Portions of this posting have been excerpted from Corporate Counsel (http://www.law.com/corporatecounsel/PubArticleFriendlyCC.jsp?id=1202598657487).

In an original article from Corporate Counsel titled “Patent Protection as Investment and Insurance,” the author discusses the importance of patents to businesses. He acknowledges that entrepreneurs have difficult decisions to make regarding resource allocation. However, he argues that efforts to reduce cash flow should not leave a company without a key asset: intellectual property.

The author stresses that intellectual property is an intangible 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.” He goes further and says “a company should invest in identifying and protecting its intellectual property, but should view the investment as a type of insurance policy. That is, treat the investment as a way of purchasing protection against a business problem that may arise in the future, or at least consider it as a source of leverage that will make handling the problem easier and less expensive than it would be otherwise.”

A patent application can convert an innovation into a valuable business asset that can be used to preserve or increase revenue. More than ever, because of the recent changes in United States patent law, companies need to be especially vigilant in identifying inventions and filing patent applications quickly.

The author also suggests that a “benefit of establishing a patent program . . . is that it provides evidence to prospective investors that a company is actively identifying and protecting innovations. As such, it may contribute to obtaining investment or continued investment. This is because the patent portfolio provides a tool that can be used at a later date to increase the value of a company and/or to help resolve a dispute with another company (and thereby preserve value).” He provides other examples of the value of identifying innovations and establishing a patent portfolio.

IP & Business Law Counseling, LLC can help your company implement procedures to rapidly identify innovations, build a robust and varied intellectual property portfolio, and leverage the value of intellectual property.