Patents – protectors of brand value

Wrapping up your business and brand value into a legal entity, which can be protected and resold is critical to building shareholder value. This is the strategy of the world’s leading brands, who increasingly believe  patents and trademarks are  to be developed, licensed or sold. In doing so, the  value created from the  research and development of  a growth strategy can be retained.

Patents are every where, a single smart phone may have 250,000 patents in its design, while packaged goods companies look more like tech companies these days. Unilever has 20,000 patents worldwide and file between 250 and 300 new patent applications per year, spending 928 million Euro on research and development in 2011.

And while we may all be familiar with the extensive use of patents in asset protection, these days patents are being used as a weapon of offense and defence…just take a look at Mircosoft’s recent purchase of AOL.

AOL just announced a $1.06 billion patent accord with Microsoft. The move which sold patents at an individual value of $1 million, will go into a stock pile to be used in a defensive position against law suits. Microsoft is not alone, Apple and Google also have acquired patent troves to fend off litigation.

These patents are not just for defense but also to “go after” other players in a sector that is becoming increasingly litigious.  Ultimately analysts see  Microsoft’s acquisition of AOL patents, as a play to  extract money from manufacturers of Andriod and Google  down the line.  Tim Armstrong, AOL’s CEO, expects Microsoft to generate $100 million over the life of the patents.

Some people believe that this is all to control, rather than to innovate, and it is escalating. A new class of patent predator has evolved in recent times, known as the patent trolls, who are not actually manufacturers or innovators, just patent holders and litigators and they are earning more money in legal damages from law suits than the product makers.

Louise Kelly

Managing Director

Hearts and Minds

http://www.heartsandminds.com.au

Founder Thought Leaders Circle

http://www.thoughtleaderscircle.com

 

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