What Is the Good & the Bad of Patents?

The patent system provides protection to inventors so that they can have an opportunity to control the market for their products. At its best, the patent system encourages innovation by ensuring that the people who invent new technologies get an opportunity to profit from their hard work and creativity. When it doesn't work the way it was intended, though, it can stifle innovation.

When you patent an invention, idea or even a cosmetic improvement, you get the exclusive right to profit from the patent during its 14- or 20-year life. You can make your invention and sell licenses to others to use your patent and collect royalties, or you can sell the patent outright. If you want, you can even sit on your patent and hold it off of the market until you feel that the time is right, although the clock will keep running. After the patent expires, the intellectual property goes into the public domain so that everyone can benefit from it at a lower cost once you've gotten compensated.

Anyone can get a patent. Whether you're one of the biggest companies in the world or you're an inventor in your garage, a patent means the same thing and conveys the same protection. That being said, to some extent, a patent is even more valuable to a smaller company or an individual thanks to the credibility and prestige that it carries.

It's one thing to say that a product is new or improved, but saying that it is patented can distinguish it as something that is truly different. A patent can also be a tool to attract venture capital or further investment in your business. It can even serve as a personal calling card for an engineer or designer, pointing out her skills and unique capabilities.

Signing up for a patent can be very expensive. The fees charged by the United States Patent Office run into thousands of dollars, while the cost of hiring patent attorneys to help with your application can be even more. Furthermore, once you have a patent, you will have to defend it, which can mean additional legal costs if you think someone is infringing. While some small inventors can take advantage of the reduced registration fees written into the 2011 America Invents Act, not everyone will qualify.

Though patents are supposed to be applied to truly unique inventions, frequently they end up overlapping. When this happens, innovators can end up suing each other for infringing on each other's patents. In fact, some companies have been set up for no purpose other than to purchase patents and use them to sue other companies for, in many cases, innocently and unintentionally infringing them. This can end up not only increasing the cost of innovation but also dissuading innovators from taking the risk of being sued for an invention.