Organizations do not always patent an innovation in order to immediately commercialize it. Companies, particularly large ones, may seek patents on inventions that are related or complementary to their core offerings in order to prevent competitors from incorporating the technology into their products. This strategy is known as defensive patenting, and it can be used in a variety of circumstances.
1. Extremely Innovative industries
Competitors in highly innovative industries are continuously inventing new technologies that are significantly similar to one another. In this case, an organization may choose to patent an invention even if it does not see an immediate use for it in its offerings. This enables the organization to defend its innovative technology against competitors. If the organization fails to protect the innovation, a competitor may develop and patent the technology, limiting the ability of the first company to use the new product or process.
This defensive patenting strategy enables organizations to expand their footprint within the technology landscape to incorporate patents for inventions adjacent to revenue-generating innovations. This allows the holder of the intellectual property rights to both design products without limitations and push competitors to design around existing patents, potentially trying to weaken their ability to provide a high-quality alternative.
2. Meeting Customer Needs
A company must be able to meet the changing needs of its customers. This is made more difficult by designing around competitors’ patents. A defensive patenting approach may include incremental technology protection. This allows the company to serve its customers without fear of infringing on neighboring patents.
3. Increased Litigation Probability
Companies in highly competitive and profitable industries may resort to litigation in order to safeguard and profit from their IP. When the likelihood of an infringement case is high, a defensive patent can protect a company. If a competitor sues a company for patent infringement, a defendant with a big patent portfolio will almost certainly have intellectual property that enables it to countersue for infringement of an otherwise infrequently used patent. Both parties may have potential infringement cases in this case. They may, however, be able to reach a licensing agreement for little or no cost.
Alternatively, if a company is known to have a large IP portfolio, it may be able to avoid infringement claims entirely because potential plaintiffs are unlikely to risk “awakening a sleeping giant.”
4. Revenue Potential in the Future
The work of an R&D team may not immediately fit into the product portfolio of its organization. However, the technology could be useful in the future. Patenting the innovation defensively allows the company to use it strategically. For instance, by introducing it to the market, licensing it, or emphasizing it during mergers and acquisitions.