20 April 2019

Think Like an Investor

A prospective client came in to see me a few days ago. He had picked up a few old-style games. They require manual manipulation. Apparently there is a resurgence. The idea is that one's children can fiddle around with something at airports, etc.

The games had been covered by various patents. These have all expired. My visitor thought it might be a good idea to approach some large manufacturers/distributors with the games. He has no protection. Why wouldn't the manufacturer/distributor just simply copy the games? In my experience, that's what most people would think. But it's a little more involved in that. There are many large corporations who are quite happy to reward a developer even if there is no protection, per se. But it's important to remember that the corporation would like to know what is in it for the corporation.

In this case, the corporation would have to develop an entire production line to produce the games. Why would it do so if it had no protection?

But protection is not everything. Many of my clients develop products that are extremely valuable because they have established a company and built a production system owned by the company. For example, they pack the product into their luggage and fly to China to see factory owners. They visit local retailers to establish an acceptable pricing regime. Most importantly, they actually establish a real trade channel. Then, the reward is simple. The corporation simply buys the company. The benefit to the corporation is that all they have to do is add money. They already have a competitive advantage because of the established trade channels. A patent that is in force simply amplifies the reward. It is not the primary motivator for the reward.

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