Why are patents a terrible way to measure Innovation.

patent In most corporates, patents are used as a KPI for innovation. Measuring innovation is a concern. Lots of indicators have been deployed and I haven’t seen so far one fully satisfactory. However if one is really bad at measuring innovation, this is « patents ». here are the reasons I classify « patents » as the worst indicator for innovation:

  1. Patents are not innovation
    Patents are a way to protect a development or a technology. Not to validate an innovation. Losts of patents are useless because there is no market, the technology is too expansive…
  2. To protect your innovation, patenting might not be the best solution
    When dealing with invention protection 3 alternatives are possible: *

    • Patent (just as most of corporate does), main advantage is that you will be the only one to use the technology but by publishing a patent you disclose the subjects you are working on.
    • Disclose (just as TESLA did). 2 strategies behind: « Catch me if you can » and impeaching other to protect it (as disclosed technologies cannot be patented afterwards)
    • Keep it secret. Risky if someone else patents your technologies but safe in the sense that nobody knows what you are working on and how you do it.
  3. Patents are not sales
    Are you sure that all your patents are generating cash for your organisation. It shound but is it really the case? Are your team patenting only things that will generate cash? Do you have the maturity to manage your patent portfolio in such a manner that 100% of your patents are useful for your business? Patenting to get patents and have an top level indicators is useless, and even more it is dangerous. Patents cost money and can cost a lot of money. « Patenting to patent » is even worth if your employees are rewarded when patenting…

A good article on the subject by the Washington post.

What is you prefered KPI for Innovation?

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