Completing the innovation process

The fundamental building blocks of a knowledge society rest on the ability to exploit innovative thoughts.
Read time 4min 50sec

Many critics say patenting is too expensive and patents are another form of colonisation. Argue as much as we want, the fundamental building blocks of a knowledge society rest on the ability to exploit innovative thoughts.

Have you ever seen some basic solution to an everyday problem and thought: "But I`ve thought of that before!" Well, everyone does come up with bright ideas, but few people actually implement those ideas and turn them into money-spinners. This is the basis of commercialisation: without completing the innovation process, new ideas are as useful as finding a blank cheque on an island with no bank.

With the current discussions on public-funded intellectual property (IP) and the broader realisation of the need to commercialise new ideas, there appears to be a tremendous drive to encourage patenting.

Patenting can be expensive. One needs to consider not only the cost of drafting a proper patent specification and the associated filing costs, but also the cost of potentially defending the patent.

Many inventors approach the cost of a patent as the only barrier to entry, ie, once they can afford the estimated cost for the patent, they eagerly proceed with the rest of the innovation process.

The benefit

Why should one register a patent in the first place? A patent is a monopoly granted by the state, for a limited period of time, to the inventor of the patent, in return for full disclosure of the underlying principles of the invention. The benefit to the inventor is the operating right to use his/her invention, relying on the state to keep competitors at bay. The benefit to the state and society is the disclosure of new thinking, stimulating further innovation.

A registered patent is by no means a guarantee of the commercial success of the invention and is simply a step in the larger process.

Stephan Lamprecht, GM of Technology Top 100, a brand of Da Vinci.

Patenting is the preferred mechanism for packaging technology to exploit, for example, through licensing. Additional strategic uses of patents expand their use beyond mere protection.

A registered patent is by no means a guarantee of the commercial success of the invention and is simply a step in the larger process. Most patents filed in the local and international patent offices never see the light of day. Patenting is often one of the earliest stages in the process of commercialisation and follows the idea generation phase.

Coming back to the fact that many inventors approach the patent cost as the main budget item in the innovation process, and considering the aforementioned reality that the inventor will have to incur several other expenses before the invention can go to market, it is clear why so many inventors fail and why innovations regularly don`t proceed beyond the laboratory or garage.

Experienced patent departments report the typical patent cost is a tenth of the overall commercialisation cost. Payment for activities such as market research, product registration and marking, packaging design, manufacturing development and implementing the required supply chain, account for the rest of the commercialisation costs. Whether it is 5%, 10%, or 50%, the bottom line is that it is only one of several costs to be incurred in the process of taking a novel concept to market.

Tales abound of radical solutions for man`s most dire needs never seeing the light of day because the inventor didn`t develop a channel to market, eventually went broke, and lost the patent protection altogether, unable to pay the rest of the patenting costs.

The full picture

The moral of the story is that nobody can afford to patent every bright idea; even if they could, it wouldn`t always be the correct thing to do. Careful consideration needs to be given to the potential market for the new idea before kicking off the commercialisation process. Once this decision has been made, accounting for the rest of the process should include not only the cost of patenting, but the entire cost of innovation and the innovation proceed only if able to afford the complete process. Would you build a house if you could only afford the foundations?

Looking at it this way, it seems absurd that anyone could be so na"ive and embark on the journey of innovation without the necessary funds. However, SA has little experience in commercialisation and typically does not know the steps in the exploitation process. This lack of experience and insight results in unrealistic budgeting and approaching innovation blind to the full picture. This is not restricted to individual inventors but is true for large corporations too.

Successfully managing IP is not only knowing what to patent, but also managing the cost versus benefit of commercialising new ideas.

Coming back to some of the debates on public-funded IP, one is left with the feeling that universities and other research institutions receiving government grants are henceforth expected to patent every vaguely novel idea derived from new research or face the wrath of the law, or at least lose some future research grants from the state.

This is absurd and signifies the need for broader education in parallel with developing new IP policies. Once we approach innovation realistically and set budgets accordingly, more of those bright ideas will be on the market here and abroad.

Stephan Lamprecht

GM of Technology Top 100, a brand of Da Vinci.

Stephan Lamprecht is an industrial engineer. He started his career as a consultant in the management of technology and innovation with the consultancy Venture Solutions, before joining Da Vinci to head Technology Top 100. He is vice-president of the Licensing Executives Society of South Africa, a professional society for people with an interest in the business of licensing and technology transfer, having 11 000 members in 93 countries.

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