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Patents In The US – Why Inventors Have Difficulty Protecting Intellectual Property?

Key takeaways:

  • Inventions are valuable property; once they are stolen, inventors’ challenges can be financially crippling to litigate.
  • However, the US Patent and Trademark Office (USPTO) is often overwhelmed with patent applications.
  • Applying for and defending a patent has become prohibitively expensive.
  • The rules governing what can and can’t be patented have become increasingly complex.
  • Patent infringement cases can take years to resolve and cost millions of dollars in legal fees.

It’s no secret that the US patent system needs reform. In recent years, the number of challenges inventors face has increased. In contrast, the success rate of securing a patent has decreased. It has led many to believe that the intellectual property system fails to protect those who create new products and ideas.

Several factors have contributed to this situation. First, the US Patent and Trademark Office (USPTO) is overwhelmed with applications. In 2015, there were over 600,000 applications filed, but only about 275,000 patents were granted. This backlog means it takes longer for an inventor to secure a patent when their idea may be copied or stolen.

Second, applying for and defending a patent has become prohibitively expensive. It’s because this includes not only the filing fees but also the costs of hiring lawyers and experts to navigate the complex process.

Third, the rules governing what can and can’t be patented have become increasingly complex. In particular, the Supreme Court’s decision in Alice Corp. v. CLS Bank International has made obtaining patents for software-based inventions more difficult. As a result, many inventors choose not to pursue patents.

Fourth, even if an inventor does secure a patent, enforcing it can be difficult and expensive. Patent infringement cases can take years to resolve and cost millions of dollars in legal fees.

Finally, a patent application can take months or even years to process due to backlog issues. This delay can be frustrating for inventors who are eager to get their products to market.

However, despite the challenges inventors face, they are still required to pursue patents. The patent system remains essential for protecting intellectual property and promoting innovation.

Let’s discuss some of the most significant risks and challenges investors face, which can jeopardize their intellectual property rights even before the product’s development.

Failure To Discuss Ownership Clauses in Contacts

In various industries, projects cannot be completed without the assistance of several secondary entities. These can include subcontractors, supplies, and other vendors. The company’s role in a contract can vary, which is why the agreement should be reviewed several times beforehand.

The same doesn’t apply to any external parties. Industrial designers and engineers hold golden ideas, but when they are an employee of a brand, they may not receive any royalties on the invention. It’s because of the intellectual property waivers that are signed during the onboarding process with the company.

Intellectual property waivers generally state that the employee realizes that any idea they develop during their time in the company with the company’s resources and teams belongs to the company.

Ownership clauses are one of the most significant challenges inventors face when companies hire them as subcontractors. Moreover, the company can state that it will retain ownership of the final product and data rights.

On the other hand, sometimes, companies may be in a rush to order a part of the service or hire an entity without bothering to include any clauses. In this case, there can be intellectual property disagreements and lawsuits down the line.

So, whether you are a client or a customer, it’s essential to consider your options when entering into a partnership with another business entity, especially if there’s intellectual property or money at stake.

Trolls In the Intellectual Property System

Engineering companies may take preventive measures to cover most bases. Still, the most challenging area of patent protection is navigating through the prosecution by patent trolls.

These entities purchase patents to use them in litigation against the inventor to gain settlement rewards. Patent trolls are some of the most uncertain challenges inventors face as tech companies have faced lawsuits and have paid high costs in the past.

Lack Of Knowledge of What’s Already in The Market

Suppose your invention is almost forthcoming after many late nights, quality plans, software tests, and documentation. Indeed, you’re excited about your product launch and consider your invention a one-of-a-kind product. However, the patent office doesn’t believe it’s different enough and claims that your idea has already been executed before.

Every detail matters, and when engineering companies aren’t ready, the costs can be high and, at times, devastating. There will be challenges inventors face with the company selling the same product. However, if they have patent protection, you can be sued for infringement of their product. You’ll be forced to pay the competing company for profiting from their “legally protected” invention.

It’s a lose-lose situation and one that many inventors find themselves in after the trouble of patenting their inventions. The United States Patent and Trademark Office (USPTO) is notoriously difficult to work with in the first place. Besides that, getting a patent approved can be a long, complicated, and expensive process.

The Returns Vs. The Expenses

According to a study by the US Government Accountability Office (GAO), the average cost of patenting an invention is $20,000. And that’s just the average – some inventors have spent upwards of $100,000 on attorney fees and other expenses related to securing a patent. The costs alone of registering intellectual property can discourage many people from attempting.

And once an inventor does manage to get a patent approved, they often find that it doesn’t offer much protection. A study by Boston University found that, on average, patent holders only receive $1.50 for every $1,000 spent on their patent. In other words, they recoup less than 2% of their investment.

How Can the Intellectual Property System Be Improved?

There are myriad ways in which the intellectual property system could be improved to better support inventors.

One way would be to make obtaining a patent easier and less expensive. The current system is complex and time-consuming, which can deter many people from even attempting to protect their ideas.

Another way to support inventors would be to strengthen enforcement mechanisms. It can be difficult for patent holders to enforce their rights, particularly against larger companies. This means that many infringements go unpunished, which can discourage people from seeking patent protection in the first place.

Finally, there could be greater public awareness of the importance of intellectual property and its potential value. Inventors often don’t realize how valuable their ideas may be, and so they don’t seek protection for them. If more people were aware of the potential value of their ideas, they might be more likely to take steps to protect them.

Want to learn how social learning can benefit you before launching a new product? Here’s an article that’ll help you.

For startups, companies, and new inventors that don’t have a corporate representation, protecting patents is a challenging area to navigate in the intellectual property system. However, inventions are valuable property, and once they are stolen, the challenges inventors face can be financially crippling to litigate.

Thus, doing your research and homework holds the utmost importance. Avoid taking shortcuts regarding your patent protection, as it will cost you.

New Product Consulting provides affordable services to business startups, small businesses, and inventors in Boulder, CO, who need help with ideas for their new products or services. Get in touch today to learn more.