Advantages and Disadvantages of Patent
Consider inventing a product whose legal rights are owned by you only. Nobody can decide how to use it or leverage using your invention in any form. Getting a patent is undoubtedly beneficial for various good reasons. But there are some limitations of getting a patent as well. The Advantages and Disadvantages of Patent answer the supportive as well as contradictory questions.
What is a Patent?
A patent is an exclusive right granted to inventors when they invent or develop a product. Getting a patent means the inventor has sole rights to produce and sell the ideas for a certain period (up to 20 years). The inventor is protected from other persons or companies selling or producing their product during this period.
The inventor has exclusive rights to produce it and has the right to license the idea to other companies to allow them to produce that particular product under a licensing agreement.
A patent holder has the right to control how the product is made, used, or sold in exchange for disclosing the details of their product to the public or investor companies.
What are the Advantages of a Patent?
There are many advantages of patent for both the inventor and investors. Once the inventor makes the necessary details of their invention available to the government and public, they can attract many investors and start selling and manufacturing the product. The following are some obvious advantages of getting a patent.
1. Product becomes intellectual property
Once a product or application is patented, the same becomes the inventor’s intellectual property. Thus, that person becomes the exclusive owner and decides how to use it or control its production to launch in the market.
2. Financial Benefits to the inventor
Getting a patent for the invention, it’s easier for inventors or startup to seek capital for the idea. They may disclose the technical details of their invention to potential investors and licensees. A patent holder is free to charge a premium for an invention because of the restricted competition.
Licensing is the best way to prevent others from stealing the idea. If the concerning government authorities grant a patent, the person filing a patent is considered the patent owner.
3. Advantages of Patent for Investors
When the ideas resonate with the market demand and unique to drive investors due to future benefits, the investors can expect a great deal of profits in business terms. For example, software developed to measure the thickness of glasses is one of the brightest inventions that every big company would be keen to invest in.
4. Restricted Competition
Limited competition is one of the known advantages of patent. A patent holder can alleviate the competition by recreating their product or service and selling it at a higher profit margin. It can limit the competition’s ability to produce the product or service and allow the patent holder to demand that they stop production if they are producing the item as well and have never patented it.
5. Best for Small Businesses and Startups
Providing increased credibility to an inventor and their company, a patented product can be valuable for small businesses and startups. For the businesses looking for investors willing to invest, all they need is to file a patent. Licensing a product or service can help businesses of all sizes and gives them an edge to expand their market share.
What are the Disadvantages of Patent?
When it’s about getting a patent for product, it comes down to the possible limitations. Here are some of the major Disadvantages of Patent you need to consider besides the benefits.
1. Not suitable for every business
Patents are vital for some already established and reputed businesses to generate higher profits by obtaining exclusive legal rights to their products, designs, and ideals.
However, for small businesses and sole proprietorships, the expenses incurred and complicated filing process to obtain a patent can cost seriously higher than the product’s worth. This could be one of the common disadvantages of patent for investors, which needs prior consideration.
2. Keeping Secrecy is one of the major Disadvantages of Patent
Details of the invention are usually publicly disclosed by the inventor while applying for a patent. To file for a patent application, the inventor must make public the technical details about the invention.
Due to the rise in competition, some inventors choose not to disclose such details of the product to the public, keeping them a trade secret. This could be disadvantageous for inventors; the investors and approving authority may not be able to contemplate the idea.
3. Lengthy Application Process
The usual tenure to get approved for Patent is 3 to 4 years. Thus, the application process can be both lengthy and time-consuming for many, which can frustrate the inventor. The biggest problem is some others may come up with the same idea to raise the competition. There is also the risk that the market could change significantly over time hence outdating the technology.
4. Unbearable Costs
Not everyone can afford to apply for a Patent as not only it’s time-taking, but also an expensive process. The inventor has to consider several expenses such as patent fees, attorney fees, and the cost of the legal paperwork.
Even after getting a patent, there can be huge costs associated with its maintenance. For example, after getting a patent granted, the inventor must extend it three times throughout its life. If the inventor or startup fails to pay maintenance costs, they may lose protection rights under the Patent.
5. Patents don’t last forever
Patent Expiration is one of the leading disadvantages of patent as it typically lasts for up to 20 years. Though the inventor can apply for its reissuance, the costs of reapplying would add up. Also, a company will require to go to market quickly to be able to leverage the protected period before the patent expires and competitors begin to take over the market.
Conclusion for Advantages and Disadvantages of Patent
Getting a patent is a smart move to dominate the market with less competition. Inventors and companies can turn their ideas into profit-generating actions by hitting the button at the right time. However, there can also be some disadvantages of the patent in terms of cost and time. With these given Advantages and Disadvantages of Patent, inventors can find the foreseeable risk and outcome.