Patent Protection as Investment and Insurance
Lane Powell Shareholder Alan Minsk authored a May 6 Corporate Counsel magazine article titled “Patent Protection as Investment and Insurance.” In the article, Minsk discussed the value that intellectual property creation provides a company. He also discussed why businesses should look at IP creation as an investment and a type of insurance policy, instead of as a burden.
Every entrepreneur is faced with having to make difficult decisions regarding resource allocation. Some of these decisions are relatively simple, or at least seem so at the time. Typically, founders of a company want to minimize cash outflow during the early stages in order to conserve it for use later when it may be needed to support the company while it seeks additional funding. This makes sense, but efforts to reduce the outflow of cash can also leave a company without a key asset that it may benefit from at a later time.
This sometimes-overlooked asset is the value of the intellectual property created by the company’s employees. It is an asset that requires a certain amount of advance planning and investment in order to obtain, and may be perceived as an unnecessary and undesirable burden. However, it is also an asset that can provide a return on investment equal to many times its cost, both in terms of saving money and providing business opportunities that would not otherwise be available to the company.