Today’s Wall Street Journal has an interesting article about how Toyota is leveraging it’s investment in product development with patents.  More specifically, Toyota has been diligently patenting the inventions resulting from the engineering developments associated with its best-selling hybrid Prius brand automobile. 

According to the Journal, Toyota has applied for more than 2,000 patents and is building a castle wall around its technology.  Raising the barriers to entry in this segment of the car market not only makes it more difficult for competitors to enter the field.  It also tees up Toyota’s patents (if and when they issue) for licensing and royalty potential.  It’s a great example of legal leverage.

For more information about the power of patents and how to use them for strategic business advantage, click here.

Litigation  . . . is a matter of business strategy.

Kazumi Kuriyama, general manager of Pioneer’s intellectual property unit as quoted in “Asian Electronics Makers Waging All-Out Patent War,” June 10, 2009.

A flat-screen TV typically contains memory, image-processing chips and technologies from multiple companies.  Those technologies are made available to a given manufacturer through a series of cross licensing agreements.

Things get infinitely more interesting when the cross licenses are up for renewal and terms can’t be agreed to.  That’s when litigation lightning coupled with the threat of an injunction is most likely to occur.

With product sales in the billions and damage claims for patent infringement in the hundreds of millions of dollars, there is considerable pressure to reach a favorable resolution and litigation becomes another tool in the negotiation arsenal.