Should I Get A Patent? For Startups and Young Companies.
As an attorney here in Silicon Valley, I probably get one question above any other, “I have this great idea for [insert idea to change the world], should I get a patent?” We wanted to break this down, explain a few concepts and give you some food for thought. Obtaining a patent is as much a strategy question as it is a legal question. Check out this article by Steve Blank which discusses distinguishing strategic vs legal decisions.
A patent in the U.S. is a property right granted by the U.S. government to an inventor to “exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States for a limited time in exchange for public disclosure of the invention when the patent is granted.”
Patents, however, are expensive. Running $5000 – $10,000 a pop, a high quality patent is a significant cost for a startup or young company and by no means guarantees success. A patent is just one asset that a young cash-strapped company can use to propel itself past competitors.
The first two questions you should ask and do your due diligence on are 1) is my idea patentable? and 2) is there already a patent out there for my idea? Let’s assume your idea is patentable and there is not already a patent on your idea.
The next question you need to ask yourself is whether a patent is the best way to protect your intellectual property (vs a trade secret for example). Remember, by patenting your idea/invention, it will be in the public eye via the patent registry. So to answer this question, you need to first answer how easily can someone replicate the idea/product if they got their hands on it in the open market and would it give them a significant advantage. Some fast-moving industries like software move so quickly that a patent may not be that beneficial vs spending more time and money on other assets.
If you can confidently answer yes to these questions, then obtaining a patent becomes more advantageous. With a patent, your competitors will need to find another way to achieve the same result you have with your product, thus giving you time to establish yourself within the market.
Timing Is Everything
The last thing to consider is when to get a patent. A product, let alone an idea, can change rapidly before it enters the market or shortly thereafter until the correct product/market fit is achieved. If you patent an idea/product too early, then you risk investing thousands of dollars on a patent that may no longer apply.
That being said, patenting an “idea” is probably not the best strategy unless you have significant data to prove that the idea can be directly translated into a product that will not be changed before reaching consumers. The likelihood of this is very low, but not out of the question. Furthermore, getting a patent should most likely be delayed until you have a substantially clear idea of the final product that will be sold to customers and you have evidence of sufficient demand for the product.
That does not mean that you cannot begin to protect your product when market testing, courting manufacturers/developers or iterating it with customer feedback. Your cash-strapped company is faced with two choices, 1) write the patent yourself, or 2) file for a provisional patent. In either case, when you can afford a patent attorney, you will likely create a more detailed and broader patent than what you have created. These two options ARE RISKIER in the short-run than obtaining a real patent attorney.
A Provisional Patent
A provisional application is a legal document filed with the United States Patent and Trademark Office (USPTO) that establishes an early filing date for an actual patent, but requires that the real patent application be filed within one year. So to say you have a “provisional patent” is a bit of a farce. A provisional patent, nonetheless, allows you to say “patent pending” for up to a year on your product until you obtain a real patent. The provisional patent is much leaner, but it will still be public information. Since there is no formal examination, filing a provisional patent only costs $125.
Provisional patents cannot be amended, but you can file multiple provisional applications (at $100 each) and roll them into a single application before the one year expiration. So after 6 months, you can look back on your provisional patent and ask yourself whether investing more time and money into greater protection makes sense. If yes, then you can work with a patent attorney to file multiple provisional patents or file a new formal patent once the provisional expires.
File A Patent On Your Own
There are successful entrepreneurs who wrote their first patent (i.e. Spanx and GoPro). If you want to write your own patent, I would start getting to know the patenting process from the materials provided by the USPTO at 800-PTO-9199 or 703-308-HELP or on their website. Also, start establishing relationships with patent attorneys now and pick their brain. You will need to tap these people when you decide to file for a real patent.
Many of you reading this might be in the software space. Neither UpCounsel, nor the attorneys we spoke to about this article advocate for software patents (with few exceptions). The fact is, until significant legislation is passed, software patents do exist and every company should understand their advantages and disadvantages.