Patents

Posted on Posted in Investing, Mentoring, Technical

So, for many technology based startups with intellectual property, patents are an obvious route to go down. However it is not always the correct route and what you might think of as a good form of protection may actually achieve the opposite.

Let me explain why:

Patents are filed public documents that describe your intellectual property in full detail. Until they are granted, they are pending, which means that should a patent be granted, you can back date this to the filing date and use this to fight any infringements on your hard earned IP.

That’s all great, however, what you have done in filing a patent, is tell the world exactly what your secret sauce is. So what happens if your patent is refused? What happens if your patent is granted and a global corporation blatantly copies your patent and launches a competing product with a multi million pound marketing strategy along with a pricing model that blows your product or service out of the water.

Well of course they have done wrong and you have the law on your side. But the law costs money, lots of money, and they have plenty and you have none. They can outspend you by 1,000 to 1. More than that, they can force your legal bills to escalate with ramping costs of communication between your legal team and theirs. They can force you to spend your entire bank balance, company profits and your family home’s equity in a heart beat, and then what do you do?

Can you settle out of court, will they be amiable to that, will they have mercy? Who knows, you don’t!

Of course small companies have successfully defended their patents against large corporations in the past, but it is difficult and there are no guarantees.

There are other options:

You can file your IP with a solicitor having them notorise it. This gives you some defensible abilities, but they are much weaker than a patent.

Some types of IP and products are subject to copyright and that may be sufficient in many cases.

However, patents are by far the strongest form of protection for any intellectual property or invention, so must be the primary consideration. However bare in mind the main negative of the patent system is the public disclosure of the full workings of your invention to everybody including your competitors.

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