What happens if you do not patent your inventions?

  • Somebody else might patent them - In most countries (with the exception of the United States), the first person or enterprise to apply for a patent for an invention will have the right to the patent. This may in fact mean that, if you do not patent your inventions or inventions of the employees of your SME, somebody else - who may have developed the same or an equivalent invention later - may do so and legitimately exclude your enterprise from the market, limit its activities to the continuation of prior use, where the patent legislation provides for such exception, or ask your SME to pay a licensing fee for using the invention.
  • Competitors will take advantage of your invention - If the product is successful, many other competitor firms will be tempted to make the same product by using your invention but without having to pay for such use. Larger enterprises may take advantage of scale economies to produce the product more cheaply and compete at a more favorable market price. This may considerably reduce your company’s market share for that product. Even small competing enterprises can produce the same product and often sell it at a lower price as they do not have to recoup research and development costs incurred by your SME.
  • Possibilities to license, sell or transfer technology will be severely hindered - Without IP rights, transfers of technology would be difficult if not impossible. Transfer of technology presupposes ownership of a technology which can only be effectively obtained through appropriate IP protection. Moreover, wherever negotiations do take place for transferring a given technological development without IP protection over the technology in question, parties are suspicious of disclosing their inventions, fearing that the other side may “run away with the invention.” IP protection, in particular patent protection, is crucial for acquiring technology through its licensing.