When starting a new project, there are arguments in both directions :

Why you should patent

  • patents take less time than you might imagine
  • patents can be relatively cheap for a few years
  • patents can protect a competitive advantage
  • investors like patents
  • patents are valuable to larger companies

Why you should not patent

  • patents take time
  • patents cost money
  • patents are expensive to enforce
  • patents are easy to work around
  • patents disclose your technology

It would take a long article to clarify all of the above. So I’ll focus on some key points.

Deciding to patent

  • To be worthwhile a patent should be broad, for example, if your patent is for a new category of product it is probably broad enough in your market.
  • If your patent is not critical to a (hypothetical) company entering into direct competition with you, then forget it.
  • If you have done your own patent search (meet with the patent office to discuss how to do this) and you are convinced you have a broad patent, then move forward.
  • If the product category will disappear within 5 years, then don’t patent. It will most likely take at least this long to build a large company or sell your company. A patent only has value to an organisation that can defend it. While you are small you need to rely on moving fast.
  • If the technology is a major competitive advantage in your strategy then consider patenting. For example if your strategy is focused on branding then a patent is of much less value, in this case, if you are successful the brand holds the value.

When should you patent ?

Some jurisdictions e.g. Europe, require that the ideas patented have never been made available to the public. This is a little different in the other jurisdictions e.g. USA. So to make sure you can extend the patent internationally you should patent the idea before disclosing it publicly. However if you want to patent only in a specific jurisdiction, then you may be able to get some market feedback before filing your patent. In fact you might file a different patent or abandon the idea based on market reactions.

Patent after you have built a prototype of the product. It is inevitable that you learn a lot when making something for the first time. This will impact the patent.

Apply for the patent before approaching investors.

Provisional vs Final applications

Some jurisdictions e.g. New Zealand or USA, allow for provisional applications. A provisional application does not include the final claims of the patent and focuses on a technical specification of your idea. You’ll have one year to file a full specification and still claim the date of the provisional filing for precedence.

Provisional applications are much cheaper to file because they do not require as much legal expertise as a full specification. In fact in the USA provisional applications were introduced to encourage self filing (you file it yourself).

In the end it will cost more to file a provisional patent then final patent. But if you abandon the project or patent before filing the final patent you will save money. It can also delay your expenses, maybe until after you raise some money.

You don’t patent to go to court

It is a common misconception that people get patents to “protect” their ideas. In my humble opinion this is not the right perspective for an early stage project. For these projects patents are :

  • helping raising money from investors
  • increasing the exit value
  • slowing down the competition

The patent will slow down the competition because it is a strategic risk to infringe on a pending patent. Some companies will not take that risk and some will take that risk, there will be discussion and delays while the decision is made.

Imagine the worst case scenario, a large company decides to compete directly with you and infringe your patent, here is what might happen. Firstly, you should meet with the official patent office to discuss your options, for example informing your competition with a registered letter that they are infringing your patent and asking them to stop selling the product. If they continue and the product is successful in the market, you have a few options :

  • A substantial amount of the revenue generated by the infringing product may be awarded to you in a patent infringement case. Some lawyers may be happy to prosecute with no up front cost to you, in exchange for a percentage of any damages awarded.
  • Large competitors of the infringing company may have a strategic interest in prosecuting and may be more than willing to buy the rights to your patent to enforce it.
  • The infringing company may prefer to negotiate a licensing deal, which will of course take into account the revenue generated during the period of infringement.
In any case, while you are in the startup phase, forget about attacking the competition in court, instead out maneuver them in the market place. This is the biggest advantage of a small organisation in a new market niche.