What is an idea worth?
The concept of physical property rights has been an economic cornerstone of human civilisation for more than 1,000 years.
Societies and religions prohibit theft. If you’re reading this, chances are you were raised to understand the concept of personal property, and why you shouldn’t steal.
A more recent invention of human society is the notion of intellectual property (IP) and IP protection. IP is the property of your mind or exclusive knowledge.
IP rights give the IP owners – that is, the owner of the new product, service, process or idea – the time and opportunity needed to fully develop and commercialise what they have created; their innovation.
Why do we need IP protection?
IP protection is the most common route to determining what an idea is worth.
Innovation takes time, expertise, funding and creativity. IP protection gives the innovator that opportunity to develop and commercialise their innovations.
Trademarks, registered designs and copyrights are examples of IP protections covering branding, design, art, content and software. When it comes to new inventions however, the best protections are patents.
Patents grant inventors exclusive rights over their invention for a period of time, in exchange for a comprehensive disclosure of what they’ve invented.
In the United States, so-called utility patents – that is, a patent over a product, process or machine – typically lasts 20 years. This is in recognition of the enormous cost and time that can be involved in creating something new, giving the inventor opportunity to commercialise and profit from their invention.
How do I patent my idea?
By mid-2018, the U.S. Patent and Trademark Office had issued more than 10 million patents, out of approximately twice that number of applications.
The basic criteria for determining if an idea is patentable covers four areas: suitability, novelty, invention and utility.
Suitability – is the creation something that can be patented? In legalese, this is referred to as statuary, or subject matter eligibility. Processes and machines are examples of creations that can be patented; music, literature and compositions of data are examples of non-patentable creations.
Novelty – is the creation truly new? If it has been described or disclosed to the public, or is the subject of an earlier patent application, then it is not new. That said, a new combination of existing creations could be considered patentable if that combination does not exist on-record or has been applied anywhere else.
Invention – is the creation obvious? In addition to being new, a patent applicant also needs to prove that their creation isn’t obvious to someone who is familiar with the field in which the invention purports to improve.
Utility – is the creation useful? Of the four criteria, the usefulness requirement is potentially the easiest for an inventor to fulfil – but a patent applicant does need to demonstrate an understanding of how their invention will be applied.
If you’ve created something that meets these four criteria, the wait to secure a utility patent can be anything from one to five years in the United States.
Valuing an idea
With all this in mind, it’s initially up to the inventor to place a value on the idea they want to patent.
Is it worth the time, money and commitment required to patent my idea?
There’s also the consideration that the item the inventor is looking to commercialise may be the combination of more than one patent. Is that invention worth the effort?
It then becomes a question of who will value the creation if the inventor succeeds, and how that value can be quantified.
Consider an invention that is a medical device – intended to help the sustainable development of mankind. Value to intended users and society in general can be calculated in terms of lives improved, or even saved, against the status quo.
In that sense, IP protection enables inventors to secure the time and resources they need to convert concepts into creations that quantifiably improve people’s lives.
This in turn attracts future investment, and allows innovators to continue improving their inventions, and finding new ways to solve problems affecting mankind.
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