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<\/figure><\/div>\n\n\nWhat do bees have to do with patents? <\/strong><\/em><\/p>\n\n\n\n Like bees, the value of patents is often hidden from view. This is of course, not always the case — patents can be directly monetized through licensing agreements and\/or litigation and it is not uncommon for patent verdicts to award damages in the tens or hundreds of millions of dollars. However, the majority of patents have value that is much less easily quantified. Neverthless, these critical IP assets can still provide significant return-on-investment (ROI) and should not be discounted. <\/p>\n\n\n\n Here are just a few examples of the hidden value of patents:<\/p>\n\n\n\n 1)<\/strong> Deterrence Against Infringement: <\/strong>Patents, or even published patent applications, can create a significant deterrent against a potential competitor entering your technology space. Potential competitors may avoid competing entirely, or may at least incur significant time and resources determining how to avoid infringement. Thus, a patent may quite often achieve its intended effect without the patent owner necessarily knowing it. This deterrent effect may nevertheless be highly impactful on the patent owner\u2019s ability to successfully commercialize the patented technology. <\/p>\n\n\n\n 2)<\/strong> Deterrence Against Litigation: <\/strong>Holding one or more patents relevant to a competitor\u2019s technology can be a significant defensive asset because of its deterrent effect on a competitor\u2019s propensity to assert its patents or bring other competitive lawsuits. In competitive markets, an entity holding no patents is a soft target and at a significant disadvantage against a patent-holding competitor that can leverage its patents to put competition on the defensive. To the contrary, a competitor facing risk of an patent countersuit is much less likely to take an aggressive stance. The impact of patent holdings on a competitor\u2019s internal decision not to pursue litigation is usually not directly knowable or quantifiable, but can nevertheless have significant impact on a company\u2019s future. <\/p>\n\n\n\n 3) Marketing:<\/strong> Patents can be great marketing assets, both for direct customers and for potential acquirers and\/or investors. They are evidence of innovativeness, industry leadership, and sophistication. The effects are difficult to directly quantify, but nevertheless significant.<\/p>\n\n\n\n 4)<\/strong> Investment and Acquisition:<\/strong> Patents, or lack thereof, can have significant impact on decision making of a potential investor or acquirer. A specific value of patent assets is usually not expressly determined in these transactions, but nevertheless may be a major contributor to a holistic valuation of the target company. Moreover, a company lacking sufficient patent protection may be deemed too risky of an investment and may never even reach a valuation stage of diligence. <\/p>\n\n\n\nA solid patent strategy can and should provide significant ROI even though the specific value of individual patents can be hard to know or quantify. <\/em><\/h4>\n\n\n
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