Posts Tagged: "Startups"

There are many examples of patents that had virtually no value because the claims were undetectable, unenforceable, or ridiculously narrow. In the process of getting a worthless patent — a bad patent, the company gave up their complete roadmap for how to manufacture and use their product. These bad patents are not just a waste of money, but their competitive advantage is eviscerated by disclosing everything they know. The bottom line: Some patent applications can be very damaging to a startup company.

The best patents are those that multiply an investment and actually generate money on their own… Standards essential patents are the holy grail of patents in today’s business landscape. Most startups are focused on getting a product to market quickly, getting validation, and starting a revenue stream. Once there, the startups begin to scale. If there is any chance that a startup’s technology – even a piece of it – could be incorporated into an industry standard, the patent needs to be investment-grade. In these situations, multiple patents would also be a good investment.

The first patent is typically filed prior to entering the market. This prophetic patent might have several different ways a product may be designed and capture a couple different ways the product may go to market. The purpose of the first patent application is to clear some space so that the company can keep competitors away. This patent application is done with the highest degree of uncertainty about both the technology and the market. It is critical to note that not only is the entrepreneur just beginning the journey at this point, but so is the patent attorney. Neither player knows which elements of the invention will turn out to be important.