Two recent events have got me thinking again about patents and intellectual property (IP). The first was World Intellectual Property Day, which took place on 26 April. Held annually since 2000, it urges people to consider how IP “contributes to the flourishing of music and the arts and to driving the technological innovation that helps shape our world”. The other event was the International Day of Light on 16 May, which celebrates the huge impact that light, optics and photonics have had on our lives.

That day was chosen because it was on 16 May 1960 that the US engineer and physicist Ted Maiman successfully operated a laser for the first time. But as I mentioned last year, Maiman was not the only person with a reasonable claim to have “invented” the laser. The other was Gordon Gould, who didn’t patent his idea, incorrectly believing that he needed to demonstrate a working device first. As a result, Gould had to endure a tortuous 30-year legal battle before he was awarded a string of laser-related patents and millions of dollars in back royalties.

That’s the point when it comes to commercializing technology: inventors should make sure they get sound patent advice. Indeed, given the importance of IP, the Business Innovation and Growth group of the Institute of Physics is holding a series of “business accelerator” breakfast briefings on the topic this year, the first being on 28 June. But in a world with so many tools available to “reverse engineer” products and technology, are patents and trademark protection really your best defence against others making money from your idea?

Move on up

To get an idea of what’s at stake, consider Segways – those self-balancing, two-wheeled scooters that were launched by the US firm Segway in 2001. These “personal transit devices” would revolutionize human transportation, the company said, transforming how cities are laid out and how people get around them. Segway reckoned it would sell 10,000 units a week by the end of 2002 – that’s half a million a year. Indeed, one venture capitalist – John Doerr – even predicted the firm would reach $1bn in sales faster than any other company in history. The Segway, he said, could be bigger than the Internet.

Segway reckoned it would sell 10,000 units a week

Those were bold claims and naturally other firms took an interest too. Before long, Segway was up against China’s Ninebot with similar products. As the years went by, Ninebot grew – expanding first in China and then globally. Indeed, its success prompted Segway to file various patent-infringement suits against Ninebot. But as legal processes can drag on for years and cost lots of money, both companies continued developing their own products. In 2015, however, Ninebot bought Segway and rebranded itself as…Segway.

Now, a cynic might say that’s a perfectly good business model for a company in a country with notoriously weak IP laws (China). Copy a company’s product, make money from selling the copy, and then buy the original business and its IP. Look a little deeper, though, and it seems to me that Segway illustrates the fact that not all companies with great potential end up being commercially successful. Segway didn’t get its product quite right but was bought up, probably because it had, wisely, taken out good patents.

To see why, let’s go back to 2001 when Segways were launched. They were a cool concept and a sensation with the public. Unfortunately, they cost $5000, which put them totally out of reach for most people. In fact, you could have bought a great second-hand car for that price. Over the next six years, Segway ended up selling just 30,000 units, well shy of the original estimates. In 2006 the firm even had to recall all 23,500 units sold to date as a software bug sometimes made the wheels go into reverse, throwing the rider off. Indeed, it had already done a recall in 2002 for a similar issue. There was further bad news in 2010 when the British businessman who bought Segway less than a year previously, died after riding an off-road version of one of them off a cliff and plunged into a river near his Yorkshire estate.

Ninebot, in contrast, made more affordable road versions of the product, which sold in huge numbers. It got the price point and the application for the product right. Other companies did so too. A couple of years ago I bought a Chinese-made Inmotion V3 twin wheeler, which cost just £500, had better features and was light enough for me to take on the train as part of my commute. I still use it today and it’s great fun too.

Right way up

If the creation of the Segway has taught us one thing, it’s that it’s not always immediately obvious what inventions can do for us. The laser, you may recall, was deemed to be a “technology looking for an application”. Working out the best commercial opportunities requires good timing, a degree of luck and plenty of vision – especially early on. Make the wrong predictions and hindsight can make you look extremely foolish. Get things right, however, and the rewards are clear.

What the stories of the Segway and the laser tell us is that finding the right application is key to business success. New technology will win out only if it brings the right benefits to customers. But making the correct call and knowing the right answer aren’t always immediately obvious at the outset. That’s why it’s always wise and prudent for technology entrepreneurs to get good patent coverage if they want to reap the rewards from all their hard work.