Alfred Nobel Prize centennial US stamp 2001

Which would you pick: The Nobel prize or a patent? If you’re like me, your instinctive reaction is to choose the Nobel. Its scarcity, prestige, and certainty of financial reward are unequaled. In this article, we’ll compare the merits of the Nobel award with the value of patents. Alfred Nobel himself will be our primary case study. 

Nobels are rare

In over 100 years, there have been fewer than 600 Nobel prizes awarded (to a total of 900 laureates), as against more than 9,000,000 U.S. patents issued since 1790. The latter are more common by a ratio of 15,000 to one.

Nobel has privileges and perils

The Nobel prize carries a cash award of about $1.4 million (less if shared with one or two others).

If you’re an American winner, you’ll be awakened by an early-morning, early-October telephone call from Sweden. See Nobel Prize winning scientists (NYT Oct. 4, 2015). You might suspect it’s a joke.

Your life as a Nobel laureate will change. You’ll be in the public eye, invited to speak, offered the faculty or government position of your choice. You’ll have to fight the temptations “to rest on your laurels” (almost literally) and “to pontificate on grandiose questions,” in the words of Nobel physics laureate Frank Wilczek. See How does winning change life of laureates (Editage Oct. 3, 2015).

There is one other nice thing about winning the Nobel prize. It’s only awarded to people who are alive (or reasonably believed to be alive) when it’s announced. So you have a good chance of basking in the limelight.

Patents vary in worth

Let’s get this out of the way quickly: Most patents are worth less than a Nobel award.

But some patents are worth a fortune. Literally.

As a case in point, take Alfred Nobel himself. After he he invented, patented, and commercialized dynamite and other explosives, he “used his enormous fortune from 355 patents” to institute the Nobel Prizes. See Nobel bio (biography.com).

3 critical steps to a fortune from patents

The three steps followed by Mr. Nobel are instructive:

  1. Invent
  2. Patent
  3. Make and sell

See my popular 2 minute video: How to make money on your patented invention (at BeemLaw.com). See also my series on the 4 W’s of patent.

It was the patent system that made the Nobel prize possible. Mr. Nobel’s patents gave him an advantage over his competitors, allowing him to build factories and conduct international business on an unprecedented scale. At the time of his death, he had more than 90 factories in operation, making explosives and related products. As the market leader—a patent conveys the exclusive right to practice the claimed invention—Mr. Nobel was able to command large revenues and high margins.

Click here to see Alfred Nobel’s U.S. Patent 78,317 for “Improved Explosive Compound,” later to become known as dynamite. (The PDF version is more readable than the HTML text apparently generated by poor quality OCR.) (Note to Google: Doesn’t this historic patent deserve clean-up?)

Interestingly, Nobel’s invention was only a minor improvement. He admitted in his patent that his two ingredients, the “explosive substance nitro-glycerine” and an “inexplosive porous substance,” were “long known.”

This also is instructive: A “minor improvement”—one necessitated by the vicissitudes of the real world, namely, the explosions of nitroglycerin that caused the deaths of Mr. Nobel’s brother and several other people—can be enormously important and hugely valuable.

Mr. Nobel also patented the detonator, the blasting cap, and several improvements on dynamite.

Nobel held patents on dynamite, but competitors ‘stole his processes’ and forced him into patent litigation

Encylopedia Britannica has this to say about Nobel’s need to resort to the courts to enforce his patents against inevitable infringers:

“Although Nobel held the patents to dynamite and his other explosives, he was in constant conflict with competitors who stole his processes, a fact that forced him into protracted patent litigation on several occasions.”

Here again, Mr. Nobel’s experience is instructive. If your invention is successful, it will be copied. Patents and enforcement in the courts may be your best recourse against those who would copy your inventions and undercut your prices.

In previous articles, I’ve written about two cases that involved a valuable patent being awarded to one party while the Nobel prize was awarded to the other party.

One landmark case involved the invention of polypropylene, for which the Nobel prize was awarded to Ziegler and Natta, while the patent ultimately was issued to their competitor Phillips Petroleum, along with substantial license fees, damages, and commercial advantages. See How long should a patent claim be?

Another set of big cases involved the computer chip, for which one patent was issued to Bob Noyce of Fairchild (later assigned to Intel), while another patent and the Nobel prize were awarded to Jack Kilby of Texas Instruments. See Three takeaways from computer chip patent wars. Even without a Nobel prize,  Intel profited immensely from the Noyce patent.

Perusal of Nobel prize winners, their organizations, and their inventions will show that many of the inventors and inventions are obscure. They have bragging rights, especially academically. Most of the credited organizations are universities or other research institutions. Few Nobel-bestowed entities are corporations concerned with making and selling the inventive products.

In contrast, patents, though sometimes speculative, can become valuable currency in business. Thomas Edison, among others, changed the world with his patented inventions.

If you’re in business, that is, to make a profit, it is by no means clear that you would choose a Nobel prize over an industry-dominating patent.

Here is a closing thought regarding Nobel-versus-patent. One does not apply for a Nobel prize; the Swedish Academy will find you. In contrast, the only way to get a patent is to apply for one. The surest way not to get a patent is to fail to apply for one. Click here to see my video, Why your patent may not issue. Two examples: (1) Atanasoff and Iowa State failed to apply for patent on the first digital electronic computer and (2) Jonas Salk did not apply for patent because his organization thought the polio vaccine was unpatentable.

In sum, when you and your company make improvements to meet customer needs, be like Alfred Nobel. File patent applications, and then make and sell the improved products for revenues and profits. As for the Nobel prize, no application is necessary, so let that phone call come when it may.