It is commonly known that patents help inventors and companies protect their innovative products, whether they are devices, manufacturing techniques, business methods, or software, from being copied. Patents allow owners to exclude others from making, selling, or importing to the US the patented product. If the patented products are infringed, owners may send cease and desist letters to the infringers, and if the infringers continue their infringing activities, the patent owners can go to court and enforce their rights through injunctions or seeking both compensatory and punitive or treble damages. Patents have plenty more uses besides these, including:
1. Patents can be used as collaterals to obtain loans. If you look into the assignment database of the US Patent and Trademark Office (USPTO), you will find that many patents are assigned to various banks. That is because patents are treated as tangible assets. They have their own values, and they can freely be transferred from one owner to another, just like any other tangible properties. Banks may use patents as collaterals on the loans they lend so that if a default occurs, they can seize the patents as a way to remedy the default.
2. Patents can be used to increase a company's net worth. A company's patent portfolio can be appraised, and its value can added to the company's total asset value. When the company is offered for sale, the value of its patents may help drive its sales price. The stock prices of public companies may also increase when they acquire patents either by pursuing their own innovations, licensing, or purchasing them.
3. Patents can be used to settle disputes or lawsuits. Small companies may think they do not need to obtain patents when they do not intend to be plaintiffs in infringement lawsuits. However, they do not know that patents can help get them off infringement disputes or litigation. This is especially common in industries where the major players own various patents. When two companies in the same industry fight in court over intellectual property infringement, the lawsuit oftentimes is resolved through cross-licensing. One cross-licensing scenario may involve Company A licensing a patented component from Company B, and Company B licensing a patented manufacturing technique for a different product from Company A.
4. Patents have defensive uses. By having these, competitors may be discouraged from obtaining rights to similar ideas, which consequently reduces the risk of competitors enforcing an infringement action against your company. Additionally, with patents, competitors may be deterred from developing, selling or making similar items.
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