Montana Patents—We've Got Some Catching Up To Do!|
Montana currently ranks 38 out of 50 states for per capita income, up from 47 in 2014, and has enjoyed the fifth fastest wage growth among all states over the past decade. According to Barbara Wagner, Chief Economist for the Montana Department of Labor & Industry, Montana's higher per capita income rating is due at least in part to our high level of entrepreneurial activity. See "Montana's Growing Wages: Income and Wages Are Gaining Ground on National Average," Montana Economy at a Glance (May 2015). As we reported in December, Billings ranks #1 nationwide for entrepreneurship and innovation and is in the top 100 among all cities in the United States for women entrepreneurs. As of the writing of this article, Montana ranks fourth in the nation for the number of craft breweries per capita. Although traditionally highly dependent on agriculture, mining and tourism, Montana's growing cadre of entrepreneurs is bringing increased diversity to Montana's economy.
Despite the flourishing entrepreneurial environment, Montana lags behind the rest of the nation in terms of the number of patents. In 2014, the last year in which such statistics were compiled, Montana was tied with South Dakota for third last—beating out only North Dakota and Alaska—for the number of patents issued. For the four decades from 1963 to 2014, Montana ranked sixth last—ahead of Alaska, Hawaii, North Dakota, South Carolina and Wyoming. In 2015 alone, 218 patents were issued to Montana inventors; this figure represents a 34% increase over 2010.
As of the end of 2013, there were nearly ten million patents in force worldwide. About eight million patents have been granted in the United States since our patent system was instituted in 1790. From 2010-2014, the greatest number of patents issued to Montana inventors were for games, drugs and "package and article carriers." In my opinion, this fact is not necessarily a reflection of the Montana economy but rather of the types of companies (gaming and pharmaceutical) that decide to invest in patent protection. In our practice, the areas of greatest patent activity over the past five years have included inventions relating to software, oil and gas, recreational activities (hunting and fishing), and agriculture (farming and ranching).
The decision to file a patent application should take into account the benefits of holding a patent as well as the costs of obtaining and enforcing the patent. It costs approximately $10k to get a utility patent application on file, and most enforcement actions are resolved without resorting to litigation. There are many reasons inventors decide to pursue patent protection, including (a) deterring competitors, (b) creating licensing opportunities, (c) attracting investors and (d) increasing the value of their company. We counsel our clients to undertake a cost-benefit analysis before proceeding with the patent process. Patent protection makes sense for some, but not all, inventors. Some inventors elect to keep their intellectual property as a trade secret or to be the first to market in lieu of seeking patent protection. If we are to increase the level of patent filings in Montana so that it is commensurate with our culture of entrepreneurism, then more inventors will need to conclude that the benefits of obtaining a patent outweigh the financial costs of going down the patent road.