Recently, there’s been a lot of writing on the learning blogs about the uses of patents (Jay Cross, Tim O’Reilly, and most notably Michael Feldstein). A lot (though not all) of emphasis has been placed on the negatives of patents. I just want to start a discussion about some of the positives.

While patents can certainly be misused and the patent system is broke in quite a few ways, there are a lot of good reasons to have and to obtain patents. While it’s important to talk about the misuse, it’s also important to talk about good uses for patents.

Here are the 4 primary reasons for obtaining a patent:

1. Protection – a defensive strategy to protect a company from lawsuits. The easiest way to demonstrate that you had the idea first when you get sued is to show a patent award. It’s not full proof, but it’s a good start.

2. Valuation – patents have value in the public markets and stock exchanges. They can increase the value of a company. If a company’s strategy is to be sold, issue stock, or even acquire debt, patents can increase the likelihood of getting a higher price or a more favorable rate since they are assets to the company.

3. Marketing – patents are one indicator of innovation. If a company wants to be perceived by their customers and potential customers as innovative, the number and scope of patents can be used to influence that view. Several public companies have used this approach in marketing materials that say something like “With over X patents, the most in the industry, we lead the way in doing Y. Clearly that makes us a leader and you want to work with a leader.”

4. Revenue – an offensive strategy used to obtain revenue sources from competitors through licenses or legal judgements. Often this is used to put a competitor at a disadvantage by increasing their direct costs (cost of operations) and indirect costs (legal fees).

The last one of these is the center of the controversy. It seems that the founding fathers clearly intended #1 (Protection) and that #2 (Valuation) and #3 (Marketing) are direct outcomes of a free market relating to the scarcity created by a patent. Should it extend to a source of revenue? This is where we should focus our debate rather than the virtues (or lack of virtues) in the patent system.

When I’m looking for potential vendors/partners, I look at what they are doing with new innovations, operational efficiency, sales and marketing, and business strategy. If I see a company that has to rely on patents as a way to tip the scales in their favor, it’s probably not the company for me. Some companies (commonly referred to as patent trolls) rely solely on lawsuits for their revenue and never produce a product. This approach fundamentally locks up innovation and doesn’t provide the benefits the founding fathers intended with the patent process.

For more information, search Micheal Fieldsman’s blog for “patent”. He presents a great list of how you can and should get involved, some of the positives, and some of the things that will likely directly impact your work if you’re in the learning field.