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Don't Give Up the Ship- A Patent Abandonment Folly

Here's a story: A company decides to spend considerable time and money innovating a novel and useful accessory that goes along with one of the their top product lines.  They believe launching the accessory into the market will bring them a competitive edge and boost profit margins.  To help keep competition at bay, they also attempt to protect their rights by filing a patent application.

After a few months, the company's sales team discovers that the accessory isn't selling well and does little for their market share.  It becomes the company's belief that it should forfeit its patent application, a move that seems more economical than paying attorneys and costly government fees for protection on something that just isn't bringing in money.  So instead of moving forward and attaining a patent, the company opts to give up and abandon the application.  In the end, it simply moves on with other endeavors.

At first glance, the company's decision may seem cost effective and something you'd likely do under similar circumstances.  However, think twice because this decision may actually become very costly---one that's likely to be permanent.

Abandonment Explained
Patent abandonment is an affirmative act at the U.S. Patent Office in which one dedicates pending patent rights over to the public.  Abandonment can occur at various points after an application is originally filed and throughout the life of the subsequently issued patent.  Once purposely abandoned, all rights are lost for good.  Moreover, any given pending application typically publishes within 18 months after its original filing.  Once published, all information in the application becomes free for public viewing and easily discovered over the Internet.  Valid applications also must be enabling, meaning that each will teach someone skilled in similar technical fields how to make and use what ultimately could be protected by the issued patent.  The idea being that when patent rights expire, the public understands how to construct the subject of the patent.  Abandoned patent applications clearly show competitors exactly how to create whatever's been given up.  

At this point, you may be thinking, "What's the big deal?  If my company gave the public an accessory that wasn't profitable, the competition would surely see that making and selling the thing wouldn't help them much either."  But would they see it this way?  Let's look at what could happen afterward, when the accessory is free to all.  

Competitors usually sell similar product lines, not identical ones.  The differences in their products could make a tremendous difference in the market.  When sold with a competitor's product, your accessory could actually become profitable.  To figure this our, your competitor's engineering and marketing teams need only read the application  you abandoned and conduct simple testing to determine whether your accessory works in their favor.  This wouldn't be very difficult, since you've told them how to make it and the problems it could solve.  

Your competitor also can innovate by freely using your abandoned accessory as their starting point.  If they're smart, they'll use their saved resources to create patentable improvements on top of your accessory.  What's worse, these protected improvements could be the missing elements needed to make the accessory profitable in the first place, which would in turn create stronger competition and block you from a part of the market you originally attempted to capture.

Consider This
If you are considering abandoning a patent application, remember that competitors may not see things the way you do.  Where you see cutting losses, the see opportunity.  Abandoning a patent application gives the competition an opportunity, one that could even be used to keep you from profiting.  So think about your company's future before giving up on any pending application.  Passing up your rights may end up being a costly decision---one that you likely can't fix after the fact.