Is Filing A Patent Application for Startup, A Smart Move?


Filing A Patent Application for Startup : Startups are newly established businesses that may or may not have a good amount of money in their account to make huge investments. While some already have their investment plans ready to file a patent application for their unique invention (any sort), others take their foot back from the fear of wasting money for getting a patent. Some might also fear that they might not get the patent granted due to lack of efforts, time, or investments. The fear of rejection from the grant of patent is obvious, as the amount required to be invested for getting a patent done, is much more than required for getting a trademark or any industrial design rights.

But, taking a risk in terms of investment and efforts is worth. The following are the benefits of Filing A Patent Application for Startup:

  • The startup can come into list of those business firms who has their own and unique feature patented, with the help of which it can set its market standard.
  • Patent can help the startup to market out its name on the basis of that patented product, which will create competitiveness among other startups.
  • Patent can help startups to claim higher prices for their patented products than the genuine ones, since the cost of getting a patent is much more than that.
  • Even with the tag of “patent pending”, a startup can earn a lot of profits at its patented products, since the tag is self-explanatory for inculcating significant R&D efforts.
  • Patent can even mitigate litigation risks from competitors.
  • Startups can even seek a lot of attention from investors to gain equity finance, for further expansion of the startup.

For a startup, it is very important to implement the right patent filing strategy to bear minimum amount of loses. Here’re the four major strategies that startups generally follow to perform in a balanced way and survive in the market.

  1. Offensive patent filing strategy: The basic focus is to stop all other competitors in the market from using the same technologies, and at the same time, to generate royalties by enforcement of patent rights. Such type of creation of NO sign for all the available competitors is only possible when, all the possibilities of uniqueness associated with the same technology are covered for the same startup, so that nothing is left for anyone to earn. Since this approach covers maximum possibilities, the cost of investment to be made, is maximum. This strategy can only be followed by well-established big firms, such as IBM, Microsoft, etc. And this generates maximum amount of profits to the firm, as compared to the rest strategies.
  2. Defensive patent filing strategy: The basic focus is to take optimum amount of benefits by using those innovations, ignoring all sorts of risks from the competitors. This can be done for any possible case, such as saving the patent against future infringement lawsuits, for negotiating terms and claims on mutual basis, or for earing profits by selling the patents, offering bargain. Since this goes on in a defensive mode, where the firms ignores the damages and only focusses on the profits generated through patent, the cost is slightly low. And, a very few firms opt for this strategy; the number of opportunities of generating profits are less, as well.
  3. Defensive publication/disclosure: The focus is on preventing third parties from obtaining a patent on that technology. This is done through disclosing a description and/or drawing of the product, apparatus or method to bring in front of the public. Since this does not involve much formal paper works, it is much cheaper, making it a good choice for startups.
  4. Amalgamation strategy: All of the above three strategies can be clubbed together, but the chances must not be taken by smaller or startup firms, since it involves a huge risk.

There are two more options, if any firm does not want to use any of these above mentioned strategies, and still wants to secure the products or services without getting it patented. Let’s know about them quickly.

  1. By keeping trade secrets: This can be simply done by keeping the information confidential, and keeping it far away from the reach of public. One advantage of using this is that firm doesn’t need to pay any cost for anything and it can keep its secrets forever, until it wants; this fails the necessity of patenting since patent gets expired after 20 years, after which the firm needs to renew it every time, it wants it to be reserved in their name. A very profound example of this is the Google Search Algorithm.

But the only drawback in this approach is that if another competitor firm gets the idea about the approach, it can apply for its patent, and the original firm will lose all the authority over its own idea.

  1. By implementing registered design: Companies involved in the development of UX/UI in Singapore, are required to be protected as registered designs, and not by patenting. While in US, these are referred as design patents, which cover only the appearance and shape of the articles. Using this, GUIs gets the same protection like the way invention gets it through patent.

So, if it’s about startup, then one must not even take 1% of risk. Judging the right approach or strategy can lead your startup to success, while neglecting to give attention towards the right approach can pile up big losses. Thus one must survey and identify the right approach, as early as possible.

Also Read,

Patent Strategies for Start-Ups

7 Mistakes Start-ups make When Filing Patents