"Why do I even need a patent at all? Why are patents important?" Unfortunately, these words have been uttered by more than one person who had a brilliant idea—that made someone else a millionaire. The ultimate purpose of the patent is to ensure your exclusive use of your invention, so you can make, sell, license, or use it as you like. But it's not just good for inventors. IP protection drives industry innovation by giving people a reason to create and progress. 5 Reasons Why Patents Are Important There are some misconceptions about patents that make burgeoning inventors avoid them. Yes, they are time-consuming and complex, but their benefits far outweigh their investment. Here are the top five reasons why patents are important to protect your invention. #1: Patents protect you Patents protect you by allowing you to claim ownership of an idea. But consider a scenario where you choose not to get a patent. You create a product and move right to manufacturing. A few years down the road, you receive a complaint from another company. They filed a patent on an invention very similar to yours. Now, they own it, and you're infringing on their use. If you have a profitable idea, you need to protect it. A good litmus test is if your invention can be reverse engineered, you need a patent. The patenting process ensures you're completing the due diligence, so you don't have to worry about infringing on someone else's IP. With that, you can move to production or whatever else you decide to do. There's more than one way to make money on a patent. #2: Patents have multiple profit streams Most people who create an invention think of starting a business first. However, that's not the only way to make money from a patent. There are three options: With both licensing and selling your patent, you remove the brunt of the work as you reap the rewards from your invention. For many people, this is the best option. Others envision a business around their idea. For them, the patent provides another benefit. #3: Patents are assets Because patent ownership is transferable, it's an asset. That significantly increases a business's value or an individual's net worth. Patents can be used as collateral for a loan or to guarantee your stability as you grow your business. It's also critical if you want investors. A patented idea drives interest from those who want to fund your growth. They know your IP is protected, so their investment is more secure. That gives you an edge over others seeking funding who haven't patented their work. #4: Patents are a competitive advantage Patents give inventors time to gain success before others copy their inventions. That exclusivity is critical for competing against larger companies with massive resources and marketing departments. You have the time to build your business and make a name for yourself. #5: Patents spur innovation The entire purpose of patents is to spur innovation through incentivization. It's stated in the Constitution: "To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." Patents and other IP protection methods are in place because they incentivize creation. Individuals who build something know they won't just have their idea taken by someone with more resources. It's theirs for a set period. While patents do have a lot of benefits, they're not perfect in every case. Some concepts can't be patented, period. Others may be better handled as trade secrets. What About Trade Secrets? If you search for the patent on Coca-Cola's formula, you won't find it. Sure, the brand owns other patents, like on the design of its bottle. But the company's titular drink itself is not patented. It's protected instead as a trade secret. Coca-Cola chose this method because of its one main benefit. A trade secret never expires. Theoretically, it could last in perpetuity. You only have to do one thing to maintain it—keep it confidential. Once a trade secret becomes public knowledge, it's no longer a trade secret, and you lose the competitive edge. In Coca-Cola's case, the particular recipe was difficult to guess and was more lucrative as a long-term prospect. Instead of patenting it, which would have made the recipe public and only protected it for 20 years, Coca-Cola instead chose to treat it as a trade secret. This means taking reasonable precautions to prevent its disclosure. That includes limiting who has access to the information, restricting sharing through nondisclosure and confidentiality agreements, and implementing access controls. If your product cannot be reverse engineered, and if it would be difficult to recreate through legitimate and ethical means, a trade secret may be the best option for you. If someone could take it apart to figure out how it works, then patenting is the best choice. There are many reasons why patents are important, even though some inventors shy away from them. Obtaining one is intimidating but well worth it in the end. People tend to see the highest return on their investment when they work with an attorney experienced in the field. Bold Patents can help you navigate patents, trade secrets, and other types of IP protection for your growing venture. To learn more, call 800-849-1913 or connect with us online.