How big is the market for what I have?
The seventh in a series of 10 blogs by Martin Brassell of Inngot, helping you find your own answers to 10 key questions about your intellectual property, or IP.
As has been pointed out in an earlier blog, formal IP protection can represent a substantial investment. One of the most important things to get right at an early stage is to create an IP strategy that is the right size for your business.
I wish I had a pound for every business plan I’ve seen which blithely states that a given market is worth £XX billion annually and growing at 5% per annum, so just a 2% share of it will build a big business. Of course, you want to enter a market that is large and going in the right direction – but what that also tells you is that it is likely to be massively competitive. Normally what these plans are short on is routes to market: how are you going to secure your first 0.005% foothold, exactly
Sad but true: many great ideas never make it to market because the inventor thinks of IP as being an end in itself. The logic generally goes: ‘everyone will want one, so if I protect it well, the market will beat a path to my door.
Therefore I need maximum protection, ASAP’.
However, one of the truly beneficial aspects of the patenting system is the fact that it takes time. After your patent is first filed, you have a whole year before you need to submit final details and drawings, and consider whether to start rolling it out internationally (if needed, you can withdraw and re-file the patent for up to 18 months, as long as there’s been no disclosure in the meantime). Initial filing fees are tiny, though you’ll still want professional
help with the application.
Wise innovators use this year not to beaver away on perfecting their innovation, but to get an accurate feel for the market size and obtain firm orders, based on the fact that their technology or process is ‘patent pending’. Where there is genuine demand, there will be income to cover the not inconsiderable future patenting costs. Also, the chances are these orders will still be honoured even if the patent application is ultimately unsuccessful. Either way – you’re in business.
It’s often preferable to prioritise protecting your home market initially. It’s the trading environment with which you will be most familiar, and you can use your UK application to extend your protection elsewhere as needed.
However, when you go international, it is dangerous to assume that you need to go global. The territories you need to protect are the ones where you realistically expect to make and sell your product (because you’ll have protection in those countries against people who make, import or sell infringing goods or services).
Even if you sell everywhere, you may not need to protect everywhere. Interestingly, many automotive and aerospace companies simply wait for an offending vehicle to enter a protected territory so they can pounce on
So patenting, along with other forms of registered IP protection, is best thought of as an investment that needs to generate a return. Speaking of which; while it’s true that investors rightly take notice of granted patents (because they prove there is a degree of novelty in an innovation), they take a lot more notice of sales (which suggest that it could be a commercial success).
Visit www.inngot.com for details of how to profile and value your IP and intangibles.