It is hard to overemphasize the importance of intellectual property protection for startups. Without protection for your brand, inventions, and original creations, you have no chance at commercializing your unique value. You are defenseless against (often larger, better funded) competitors, and you can present no convincing value proposition to potential investors and/or acquirers.
For this reason, a thoughtful IP strategy should be among every startup’s highest priorities. LawTrades provides you with free, comprehensive information about IP strategy elsewhere. This article hones in on one specific aspect of such a strategy: patent protection.
Patent protection is your job
This might seem obvious, but startups often make the mistake of assuming their job is done once a patent has been granted. This is not the case. When the USPTO grants a patent, it confers the exclusive right to use, make and sell that patented invention to you. It does not, however, police your competitors.
It is up to you to detect whether or not there are infringements of your patents. If you do find infringements, you have (by virtue of your patent) the right to institute a claim against the party that is unlawfully making, using or selling your invention. The remedies that you will be granted includes an injunction prohibiting your competitor from continuing the offending behavior, and possibly an order of damages in your favor.
How to protect your patent
To ensure patent prosecution in this manner, you have to stay vigilant. Scour the internet and market for possible infringements of your patent, and if you find them–take legal action. That seems simple enough, right?
Not really. There are a few problems with taking only this advice in isolation:
As a startup, you will (almost by definition) not have the funds for lengthy litigation. Anyone worth suing will outspend you in court.
You will also, in all likelihood, not have the money and resources needed to file for a patent every time you think you might be on to a new invention.
Time you spend on lawsuits is time you could have been spending growing your startup. In other words: the opportunity cost for patent prosecution is high. You need to ensure that you do it strategically.
And that is why having a thoughtful patent protection strategy is so important. Patent protection should be done with a clear view of your business, your growth strategy, your market, and your strategic position.
Three approaches to patent protection
The offensive patent strategy
An offensive patent strategy entails filing patent applications for all reasonable inventions as soon as possible. Here, you file to protect the potential value of your invention.
If you follow this approach, you will be able to block competitors from using your invention, and you might be able to generate royalties by enforcing your patent rights. However, as you might expect, this is an expensive strategy. Filing for patents, and constantly scouring the market for possible patent infringements, as well as the legal costs associated with enforcing royalties and prosecuting competitors, takes an army of patent attorneys and a lot of money in the bank.
As you might expect, this is therefore a strategy favored by large companies: Microsoft, IBM, Honeywell, etc. This is, in part, good news for you as a startup: you know your competitors’ playbook.
The defensive patent strategy
A defensive patent strategy entails only filing patents where you want to ensure that you will be able to use innovations without the risk of competitors patenting it. In short, you are filing to create value (and not protect it).
This strategy will entailing filing patents less often, and approaching your patent portfolio as an asset that provides negotiating power. This strategy is associated with lower costs, and is therefore more suited to startups. A disadvantage of the defensive patent strategy is that it also provides you with less opportunity to profit from royalties – but if your startup is focussing on building value elsewhere, that is a bearable cost.
When you are using this strategy and you are faced with infringement lawsuits (as you might be given your lower filing rate), you can use your patent portfolio to negotiate a settlement, or consider cross-licensing patents as settlement.
Defensive publication or disclosure
Another approach to patent protection can be not to file for patent protection, but rather to disclose your inventions along with detailed descriptions so that they end up in the public domain. This will ensure that no competitors can patent the invention–one of the requirements for a patent is that it be a new invention that is not yet in the public domain. This strategy has been successfully used by giants such as IBM, and can be valuable for startups if they do not need the particular patent in their portfolio to attract investors.
In summary, actually defending every and each of your inventions is impossible. Startups do not have the money or bandwidth to do so. The best patent strategy will most likely be a combination of all three approaches above.
Know your market, your product, and your competitors. Be aggressive about the patents that will make or break your startup, and be smart about the rest. And always patent to create value, not merely protect it.
The right patent attorney can help you formulate your patent prosecution strategy and execute that strategy consistently. If you are looking for a patent attorney, check out LawTrades.
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