Lawsuits are sometimes viewed as a necessary evil, or a cost of doing business.  But the cost is often steeper than most imagine.  That point was aptly made in a recent article I found about the European Commission’s decision to launch an antitrust investigation against Google.

For starters, the EU probe requires Google to divert time and money toward handling the investigation.  Those costs will necessarily include the preparation of a legal defense.

The fact that the EU is conducting an investigation could turn into a litigation lightning rod – other countries may launch their own antitrust probes and competitors might use the information gathered in these government investigations to launch their own civil actions.

It’s no fun being turned into a litigator’s chew toy.  Costs can start to spiral very quickly, as Toyota has recently discovered.

One way to avoid such distractions is with better risk management techniques.  As I recently discussed, one study shows that companies who prioritize their risk and put resources behind managing the biggest threats experienced 20 higher revenue growth and up to 50 percent higher earnings than their peers.

Now that’s something worth getting distracted about!

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.