A patent does not automatically mean you have free rein

Many entrepreneurs think: “If I have a patent, I can automatically sell my product.” It's logical to expect that; after all, you've invented and registered something unique. Unfortunately, that's not how it works in the world of patents.

A patent is not a right of use. It is the right to prohibit others from making, using, or selling your invention. But that does not mean you have free rein.

Marco Coolen, photo © Bart van Overbeeke

How is that possible?

Here's how it works: your invention may well be a clever improvement on something that already exists. Perhaps you have made a machine more energy efficient or improved the accuracy of an existing medical instrument.

But if the original technology has already been patented by someone else, you are building on someone else's patent rights.

This means:

✔️ Your patent protects your specific improvement.

✔️ But your basic solution is still covered by the other party's earlier patent.

✔️ Without the other party's permission, you may not even be allowed to market the product.

Why is that important?

Many technologies today are complex and consist of multiple layers of innovations. In sectors such as mechanical engineering, electronics, medical technology, and software, companies often build on existing technologies step by step.

This creates an interesting dynamic:

• Your patent does not give you carte blanche to make everything.
• It does, however, give you a bargaining position.
• You have something that the other party may also need to develop their product further.

The role of licenses

This is where licenses come into play. Suppose:

• You have a patent on a significant improvement.
• Someone else has the basic patent on which you are building.

Then you can offer each other something:

• You need their basis to make your product.
• They need your improvement to improve their product further.

With a license, you give each other permission to use each other's patents. This is often preceded by negotiations in which you agree on conditions, duration, and compensation.

This is also known as cross-licensing and is common in sectors where many patents coexist and overlap.

The World of Patents

Dutch and European patent attorney Marco Coolen (AOMB) provides us with a deeper understanding of the world of patents. How do they work, why are they essential, but also: when do they lose their usefulness?

View The World of Patents

Practical example

Suppose you develop a new drive for an existing machine. Another company has already patented the basic design, but your innovative drive offers 20% extra efficiency and is also patentable.

So you have a patent, but without their permission, you may not be able to manufacture or sell the complete machine. On the other hand, they cannot simply use your drive without your permission.

This creates a negotiation in which you can offer each other value.

Patents give power, not freedom

A patent does not automatically give you the green light to do anything you want with your own invention. What it gives you, above all, is negotiating power.

It is essential to understand this difference. Doing so will help you avoid unpleasant surprises and enable you to operate more strategically.