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How does intellectual property affect the value of my business?

What to consider when deciding to patent or not to patent?

To Patent or Not to Patent

Posted by Jeff Muir on 31 August 2015 | Comments

To many investors the existence of patented products or technology is a key question in their evaluation of an opportunity.  In some cases, a patent can be an important part of the transaction and a significant barrier to entry.  However, the cost of obtaining a patent and the resources needed to defend it against infringement must be considered before deciding whether to seek a patent.

The first question to ask is; does the company have anything that could be patented? For most companies the answer is no.

 If there is intellectual property in the company that could be patented, the company should find a law firm that specializes in patents to evaluate the following:

  • Probability of success in obtaining the patent,
  • The cost and time involved to obtain the patent,
  • The ease of a work around (is the patent really a protection)
  • Does the company have the resources to enforce the patent if infringed?

 Some companies have patents in place so the decision in the years leading up to sale is whether or not to renew the patent.  Again advice should be sought from attorneys who specialize in patent law to evaluate the right course of action.

 While buyers tend to like businesses with patents, a patent itself may not necessarily add value to a business.  We suggest a business owner evaluate the steps above to determine if they should seek to patent the company’s intellectual property.


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