Patents are increasingly a significant proportion of a cannabis company’s claimed valuation. As cannabis companies identify ways to differentiate their business from competitors, patents play an important role in ensuring that competitors cannot duplicate their products or processes.
Patents are often used to insulate products from direct competition by building temporary barriers to prevent competitors from using the same advantages. Companies can also build portfolios of patented technology that can be sold or licensed like any other asset, or used to enhance their valuation for acquisition or investment.
Not all patents, however, are created equal. Patents are supposed to be issued only for new and useful inventions, but many conflicts and self-sabotaging policies are built into the patent system that frequently result in “bad” patents–in all fields of technology–that would be invalidated if ever enforced. These patents look like all others at first glance, but they have no practical value. On the other hand, highly defensible patents may be practically worthless because they have no commercial applicability.
Involving a patent attorney who is familiar with the industry’s technology can significantly increase your ability to evaluate the worth of a patent or portfolio.
When reading and evaluating the value of a
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