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The Value of a Patent to the Entrepreneur

ttools case

Context

New market (PDA) with high growth

One leader Palm (70% MS - 1998)


Hazzard family saw a new and profitable business opportunity in the pen/stylus (PDA accessory) Hazzard founded ttools company, with their patent invention application However, after a couple months, Palm and IDEO copied Hazzards invention Ttools has to decide its strategy now

ttools timeline
1.

Hazzard noted his musings, sketches, and designs in a dated sketchbook May 1996 April 1997. Asked his patent attorney to do a prior art search the search confirmed he had a novel, nonobvious and useful design. Presented the pen/stylus to Palm, they signed a nondisclosure agreement March 1998.

Conceptualized process:

2.

Prior art Search:

3.

Demo to Palm:

4.

Ttools patent application

Self financed application (with a patent attorney) May 1998. The USPTO issue ttools patent June 1999.

Study questions

Evaluate the three options at the end of the case. Consider the options ttools has by virtue of its issued utility patent. Is this an important asset at this point in the evolution of its business? Why or why not? Which path forward would you recommend the Hazzards choose? Explain your reasoning.

The three basic options

Compete against Palm


No direct cost Palm wants to sell IDEOs product ttools will lose investors

Negotiate with Palm


No direct cost Palm was not interested in a negotiation (We created the PalmBe grateful for the business you have)
ttools will have to share its profits with Palm

Pursue a patent infringement legal action against Palm & IDEO


Good chances to win Can be a long and expensive strategy

Study questions

Evaluate the three options at the end of the case. Consider the options ttools has by virtue of its issued utility patent. Is this an important asset at this point in the evolution of its business? Why or why not? Which path forward would you recommend the Hazzards choose? Explain your reasoning.

Is it important a patent?

Has ttools another competitive advantage? Is ttools in a strong negotiating position?


It is a small company IDEO has the design Palm does not want to negotiate with ttools

The only asset of the company is the Patent

Study questions

Evaluate the three options at the end of the case. Consider the options ttools has by virtue of its issued utility patent. Is this an important asset at this point in the evolution of its business? Why or why not? Which path forward would you recommend the Hazzards choose? Explain your reasoning.

Which path forward would you recommend

It depends on
Evidence How similar are the designs ttools budget

Pursue a legal action

The Value of a Patent to the Entrepreneur


ttools case

End

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