Commercialization and Its Links to Patent Renewal

Commercialization and Its Links to Patent Renewal

Anyone who has been granted intellectual property rights through a patent should understand the necessity of patent renewal because all patents expire after a given duration as stated by intellectual property laws in force. However, many patent owners find that the official duration is usually shorter than what they would ordinarily desire. Therefore, in order to continue exercising their rights, patent owners will often seek to have their patents renewed.

However, what many patent owners do not realize is the fact that the act of patent renewal has close ties to commercialization. When combined with the corresponding patent’s economic value, mode of commercialization, and the use of defensive patent strategies, the commercialization of a patented product and its relationship to patent renewal becomes extremely evident.

Commercialization, Economic Value, and Patent Renewal

The commercialization of any product allows it to generate more revenue, making it a more economically valuable item. Most patent owners generally only renew patents when it would be economically profitable to do so. For this reason, a common theory states that the most valuable patents receive the longest renewal durations.

This theory on commercialization and patent renewal has been proven true by this statistic: patents which are for commercialized products are up to one-and-a-half times more likely to enjoy long-term survival than are those for their non-commercialized counterparts. This large discrepancy is partly because most patent owners do not usually renew the patents of products which they have unsuccessfully attempted to commercialize.

Additionally, products with short lifespans seldom experience patent renewal even if they have benefited from much commercialization because these products tend to derive greater long-term value from utility models instead of patents. Products such as engine parts or battery-powered appliances which wear out rapidly are defined as products with short lifespans.

Patent Renewal and Modes of Commercialization

A product’s mode of commercialization depends on whether it is commercialized in its original firm or in a new firm. It also takes the licensing of the patent into consideration as well as whether the patent was sold to an external firm. Each of these modes of commercialization has a significant impact on whether a corresponding patent will be renewed.

Products which have patents sold to an external firm are least likely to have their patents renewed. These patents are likely to be allowed to expire; they also tend to have fewer forward citations as well as citations per patent. On the other hand, patents for products which were commercialized in their original firm last for the longest; they are by far the most likely to be renewed. Although licensed patents generally have the most citations, this generally has little impact on the renewal of related products.

Commercialization, Patent Renewal, and Defensive Strategies

In the field of intellectual property, defensive strategies are tactics used to defend an existing patent. The most common method of doing so is the commercialization or retaining of a patent in order to protect products with similar patents. Defensive patents also prevent others from infringing upon the patent owner’s intellectual property rights by using the innovation in an unscrupulous and unauthorized manner.

Patents used for defensive purposes are often renewed. Such patents are used to deny anyone else the opportunity to make an unjust claim over a different patent. Therefore, the products related to defensive patents are not usually commercialized as defensive patents normally protect the patent linked to that commercialized product. However, if a defensive patent happens to be related to a commercialized product, it is extremely likely to be renewed. Defensive patents with connections to a commercialized product are over 70% more likely to be renewed than any patent related to a non-commercialized item.

How Commercialization Facilitates Patent Renewal

A recent study showed that the three primary reasons for patent renewal are enhancement of the patent owner’s reputation, potential future use, and the increase of the power of a business’s portfolio. Each of these reasons can be strengthened by commercialization. If a patented product is commercialized, the patent owner’s renown in the business sphere will be elevated.
Commercialization also provides a patent owner with several additional avenues for future use. The owner might consider making a commercialized product the business’s signature product or use it as a bargaining chip in future business negotiations. Commercialized patented products also often make a patent owner’s business more appealing to investors because they enhance the quality of its portfolio.

This article is brought to you by Exy Intellectual Property Malaysia and Singapore.