During an innovation session, several types of innovations might arise. From a startup’s perspective, some categories of innovations can be highly useful, while others can be a wasteful distraction.
One category of innovation is the “defensive” innovation – a solution that seeks to block competitors from designing-around the startup’s planned, pending, or existing patented solutions. Stated differently, although the startup might have invented (and even patented) an innovative solution that it has proven (or will prove) to be the single best way to solve a customer pain point, the value of the next best way to address the customer’s need might be large enough, from the customer’s perspective, that they would be willing to pay almost as much for it.
A defensive innovation anticipates how a competitor might attempt to design-around one of the startup’s valuable innovations, with the competitor possibly relying on somewhat dated (or even outdated) technology, tools, and/or approaches. The startup protects itself from such inferior design-arounds by patenting them as well, even though it has no intent to implement those second-best solutions in its own product(s).
Patents claiming defensive innovations can be very useful trading cards in licensing negotiations with competitors, who might be willing to pay a substantial royalty to bring even a sub-optimal product to market. Awarding such a license might be particularly advantageous if it relieves the competitor of the pressure to leapfrog (i.e., out-innovate) the startup’s valuable innovation.
Next, consider the “emergent” innovation, which relies in part on a technology that isn’t yet practical for implementation in current products (e.g., it’s too expensive, scarce, undefined, unstandardized, unproven, unreliable, etc.), but could be a viable (or even the best) solution if the technology matures. Spotting such technologies, and visualizing how they can contribute to emergent innovations, can form the basis for very valuable patents. But given the variability associated with the development and direction of technology generally, patents for emergent innovations can be a rather high-risk proposition.
A related type of innovation is the “prophetic” innovation, which is a broad and/or general solution that guesses the future of the market and is likely to be technically achievable but presents few or no specific proven details because it has not yet been implemented (or possibly even prototyped). Given their futuristic leanings, such general solutions possibly can serve as the broad foundation for entirely new families of products that might rocket your startup to a large market share and massive profits. However, the much more likely scenario is that pursuit of a prophetic innovation will be a boondoggle.
Why is that? Even though (hopefully!) based on an identified customer need, the fact that a prophetic solution was just dreamed up for or during the innovation session means that there probably is little to no data evidencing real and strong customer demand for the specific products that will implement that general solution. Yet, the most valuable patents are those that, based on lots of hard data gained by disciplined, iterative, and sometimes rather laborious market research, prototyping, and experiments, are fully proven to cover highly refined products that customers unquestionably crave, as ideally evidenced by sales growing at a phenomenal rate.
Writing a patent application for a prophetic innovation is relatively easy, as it’s typically chock full of vagueness. But even if such an application matures into a patent (which is by no means guaranteed, particularly given its lack of detail), it can later prove very troublesome for your startup. That’s because the published prophetic patent application and/or patent can serve as prior art that blocks your startup from patenting later practical or “keystone” innovations that claim specific real world solutions (such as particular components, materials, or process steps) that fall within the umbrella/scope of what’s described in that futuristic prophetic patent. In other words, the content of your prophetic patent publication might doom claims to a later invaluable keystone innovation as legally “obvious”, thus preventing you from patenting that later innovation.
Keystone innovations that are patentable (e.g., aren’t blocked by a prophetic patent or other prior art) can be extremely valuable to your startup if they properly claim the single best solution to an unavoidable implementation problem that your startup conquered and your aspiring competitors will face. Such patents can allow your startup complete control over its market, at least until a competitor finds a way to leapfrog your essential innovation. Until they do, if competitors want to play in “your” market, they will have to pay whatever you demand or face the legal ramifications for infringing. Although each category of innovation can prove valuable, startups that own patents on keystone innovations can attract the greatest attention (and valuations) from potential investors, licensees, and acquirers. So, although they might not arise in an innovation session, always keep a lookout for innovations that stem from solving tough and practical engineering or product development problems that are at the crux of fulfilling customer needs/expectations. It’s likely competitors will face the same problems and might not be able to find any way around them other than implementing your (hopefully well-patented) keystone solution.