What distinction is critical when assessing the historical profitability of patents that were not widely commercialized?
Answer
The difference between the patent's paper value and its enforced value through litigation.
A patent's existence on paper does not automatically equate to financial return. It is crucial to differentiate between the theoretical or 'paper' value—the potential worth if every infringer paid royalties—and the actual 'enforced' value. This enforced value is only realized when the owner demonstrates a willingness and ability to successfully defend the patent in court against infringement, compelling settlement payments or licensing agreements, turning intellectual property into tangible profit.
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