Patents Add Value

A recent Australian survey conducted by the Melbourne Institute for Applied Economic and Social Research, and the Intellectual Property Research Institute of Australia, shows that patented inventions are likely to make more money than non-patented ones.

The 2007 Australian Inventor Survey organisers sent questionnaires to every inventor who filed a patent application in Australia between 1986 and 2006. The survey results indicate that the existence of patent protection for an invention may increase the commercial return on that invention by up to 47%.

Of course, for any survey to be reliable it must have a sound methodology. In this case inventors who did not try to get patent protection were not questioned. So the survey has its limitations. But the results cannot be easily dismissed.

And just because the average premium is 47%, that doesn’t mean all inventions are worth more if they are patented. A good IP lawyer will be able to advise an inventor what the best strategy is for an invention. Sometimes the best strategy is to keep the invention as a trade secret. Sometimes it will be to file a patent application. Sometimes there are other, cheaper options available (e.g. filing a registered design, or relying on copyright). Inventors need to understand their options and get advice early, and not disclose their invention to anyone before they have got that advice.

But the survey confirms what so many in the innovation game already know – a patent can add considerable value to an invention.