U.S. patent protection is an extremely important consideration for any business involved in the manufacture and sale of products in the United States. The owner of a U.S. patent has, for a limited time, the exclusive right to make all sales of the patented product in the U.S. market. Because the patent owner can legally stop others from making and selling the patented product, a patent owner can charge a premium price for a product they make and sell that can be much higher than the actual cost to manufacture and sell the product.

This means that the patent owner can make potentially very high profits on sales of the patented product during the life of the patent, which can help the owner more quickly recover the investment made to develop the new product. Even if the patent owner does not make and sell the product, they are legally entailed to collect at least a reasonable royalty from anyone else who does. You can always consult with a professional patent agency, such as Invent Help, for any information.

An Example of the Effect on Price of U.S. Patent Protection

A common example of the effect of patent protection on price is the sale of “brand name” drugs at high prices. The patent protection on brand name drugs is what allows the company who first invented the drug to sell it at a high premium price without competition. However, once the patent protection ends competitors enter the market with a “generic” version of the drug at a lower price, taking sales away from the brand name drug, and possibly forcing the manufacturer of the brand name drug to lower its prices in order to maintain sales.

While nobody likes paying high prices, the reality is that without the availability of patent protection and the potential to charge higher prices for at least a limited time to recover development costs a business may be unable to justify the risk of investing money to develop new products. This is particularly so in areas where the cost of research and development is very high (as in many millions of dollars), such as with pharmaceuticals. The higher price consumers may have to pay for a limited time due to patent protection is the price society has decided to pay for encouraging business to investment in new technologies and products.

Profit Considerations

Since bringing a new product to market is often a very expensive and risky investment for a business, many times it can only be justified if there is a potentially very high profit to be made that justifies taking the risk. Accordingly, the availability of patent protection is often a critical factor to consider when deciding whether an investment in a new product is justified.

Without patent protection a business that introduces a new product may not be able to make enough sales at high enough prices to generate profits sufficient to justify the risk of an investment in the new product. Effective patent protection however is often a difficult thing to obtain. The U.S. patent laws can be complex in their application. Individuals with ideas for a new product are particularly vulnerable to being sold services related to patent protection that are ineffective and offer little if any real value.

Be Informed

It is highly recommended that before making any substantial investment in the development a new product, including any services related to protecting, promoting, or manufacturing a product, that an individual or business first consult with a qualified  patent agency like InventHelp. Doing so can save a great deal of time, trouble, and expense in the long run. Affordable consultations are available from the law office of registered U.S. patent attorney.