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The Reality of Protecting Your Company's Secrets

Patents: they're the building blocks of innovation. But there are a lot of things a patent can't do. Here's a primer on how (and why) they actually work.

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When we think about patents, most of us conjure up the ghost of Thomas Edison (who had nearly 1,100 of them) or perhaps Benjamin Franklin, who, despite being an avid inventor, held zero. We create in our minds the image of inventors working by lamplight, sketching, figuring, building, and then selling their inventions. 

In actuality, that image is quite far from the truth. A patent does not in fact give the inventor a right to make something, or use a new process he or she invented. What a patent gives the inventor is the right to prevent others from making, using, selling, or distributing the patented invention without the patent holder's permission. The U.S. Patent Act has been around since 1790, and typically allows 20 years of this protection to inventors.

So, why are patents important?

First, and probably most importantly, patents promote innovation. Even though patents are a legal concept, the patent process has its roots in public policy, and in the Constitution. Consider the big picture--as a nation, the United States wants to promote innovation. We want brilliant citizens to spend their time and money coming up with concepts and ideas that they turn into inventions.

The benefit of this activity to society is immeasurable. Think about what our lives would be like if someone hadn't invented the light bulb (its not who you think!), or if Watt hadn't improved rudimentary steam power into the modern steam engine. When inventors innovate, we all benefit. 

Now think about it from the point of the inventor. You come up with a great idea, but that’s all it is: an idea. You now need to turn that idea into an invention. To do this, you typically have to invest your valuable time and money to see your idea become reality. Why would you do that unless you were able to benefit from your work and see some return on your investment? While the mother of all invention may be necessity, traditionally the driver of invention is financial gain. So we have established that patent protection is good for society since it gives inventors the right to stop others from profiting off their hard work.

But why do we need the government to accomplish this for us? The short answer is that governmental protection in this instance is simply superior to other alternatives. It would be extremely difficult to create a private system of agreements and contracts that would offer the protection an inventor can receive from a single patent. 

Additionally, patents are property--intellectual property--which means that patent protection can be sold or licensed. This provides yet another avenue for an inventor to realize a return on his or her investment. When a patent is sold, the right to enforce that patent is typically transferred as well, giving the buyer the same rights they would have if they were the original inventor. This allows those with great inventing skills, but maybe less-than-great business skills, to still see a profit from their hard work.

But patent protection doesn't come cheap--and can take a lot of time. Obtaining a patent in the United States can take 36 months or longer, depending on a host of factors. Furthermore, while a very simple patent can cost around $5,000; complex patents can cost up to hundreds of thousands of dollars. 

However, even after investing all of the time, money, energy, and hard work, not every idea will find its way to becoming a patented invention. But for those that do, the patent system is a valuable tool that exists to ensure that inventors are able to adequately protect their creations. Without a doubt, patent protection is vital to the success of the individual inventor and a benefit to society. The framers of the Constitution recognized this hundreds of years ago, and it remains just as true today.

Last updated: Jul 6, 2012

CHAS RAMPENTHAL is general counsel and vice president of product development at LegalZoom. He's also a former talk radio host (KTLK AM 1150 at Clear Channel) and an entrepreneur himself, as the founder of LegalEndeavor.
@LegalZoom




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