Patent strategy: open vs closed

Global societies have shifted in the last century, progressing from manufacturing-based economies to the innovation-driven economies that are more prevalent in the 21st century. This means that patent knowledge and strategy are now more important than ever in order to create business value.

Closed patent strategy

Traditionally, companies have used a closed patent strategy designed to protect and prolong the lifecycle of existing technologies from business competitors. Patents remain a popular way of safeguarding original work, with almost 3.17 million patents filed worldwide in 2017 (World Intellectual Property Organisation Indicators 2018). This is a 5.8% increase from 2016.

The patent system benefits both the inventor and the general public. Inventors protect their inventions from imitation by disclosing information to the public, in exchange for owning a limited-time monopoly and securing a large share of the market. For the public, anyone with access to the patent data can improve upon, combine, or invent around the initial patented idea. It is extremely rare for inventors to come up with a brand new idea, so having access to a high quality and up-to-date patent database such as PatBase is essential.

Companies that know what to look for in patent data can exploit patents in their favour. A prime example of patent exploitation is shown through the evolving nature of the smartphone market.

Smartphone case study

Nokia and Blackberry dominated the high-end phone market in the early stages. However, since 2011 they have been usurped by Apple and Samsung, with an estimated value capture of 42% and 34% of the market share respectively in 2017 (World Intellectual Property Report 2017: Intangible Capital in Global Value Chains).