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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Andrew Tellijohn
June 2004

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Patents

business builder patents  

Patents can add
power to many
firms’ toolbox

by Scott Ulbrich  

Is your business “toolbox” overflowing with crucial instruments for success, including a strategic plan, the latest technology, a list of prospects? Like many companies, you may be missing one important power tool, which could be the key to protecting and building market share. That power tool is the patent.

Patents grant their owner the right to exclude competitors from offering a certain feature of a product or from using a certain method of production or doing business. When understood and thoughtfully developed, this right can result in increased market share power.

While the effect of patents on your particular market can vary, as with any tool, a business owner must learn how to use patents to the company’s advantage and then work them into the ongoing process of building market share and success.

There are several factors to weigh when analyzing whether or not to pursue an aggressive patent strategy.

First, consider your own unique features, methods and services, to determine whether you have something worth protecting. Do you have a product or service that has a unique feature that you wish to exclude from your competitor’s products or services? Alternatively, do you have a process or way of doing business that gives you a competitive advantage over others?

Even if you do not currently have a novel or unique product or service, one may be in development within your organization. Remember, patents aren’t just for the here and now — they’re best used to carve out future market share.

What’s the life span?
Then, look at product life span and profitability margins. Longer life cycles provide a competitor more opportunity and incentive to copy your novel features or methods. Failure to take advantage of the protection provided during the 20-year life span of a patent may cost you significant revenue due to copycats.

Very short life cycles, however, especially for products and processes that are difficult to reverse engineer, may indicate less need to aggressively pursue patents because by the time the patent issues the next generation of the product is out and a lawsuit is moot.

Profit margins have a similar effect on the need for patenting. Large profit margins will tend to attract more entrants into the market, resulting in more litigious competitors because the incentive to protect these margins is greater. Conversely, slim profit margins will not tend to attract new entrants into the market.

However, slim profit margins may create their own form of incentive for pursuing and protecting patents, such as suing to remove another competitor from the market entirely.

Consider the competition
One of the most important patenting considerations is to determine the level at which your competitors are pursuing patents. A competitor that aggressively pursues patent coverage for current and future technologies can assist you in gauging your own patent strategies.

Your business must compete and one way to do that is to prevent your competitors from “mining” the entire technological landscape with their patents. Unwillingness to pursue patent protection for relevant technologies may significantly limit your ability to grow or even sustain market share over the long term, possibly even allowing your competitors to exclude you from the market.

Learn the competition’s suing habits. If a competitor has a track record of frequently suing for patent infringement then it’s likely there is a greater need for you to pursue protection.

There are several reasons why a company might consider pursuing more patents. First, if you ever get sued for patent infringement or are threatened with a patent lawsuit, a meaningful patent portfolio may provide your business with the ability to counter sue. The counter suit provides tremendous incentive for both sides to settle before engaging in protracted litigation. Also, the fact that a competitor knows it may be counter sued could prevent it from suing altogether.

Secondly, your patents are valuable bargaining chips. Sometimes a competitor may hold a key patent in your industry. The competitor may want a substantial royalty payment for licensing use of their patent to another company. However, if you have valuable patents of your own, a cross license agreement could be worked out to the advantage of both parties.

Finally, even if a lawsuit is initiated, a license to the patents you hold may prove more desirable to the plaintiff than your money. The bottom line is that a patent may provide you with bargaining leverage and ammunition in a competitive arena.

Watch patent deadlines
Time is of the essence when deciding whether or not to patent. You must file a patent application in the United States within one year of the first date you publicly disclose, sell or offer to sell your invention. Most foreign countries do not even offer this one-year grace period.

Business owners are often surprised to learn that showing a prototype at a trade show may bar a patent if it is not filed for within one year of the trade show. Therefore, the “to patent or not to patent” question must be answered at a relatively early point in a product’s life cycle.

Patents provide the best potential value when applied for even further out in the process, two years ahead of product release if possible. That is because once you have filed your application, it typically takes another 18 to 24 months until it issues as an enforceable patent. While there are some provisions to expedite this process, it’s best to employ long-term thinking in your patent strategy.

Finally, plan your future patenting needs.

A successful company understands both its current market demands and the projected market demands. Patenting future products and features tends to increase your potential for capturing the broadest possible market protection because you can carve out market share before others attempt to patent alternatives to your idea.

Filing a “pioneer” patent application best enables your patent attorney to pursue broad claim coverage that makes it harder for your competitors to design around. This forces your competitors to approach you for a license to a key patent, which of course means more revenue for your business.

The patent is indeed a power tool, one that should be part of every business plan. If you’ve never considered pursuing patent protection, take your company through the process and determine if what you’re doing is unique enough to protect.

Most likely you’ll find an area where patents can serve you well, but if not, the process sets you up for recognizing patent potential later on.

[contact] Scott Ulbrich is a registered patent attorney with Patterson, Thuente, Skaar & Christensen in Minneapolis, where he counsels businesses in the development of patent strategies, procurement of patent protection and litigation of patent rights: 612.349.5776; ulbrich@ptslaw.com; www.ptslaw.com