Whether or not to file a patent is yet another business decision for the early startup founder. And as Peter Tormey points out in his ebook Startup Guide to Intellectual Property Early Stage Protection of IP,
Patents are expensive to get and expensive to enforce. Merely having a patent won’t make you rich. As an entrepreneur, you often have better things to do with your money — like R & D or marketing.
Tormey notes that your product usually isn’t just one single invention; it’s a collection of inventions. Your challenge is to identify the key technologies, those that provide a major competitive advantage, and patent them.
Tormey provides the entrepreneur with a set of examples of inventions that should be patented:
- When an invention does something truly surprising. Consider how hard it is to design around your invention.
- If it’s easy, don’t patent.
- If you can’t, consider a patent.
- Is your invention single use, or can it be used in multiple products? The broader the application, the greater the potential revenue stream it will derive.
- Does your invention save money?
- Are you planning on selling your business or seeking investors? Patents are important business assets.
- Patents help sales. “Patented” or “Patent Pending” support the novelty of the invention and give buyers confidence in the company.
- Seek design patents for visually oriented products. Design patents are affordable.
- Patent forward-looking inventions in fast moving technology areas.
Tormey also highlights types of inventions where patents might not be recommended; the underlying cost-benefit analysis usually shows the value of the patent is not worth the cost to the company.
- Inventions that can be kept secret can be better protected by trade secret, for example, a product that is hard to tell how it is made or what’s in it.
- If your product is just a better Google or a better Facebook. Don’t patent. There are teams at Google and Facebook already doing this.
- If there are other ways to do what your invention does, a patent won’t be worth much.
- If there are only a few potential customers for your product.
As a general rule, if you are not sure you should patent, then don’t.
Fortunately, with patents the inventor has a one year grace period to file the patent application. The one year period runs from the date you first offer the invention for sale or use publicly. You can test the market first to decide whether or not to file a patent, but you risk losing the patent to another inventor who might file first.
An alternative is to file a provisional patent application. It is a simpler application and does not require formal drawings. It allows you to delay filing your formal patent application for up to one year while you perhaps “shop” your idea and evaluate the value to your company of patenting the invention. However, you will not receive the full benefits of the patent unless you ultimately file the patent application within the year.
As Tormey points out, patents expire after 17 years, and then traditional market forces take over to value your product and IP. He gently reminds the startup founder,
If you have a product that is likely to have along life span, then your money might be better spent on building brand equity and lowering costs.
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