Startup Patents, Are they Worth it?

Most startup founders consider whether a patent is right for them. Is the investment of time and money worth it in the end?

This article provides an overview of how to file a patent for a startup, including the benefits of filing a patent, the different types of patents available, the steps involved in filing a patent application and common mistakes to avoid. It also covers the criteria for determining patent eligibility, the time and costs associated with filing a patent application, and whether filing a patent is worth the investment for an early-stage startup.

Though this article should give you a basic understanding of patents, consulting with a knowledgeable patent attorney can help startups navigate the patenting process effectively and increase the chances of obtaining a valuable and enforceable patent.

Benefits of Filing a Patent for a Startup

Filing a patent can provide numerous benefits for your startup and help you succeed. Here are some of the most significant benefits:

• Protecting Your Idea. One reason to file a patent is to protect your innovative idea from being stolen. By securing a patent, you can prevent competitors from producing or selling products that infringe on your patent.
• Attracting Investors. Investors look for startups with unique and innovative ideas that have the potential to succeed in the market. Having a patented product or service can make your startup more attractive to investors since they understand that developing and securing patents takes time and resources. The right patents should increase your startup’s valuation.
• Licensing Opportunities. Securing a patent can also open up licensing opportunities, allowing you to generate revenue by licensing your product or technology to other companies.
• Competitive Advantage. Having a patented product or service gives you a significant competitive advantage over other companies in your industry. It allows you to differentiate yourself from competitors and establish yourself as an industry leader.

Types of Patents for Startups

Before filing a patent for your startup, it’s important to know the different types of patents available and which one is right for you. Here are the three types of patents that startups can consider:

1. Utility Patents. Utility patents cover new and useful processes, machines, articles of manufacture, compositions of matter, or any new and useful improvement thereof. They are the most common type of patent filed by startups because they provide broad protection for their inventions. Examples may include:

• A startup in the technology industry files a utility patent for a novel algorithm that improves data compression techniques, resulting in more efficient storage and transmission of digital information.
• A startup in the medical field files a utility patent for a new surgical instrument that enhances the precision and safety of a specific surgical procedure.
• A startup in the renewable energy sector files a utility patent for an innovative solar panel design that increases energy conversion efficiency and reduces manufacturing costs.

2. Design Patents. Design patents protect the unique appearance or ornamental design of an article of manufacture. They are ideal for startups that have developed innovative designs for their products. Examples include:

• A startup in the consumer electronics industry files a design patent for the unique and visually distinctive design of a new smartphone, focusing on its ornamental features, such as the shape, color and arrangement of buttons, and the overall aesthetic appearance.
• A startup in the fashion industry files a design patent for an original jewelry design, protecting the specific arrangement of gemstones and the overall aesthetic aspects of the piece.
• A startup in the automotive sector files a design patent for a novel vehicle grille design that sets it apart from existing designs and contributes to the overall visual appeal of the vehicle.

3. Plant Patents. Plant patents are granted to individuals or companies who have invented or discovered a new plant variety. This type of patent is suitable for startups in the agriculture industry that have developed new plant varieties through hybridization or genetic engineering. Examples include:

• A startup in the agricultural industry files a plant patent for a new variety of drought-resistant corn plant that exhibits improved yield and tolerance to water scarcity.
• A startup specializing in horticulture files a plant patent for a unique and distinct hybrid orchid variety that features specific characteristics, such as color, size and fragrance.
• A startup in the cannabis industry files a plant patent for a new strain of cannabis plant that exhibits unique medicinal properties and specific chemical compositions.

To ensure maximum protection and benefits, it’s important to choose the right type of patent based on your startup’s invention. Consulting with a patent attorney can help you determine which type of patent is best suited for your startup’s needs.

How to Determine if Your Startup’s Invention is Eligible for a Patent

When examining a patent application, the examining attorneys at the United States Patent and Trademark Office (USPTO) consider various criteria to determine whether or not to grant a patent. These criteria are assessed to ensure that the invention meets the legal requirements for patentability. Here are the main criteria used by USPTO examiners:

• Novelty. The invention must be new and not disclosed to the public before the filing date of the patent application. The examiner searches prior art, which includes existing patents, published materials and public knowledge to determine if the invention is novel. If the invention is already known or disclosed, it may lack novelty and be rejected.
• Non-Obviousness. The invention must also be non-obvious to a person skilled in the relevant field of technology. This means that the invention should not be an obvious combination or variation of existing knowledge or elements. The examiner evaluates the inventive step and considers whether the claimed invention would have been obvious at the time of filing to someone skilled in the field.
• Utility. The invention must have a useful and practical application. The examiner assesses whether the invention has a specific, credible and substantial utility. In general, the utility requirement is met if the invention is capable of providing a useful result or has a beneficial effect.
• Clarity. The patent application should provide a written description that sufficiently describes the invention, its features and how to practice it. The examiner verifies that the claims, which define the scope of the invention, are clear, supported by the written description, and not overly broad or vague.

USPTO examiners apply their expertise and judgment to assess the patentability of each application based on these criteria and the specifics of the invention presented in the application.

Provisional Patent

Before filing a patent application, it’s often smart to file a provisional patent application. A provisional patent application, often referred to as a “provisional patent,” is a type of patent application filed with the USPTO. It serves as a placeholder or a temporary measure to establish an early filing date for an invention. While it does not directly lead to a granted patent, it provides certain benefits and rights to the applicant.

Here are key points to understand about provisional patents:

• Purpose and Benefits. The primary purpose of a provisional patent application is to secure an early filing date for an invention. By filing a provisional patent, an inventor or applicant establishes a priority date, which can be crucial in the patenting process. It provides a 12-month period during which the inventor can further develop the invention, gather additional data and assess its commercial viability before deciding whether to pursue a non-provisional patent application.
• Simpler Filing Requirements. Provisional patent applications have more relaxed filing requirements compared to non-provisional patent applications. They do not require formal patent claims or a detailed formal examination. Instead, they require a written description of the invention, enabling disclosure of the invention in sufficient detail to demonstrate its novelty and potential utility.
• No Grant of Patent Rights. A provisional patent application does not result in the grant of patent rights. It is not examined by the USPTO for patentability or enforceability. Instead, it establishes a filing date and allows the inventor to use the term “patent pending” while the non-provisional patent application is being prepared and filed.
• Conversion to Non-Provisional Application. To seek patent protection, a non-provisional patent application must be filed within 12 months of the provisional filing date. The non-provisional application claims priority to the provisional application and provides the detailed patent claims, formal examination, and potential for patent grant. The non-provisional application must include all relevant information and improvements disclosed in the provisional application.
• Limited Term. Provisional patents do not have a separate term of protection. The 20-year patent term begins when the non-provisional application is filed. The provisional application itself does not extend the term of patent protection.

It’s important to consult with a qualified patent attorney when considering filing a provisional patent application. They can provide guidance on the best strategy for protecting your invention, including whether a provisional patent application is appropriate and how to proceed with a subsequent non-provisional application.

Steps Involved in Filing a Patent Application

The patent filing process for a startup typically involves several key steps. Here’s an overview of the process:

1. Conduct a Patent Search. Before proceeding with a patent application, it’s advisable to conduct a thorough patent search to determine if your invention is novel and non-obvious. This search helps you assess the existing prior art and evaluate the chances of obtaining a patent.
2. Documenting Your Invention. Create a detailed and comprehensive description of your invention, including how it works, its features and any unique aspects. This documentation should be clear, concise and sufficiently detailed to enable someone skilled in the field to reproduce the invention based on the description.
3. Consult with a Patent Attorney. Engage a qualified patent attorney. They can provide legal guidance, assist in preparing the patent application and help navigate the complex patent process.
4. Drafting the Patent Application. Working closely with your patent attorney, prepare a formal patent application. The application typically includes a written description of the invention, claims that define the scope of protection sought, and any necessary drawings or diagrams. It’s important to ensure that the application meets the specific requirements set by the patent office where you plan to file.
5. Filing the Patent Application. Once the patent application is drafted and reviewed, it is filed with the appropriate patent office. In the United States, this is the USPTO. The filing includes submitting the necessary forms, paying the required fees and providing all the supporting documentation.
6. Patent Examination. After filing, the patent application undergoes a review process by the patent office. This process involves a thorough examination of the application, including assessing the novelty, non-obviousness and usefulness of the invention. The patent examiner may issue office actions, which are official communications outlining any objections, rejections or requests for amendments.
7. Responding to Office Actions. If the patent examiner raises objections or rejections in an office action, you have the opportunity to respond and address these concerns. Working with your patent attorney or agent, you can provide arguments, evidence, and amendments to overcome the examiner’s objections and convince them of the patentability of your invention.
8. Patent Grant or Rejection. If the patent office determines that your invention meets the patentability criteria, they will issue a patent grant. The granted patent provides exclusive rights to your invention for a limited period. However, if the examiner maintains objections or determines that the invention does not meet the requirements, they may issue a final rejection. At this stage, you can consider filing an appeal or making further amendments to overcome the rejection.

The patent filing process can be complex and time-consuming, often taking multiple years to complete. Working with a knowledgeable patent attorney or agent is highly recommended to navigate the process effectively and increase the chances of obtaining a valuable patent for your startup’s invention.

Common Mistakes to Avoid When Filing a Patent Application

When filing for a patent, startups can make several common mistakes that can potentially hinder the patenting process or limit the effectiveness of their patent protection. Here are some of the common mistakes startups should be mindful of:

• Insufficient Prior Art Search. Failing to conduct a comprehensive prior art search can lead to the submission of a patent application for an invention that lacks novelty. Conducting a thorough search helps identify existing patents, published materials or public knowledge that may impact the patentability of the invention. Without a proper prior art search, the startup may waste time and resources on an application that is unlikely to be granted.
• Lack of Patent Strategy. Startups may overlook the importance of developing a solid patent strategy aligned with their business goals. This includes determining which aspects of their technology or innovation should be protected, considering the timing of filing applications, and assessing the potential cost and benefits of obtaining patents in different jurisdictions. A well-defined patent strategy can help prioritize resources and maximize the value of patent protection.
• Insufficient Description. Inadequate disclosure of the invention in the patent application can lead to problems during the examination process. Startups may fail to provide a clear and detailed description of their invention, including how it works and how to practice it. Insufficient disclosure can result in rejection or narrow scope of claims, and limit the effectiveness of the patent.
• Overly Broad or Vague Claims. Drafting patent claims that are overly broad, ambiguous or too generic can make the application vulnerable to rejection. It is important to draft claims that are clear, precise and well-supported by the description. Narrowing down the scope of the claims to cover the specific inventive features can improve the chances of obtaining meaningful patent protection.
• Inadequate Patent Drafting. Startups without proper expertise may draft patent applications that fail to meet the specific requirements of patent law and regulations. Patent applications should be drafted with attention to detail, including proper use of terminology, accurate drawings or diagrams, and adherence to the format and guidelines of the patent office. Engaging a qualified patent attorney or agent can help avoid errors and improve the quality of the application.
• Lack of Responsiveness. During the examination process, the patent examiner may issue office actions requesting additional information or changes to your application. It’s crucial to respond promptly and thoroughly to these requests to ensure that your application moves forward smoothly.
• Ignoring Deadlines and Maintenance Fees. Patents require maintenance fees to be paid at specific intervals to keep them in force. Startups may overlook these deadlines or fail to allocate necessary funds for maintenance fees, resulting in the unintended abandonment of their patents. It is important to keep track of these deadlines and ensure compliance with the required maintenance fee payments.

To mitigate these mistakes, startups should consider working with experienced patent attorneys. They can provide guidance, help avoid common pitfalls and assist in navigating the patenting process effectively.

Patent Application Timing

The duration of the patent application process can vary depending on several factors, including the complexity of your invention, the backlog of applications at the government agency and whether any office actions are issued. In general, it can take several years for a patent application to be examined and granted.

According to data from the USPTO, it takes an average of 24 months for a patent application to be initially examined. However, this timeline can vary significantly, depending on the type of patent being filed and other factors.

If you receive an office action from the patent examiner requesting additional information or changes to your application, it can add several months or even years to the examination process. Respond promptly and thoroughly to these requests to keep your application moving forward.

Once your patent is granted, it can provide protection for up to 20 years from the date of filing. However, you will need to pay maintenance fees at regular intervals throughout the life of your patent to keep it in force.

Be patient during the patent application process, and work closely with an experienced attorney or agent who can guide you through each step. By taking a thorough approach and responding promptly to any requests or issues that arise, you can increase your chances of successfully obtaining a strong and enforceable patent for your startup’s innovative technology or product.

Costs Associated with Filing a Patent Application

Filing a patent application can be expensive. The total cost for a startup to file a patent can range from $5,000 for a relatively simple and straightforward application to $60,000 or more for complex inventions or international filings. Other factors include the complexity of the invention, the jurisdiction(s) in which protection is sought, and the services provided by patent attorneys or agents.

The following estimates are general guidelines, and costs can vary widely. Here’s a breakdown of the typical fees involved:

• Filing Fees. Filing fees are payable to the patent office when submitting a patent application. The USPTO filing fees for a utility patent application range from a few hundred dollars to over a thousand dollars, depending on the applicant’s status and the complexity of the application.
• Patent Attorney. You should definitely hire a patent attorney to assist with drafting and prosecuting the patent application. The fees charged by attorneys or agents vary based on factors such as their experience, expertise and location. Fees can be structured as hourly rates, fixed fees or a combination of both. The cost of attorney fees for preparing and filing a patent application can range from a few thousand dollars to tens of thousands of dollars or more, depending on the complexity of the invention and the level of service provided.
• Prior Art Search and Analysis. Conducting a prior art search is essential to assess the novelty and non-obviousness of the invention. The cost for a professional prior art search can vary based on the scope of the search and the expertise of the search provider. Generally, a professional prior art search can cost a few hundred to a few thousand dollars.
• Office Action Responses. After filing, the patent office may issue office actions, which require responses to address objections or rejections. Preparing and filing responses to office actions often require the expertise of a patent attorney. The cost for each office action response can vary depending on the complexity of the issues raised by the examiner and the time required for preparing a comprehensive response.

These costs are primarily associated with the patent application filing and prosecution process. Other costs may arise during the lifetime of the patent, such as maintenance fees, international filings and potential litigation expenses. Startups should carefully budget for patent-related expenses and consult with patent attorneys or agents to get a more accurate estimate based on their specific situation and needs.

Worth the Investment?

Deciding whether it’s worth the time, money, and legal fees for an early stage startup to file for a patent depends on various factors and the specific circumstances of the startup. Though the benefits of filing a patent have been discussed above, startups consider the following:

• Cost and Time. The patenting process can be expensive and time-consuming, especially for startups with limited resources. Costs include attorney fees, filing fees and maintenance fees over the patent’s lifetime. The process can also take several years, and there’s no guarantee of receiving a granted patent. It’s not uncommon for a startup to sink significant resources into the patent and have nothing to show for it.
• Limited Geographic Coverage. Patents are jurisdiction-specific, requiring separate filings in each country or region where protection is desired. This can significantly increase costs, making it challenging for startups with limited budgets to pursue global patent protection.
• Disclosure of Invention. When filing a patent application, you disclose technical details of your invention. This information becomes publicly available, potentially enabling competitors to design around your invention or develop similar technologies. Startups operating in rapidly evolving industries may prefer to keep their innovations as trade secrets to maintain a competitive edge.
• Uncertain Commercial Viability. Filing for a patent does not guarantee commercial success. Even with patent protection, the success of a startup depends on various factors, including market demand, competition, marketing and execution. Allocating resources toward product development, marketing or other business aspects may yield a higher return on investment than pursuing patent protection.

Ultimately, the decision to file for a patent should be based on a thorough evaluation of the specific situation, the competitive landscape, the market potential of the innovation and the available resources. Consulting with a patent attorney can provide valuable insights and help startups make an informed decision based on their unique circumstances.

Execution Not Patents

The real key to success in a startup is often more likely attributed to effective execution of an idea, not the protection of an idea through a patent. Here’s an explanation of why execution plays a crucial role:

• Market Relevance. While patents can provide a level of protection and exclusivity, success ultimately depends on addressing real market needs and delivering value to customers. The ability to understand customer demands, develop a compelling product or service, and effectively market and sell it to the target audience is paramount. Execution focuses on building a strong product-market fit, establishing a competitive advantage and creating customer loyalty.
• Speed and Agility. Startups operate in dynamic and rapidly evolving environments. Speed and agility in adapting to market changes, customer feedback, and emerging trends are critical for survival and growth. Successful startups efficiently translate ideas into action, iterating on products or services based on market feedback, and quickly seizing opportunities as they arise.
• Business Model Innovation. Execution involves developing and refining a sustainable and scalable business model that allows the startup to generate revenue and achieve profitability. A strong business model encompasses factors such as revenue streams, cost structure, customer acquisition strategies, distribution channels and partnerships. The ability to execute a well-defined and viable business model is often more influential in a startup’s success than patent protection alone.
• Competitive Advantage. While patents can provide temporary protection, they may not guarantee long-term competitive advantage. Competitors can design around patents, develop alternative solutions or enter the market with differentiated offerings. Focusing on operational efficiency, customer experience, brand building, strategic partnerships and continuous innovation are often more likely to create sustainable competitive advantages that go beyond the protection provided by patents.

While patents can provide certain advantages, they are just one piece of the puzzle. Startups that excel in execution by understanding their customers, delivering value, adapting to the market, building a strong business model and executing their strategies effectively have a higher chance of success. Ultimately, it is the combination of a strong execution plan, a compelling value proposition, and a well-executed business strategy that sets startups apart and drives their success.

In conclusion, filing a patent for a startup can be a complex and expensive process, but it can also provide valuable protection and exclusivity for innovative technology or products. Startups should carefully evaluate the potential benefits and costs of filing for a patent, taking into account their unique circumstances and business goals. While patents can provide a level of protection, a strong execution plan that focuses on customers, value creation and business model innovation is often more critical for long-term success. Consulting with a knowledgeable patent attorney can help startups navigate the patenting process effectively, and increase the chances of obtaining a valuable and enforceable patent.