Startup Patent: Everything You Need to Know
A startup patent is an important decision to make when considering your options as an inventor.3 min read
A startup patent is an important decision to make when considering your options as an inventor. There are pros and cons to applying for a patent as well as other avenues you can explore, such as provisional patents. Having the right information in order to make an informed decision is critical.
What Is a Patent?
A patent provides an inventor with a type of monopoly over an invention for 20 years, preventing others from stealing or duplicating their idea. It is important to note that patents are only applicable in the country in which they are filed. If your invention has worldwide potential, you will want to determine which countries to seek patents from.
The 3 Simple Patent Rules
Follow these three rules when considering a startup patent:
- Only consider a patent if you need to raise money.
- Don't patent on the defensive.
a. Trying to protect your invention from a competitor as a startup can be a costly mistake.
- Only patent on the offensive.
a. Having a patent portfolio makes you appealing to big companies that may otherwise be your competition.
b. Having a patent filed by a firm with a good reputation provides legitimacy and can be appealing to potential investors who don't have the time to fully investigate the details of your invention.
Analyze Pros and Cons of a Patent
It is important to analyze the risk of not protecting an invention with a patent versus the cost of applying for one. A patent attorney specializing in startup patents can help you develop a strategy for patenting that covers funding concerns and acquisition goals.
Timing is Important
Not filing a patent on time can put your invention at risk. Here are some of the benefits to filing a patent in a timely manner:
- Patents increase investor support by showing them the value and potential of an invention.
- The patent timelines encourage inventors to be aggressive in development.
- Having a patent application can discourage others trying to do the same thing.
When Startups Should File a Patent Early On
There are additional benefits to filing a patent application as a startup:
- Patents generally increase funding, especially in the tech industry.
- Venture capitalists seem to favor inventions with patent applications.
- Patent applications make you more appealing to corporations looking to buy inventions.
- Establishing a patent portfolio can work as a defensive strategy against infringement claims.
Why You Shouldn't Seek a Patent
In some cases, it doesn't make sense for a startup to seek a patent. Three things to consider when deciding if a patent is necessary are:
- Patents are expensive, time-consuming, and restrictive.
a. The patent application process can take anywhere from 2.5 to 5 years to complete.
b. Experts state the patent application process can cost anywhere $6,000 to $60,000 in total, with no guarantee of a patent ultimately being granted.
c. Ninety-seven percent of inventions granted a patent end up making less money than what it cost to patent.
- A patent can hinder your execution time.
a. The faster you are able to get an invention or idea into the market, the better your chances are to start generating money.
b. Most startups alter their initial ideas once they are actually in the marketplace where others can use and provide feedback.
- Protecting your IP doesn't require a patent. You can secure your idea through other means, such as:
a. Obtaining a company domain name, preferably ending in ".com".
b. Publishing social media usernames for your company
c. Trademarking items like company name, logo, products, slogans, taglines, and services.
Raising Money via Provisional Patent Applications
Research patents your ideal investor has filed to see what they are looking for and find ways to improve the chances of them liking your patent portfolio. Provisional patents only cost $70 to file with the USPTO and provide you the opportunity to identify your invention as patent-pending for an entire year. A comprehensive provisional application is appealing to investors in the tech industry and is usually easy to sell.
A detailed and complete patent strategy doesn't have to cost money. Utilizing tools available to you such as provisional patents can help you tell your story and encourage investors to buy your invention.
If you need help with a startup patent, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe and Twilio.