Intellectual property - SME's beware

Is it necessarily a good idea for small businesses and start-ups to take out a patent to protect themselves against competition or copying? The resounding sentiment from a recent panel discussion hosted at the Innovation Hub in Pretoria on Commercialising Intellectual Property was: no, not unless you have nearly limitless funds to enforce that patent.

Walter Smuts, the founder of IT firm Expert Ron, believes that relying on a patent is an exercise in futility for small businesses.

Here is why:

A patent is awarded only for a period of one year.

The South African Patent Office is little more than a "filing cabinet" for patent applications. A patent is awarded only for a period of one year, and trying to have it enforced if someone does infringe on these rights is a costly affair. Having a patent is worthless unless you have the capability of enforcing it, he says.

A patent protects you only against those companies that are smaller than you.

Small companies and startups are better off spending their time and money on gaining market share and traction. A patent protects you only against those companies that are smaller than you and therefore unable to carry the legal burden involved in taking the fight to court.

A patent can be worthwhile if you have the right partner.

A partner with considerable financial muscle to help you fight off competition or to enforce your rights. If you do not have this luxury, the best protection is to build up market share and let the competitors try to compete on this basis.

Stay ahead of the curve.

The best strategy is always to beat the competition by staying ahead of the curve by developing services that take advantage of technology trends. "All we have is our wits," he says, in relation to creating winning products.

Develop a collaborative relationship with that patent holder.

When starting to develop a new system or service in which certain patents already exist, rather develop a collaborative relationship with that patent holder to jointly benefit from the opportunities in the market.