office and received critical acclaim, a nagging question remains:  Would this incident have been so dramatic had the Winkelvoss twins and Narendra patented their idea BEFORE engaging Zuckerberg?

If they had patented their idea, and then sued Facebook for patent infringement, it would have resulted in a common patent infringement lawsuit. Zuckerberg’s zinger “If you guys were the inventors of Facebook, you’d have invented Facebook” might have been replaced by a lawyerly, “Your patent’s claims don’t cover our product under our claim construction.” Definitely not as memorable or dramatic!

Drama aside, there is an important lesson here: If you feel that you have an invention, it is advisable to file a patent BEFORE disclosing it to a third party, especially in a first-to-file jurisdiction such as the USA or Canada. That way if the third party does use your invention and build a multi-billion dollar company, you’ll have stronger grounds for claiming theft of intellectual property.  Otherwise, you might see your convoluted and expensive story on the big screen too!

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Patents – A Marketer’s Game Too

Sunday, December 15th, 2013

Although we do it all the time, the decision to purchase a product is actually a complex calculation.  The purchaser is assessing value, considering alternatives and evaluating the veracity of the claims made for the product.  Good marketers know this and look for ways to add weight and credibility to their promotional messages.  One source of third-party validation that doesn’t always spring to mind is the company’s patent portfolio.

Patents can be a powerful way for a company to differentiate itself from its competitors.  Labelling a product (or process) as “patented” or “patent pending” creates a perception that it is “cutting edge” or “technologically advanced” and a clear improvement over competitive “commodity” offerings. By branding innovations and promoting their patent status, marketers also imply that the consumer can only obtain these unique characteristics from their products and not those of their competition.

The same principle applies to corporate branding.  The size and growth rate of a patent portfolio are important data points that a clever marketing department can use to differentiate a company from its competitors.  Even significant patent litigation wins can be useful weapons in the marketing department’s arsenal.  Litigation demonstrates to consumers that a company believes its technology is truly valuable and worth fighting for (and by extension, worth buying).  A positive court decision is useful third-party confirmation of a company’s unique technical capabilities.

So if you’re a marketer looking for an edge, reach out to your legal or IP department to discover the gold buried in your company’s patent portfolio.  Because when it comes to patents, why should the lawyers have all the fun?

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Posted in Intellectual Property, Marketing | 1 Comment »

Patents and Pivoting

Sunday, November 24th, 2013

A growing phenomenon in recent years is that of the lean start-up. A core question that every lean start-up has to answer is “Can we build a sustainable business around this set of products and services?” If the answer is “No”, then the start-up must pivot. It has to “make a structural course correction to test a new fundamental hypothesis about the product, strategy and engine of growth” (

One possible course correction is to enter a new space or market. Previously, we explained how patents can provide a low-cost method of entering a new market. Patents allow a company to cover use cases for its inventions outside of the intended use case without having to spend large amounts on prototyping and developing.  So, if the lean start-up has well-drafted patents that cover use cases in a new space, it will be able to secure a strong new competitive position by excluding others from using its inventions within this market. Clearly patents can be very useful in the process of pivoting.

Patents can assist with pivoting in another way. As Nobel Prize winning author John Steinbeck once said, “Ideas are like rabbits. You get a couple and learn how to handle them, and pretty soon you have a dozen.” While Steinbeck was talking about writing novels, the same could be said of drafting patents. The process usually starts out with a few ideas, but as the drafter and inventor work together to write the patent, pretty soon more ideas come to the fore. If these ideas include use cases for the invention outside the core space, the inventor now has some ideas available for the lean start-up to use to pivot by entering a new market.

So, not only can well-drafted patents assist in pivoting, but the process of drafting patents itself may yield new ideas that can assist in pivoting.  For a start-up in a hurry, that’s a pretty good return on investment!

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Value is in the Eye of the Beholder

Sunday, October 20th, 2013

Why should a small, cash-starved start-up bother getting patents?

It can cost $15,000 – $20,000 to get a patent.  Not to mention that patent litigation is an expensive game, so it’s unlikely that a start-up could even afford to defend itself should someone infringe its patent.  This is especially true if the infringer is a big company with deep pockets.

But before you dismiss the idea completely, think about another scenario involving a big company.

Let’s say a big company comes across a start-up and likes its technology enough to consider acquiring the smaller firm. The larger company will place a higher value on the technology, and hence the start-up company itself, if it is protected by patents. That’s because the acquiring company has the financial resources to prevent others from using the technology by pursuing litigation to defend these patents if necessary. Since the average price per patent within a brokerage transaction was as much as US$1.6M in 2012, according to IPOfferings, you can see how patents can contribute to the valuation of a start-up.

Certain types of investors, such as funding arms of large companies and healthcare investors, will place a strong emphasis on patents according to Leonid Kravets, a patent attorney specializing in developing IP strategy for young technology companies. In fact, PriceWaterhouseCoopers notes that small companies with strong patent portfolios are often very attractive acquisition targets because their patents can bolster the acquiring company’s defensive and offensive IP strategies.

So when a small start-up is agonizing over whether to patent a technology, it should recognize that this decision can influence the overall valuation of the company in the event of an acquisition. Although that patent may not seem to be the most attractive way to spend money now, remember that value is in the eye of the beholder!

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Posted in Intellectual Property, Mergers and Acquisitions, Start-Up | Comments Off

Hedging Your Bets With Patents

Saturday, September 21st, 2013

In a previous post, we explained how patents can be a low-cost way of addressing a market outside of a company’s typical core markets, without having to actually introduce a product. Patents can also be used by a company to “hedge its bets” within a market.  Here’s how:

Let’s assume that a company, call it Natram Inc., is developing a new product, and needs to solve a particular design problem. Possible solutions A, B and C are put forward. After much deliberation, the company chooses to go forward with solution A. Unfortunately, conditions change and solution A turns out not to be the best approach. Worse still, a competitor anticipating the pitfalls of solution A launches its own product using solution B.

Had Natram Inc. been thinking ahead, it could have retained its competitive advantage in this market by hedging its bets using patents. If it had patented each of solutions A, B and C, even though it only chose to implement the first approach, it could have excluded competitors from using any of its ideas in products or deployed the patents to extract licensing revenue from them. Furthermore, Natram would have retained the option to implement solution B or C later on if necessary.

Companies should remember that patenting innovations confers “monopoly rights” which can exclude competitors from taking the same route, thereby protecting competitive advantage in the marketplace. It also provides opportunities to earn revenue by selling licenses to patents that cover the best solutions. In effect, patents provide a way for a company to hedge its bets when deciding between different solutions to a particular design problem. Product development and new market entry is enough of a gamble.  It’s nice to know that the intelligent use of patents can help stack the odds in your favour!

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A New Understanding of IP Within A Competitive Environment

Saturday, February 25th, 2012

Until now, intellectual property (IP) has been viewed in the same light as other forms of property. Indeed, if we look at the websites of bodies such as the World Intellectual Property Organisation (WIPO), the following is offered as an answer to the question, “What is Intellectual Property?”:

“Intellectual property (IP) refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.“

Throughout history, intellectual property has been viewed simply as the assets realized through the process of creative innovation. However the time has come, to take a broader view of intellectual property. It is time for a new understanding of intellectual property within a competitive commercial environment.

The strategies and tools used to develop, build, maintain, and realize value from “creations of the mind” owned by a company must be included in this broader view. Examples are:

  • Invention disclosure programs
  • Licensing programs
  • Acquisition programs
  • The strategies and tools used to discover, and defend against, the threats posed by the “creations of the mind” owned by actors external to a company must also be included in this broader view. For example:

  • Competitor patent monitoring programs
  • Defensive litigation strategies
  • Therefore, within a commercial environment, IP encompasses:

    1. The assets realized through the process of creative innovation, i.e. the “creations of the mind” owned by a company.
    2. The strategies and tools used to develop, build, maintain, and realize value from the “creations of the mind” owned by a company, and
    3. The strategies and tools to discover, and defend against, the threats posed by the “creations of the mind” owned by actors external to a company.

    When IP is considered using this new and broader perspective, a company is able to both improve the return on its IP assets and better prepare for the challenges posed by its competitors.


    NB:  with this post, we welcome Ramesh Rajaduray, IP Strategist, to Stratford Managers

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