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Start-ups and patent protection

Rockefeller Habits by Verne Harnish
January 31, 2017
Connecting your company with the right people
February 7, 2017
As a tech start-up you face many new challenges. Deciding whether or not to file a patent is probably one of them. Can you protect your technology? Should you protect it? And are there specific strategies advisable for start-ups? This article is aimed at giving you a better understanding about the do's and don'ts regarding patent protection.

Many start-ups are highly technology-driven. A pitfall you might run into is to start developing a technology towards a perceived business opportunity only to find out later that the market is not as interested as you expected and hoped for. As Steve Blank put it: "In a start-up, no business plan survives first contact with customers".

For this reason it is highly encouraged to test your assumptions and "get out of the building". Get in contact with potential customers as early as possible in order to find out what they really want and where your opportunities are. Developing a technology only to find out later that you ended up with a product or service that nobody wants is costly in terms of both time and money.

But beware since new pitfalls may arise when you are going to validate your assumptions outside your company. After all, once an invention is publicly disclosed, it is not possible to protect it anymore via a patent in most countries.

Fortunately, it is often possible to validate your early assumptions without the need to disclose your technical solution or with the use of a non-disclosure agreement. If this is not possible in your case, you will have to consider filing a patent application before you publically disclose your invention. Additionally, even if you can keep your invention confidential initially, a time will come when you will have to publicly disclose your invention.

Why invest in a patent?

Most people think about patents only as a defensive measure and forget about other benefits. Of course, obtaining a monopoly may be very valuable, especially for a start-up that is still highly dependent on one single product or service.

Having your patents secured is also often a prerequisite for obtaining financing as an investor often wants a security for his or her investment. Therefore, you may end up in a difficult situation. On the one hand, the financial resources of your start-up are still limited and filing a patent application costs money. On the other hand, having a patent application will often help in persuading investors to invest in your company.

Provisional applications

On the internet you may find many articles discussing (often US) provisional patent applications as a supposedly cheap and easy way of protecting your invention. Unfortunately, provisional applications have serious drawbacks and may even be counterproductive for obtaining valuable patent protection.

Making a provisional application involves filing a description of your invention to secure an official filing date without starting grant proceedings for a patent. In some countries, there is even no need to pay any official fees. Once you have obtained an official filing date, you are granted a one year period, the “priority year”, to decide on whether to file a regular patent application. However, if no follow up patent application is filed within the priority year, no patent protection is obtained.

At first sight a provisional application may seem a good instrument for securing an official filing date while postponing costs for a regular patent application. However, provisional applications have serious drawbacks. First of all, the early filing date can only be used for the subject matter contained in the “first filing”, i.e. the provisional application. For any subject matter that you add later in the regular follow up filing, the later date of the follow up filing will be decisive for assessing patentability. Additionally, a technical description of the invention written by yourself for use as a provisional application is often too limited to obtain a useful patent. Furthermore, broadening the scope of protection after the application has been filed is often not possible. Any generalisation of your technical description will automatically mean that subject-matter is added. As a result, you will obtain a new filing date for all added subject matter which is detrimental if you have disclosed your invention in the meantime. This is often the case, as the reason for filing your provisional application was very likely the wish to secure a filing date before a disclosure. The end result may be that no useful patent protection is obtained at all.

Another disadvantage associated with a provisional application is the absence of an official search report within the priority year. Such a search report provides you with valuable insights in the patentability of your invention, helping you to decide whether to invest in international patent procedures at the end of the priority year.

Paris Dakar

The famous Paris Dakar rally is not only a suitable metaphor for your adventure as a start-up. Securing your innovations via a patent procedure has analogies with a Paris Dakar rally as well: in the beginning, the roads are still passable and predictable, but at some point you will face challenges and have to rely on what you have on board of your vehicle. Just as you would not start your Paris Dakar adventure with an amateur built car, you need to also make sure that your “first filing” is equipped with all you need for your patent adventure from the start! A patent attorney has the skills required to optimally prepare your “first filing” so that you can obtain the broadest scope of protection achievable.

Conclusion

In order to test the assumptions of your business plan, get in contact with potential customers as soon as possible. Take care to prevent public disclosure of your invention, and if this cannot be avoided, consider whether or not to file a patent before any public disclosure. If you decide to pursue patent protection, consult a professional for advice and make sure that you start your patent adventure with a well equipped first filing!

Contribution: Raimond Haan