The importance of patent prosecution strategies for technology startups

The importance of patent prosecution strategies for technology startups

The importance of patent prosecution strategies for technology startups

During the lifecycle of a technological startup, there are three important events. The first occurs when the entrepreneurs seek funding from angel investors or venture capitalists (VCs). The second stage occurs when the company releases its first product to the general market. The third stage occurs when the company tries to implement an exit strategy.

As the founder of a technology start-up, pending and/or issued patents are a valuable tangible asset that can help you persuade investors, customers, suppliers, competitors, potential acquirers, and underwriters that your technology is cutting-edge and valuable during these three critical stages.

Every technology startup should have a patent strategy. It’s a good idea to do so even if you don’t have financing yet, because pending patent applications can help you negotiate a higher valuation and possibly better financing terms. Patents can help you maintain your market position by preventing or even stopping future competitors from joining your industry.

Patents can prevent other companies from pursuing their own patents against you, or they can put you in a better strategic position if patent litigation occurs. Eventually, patents can be turned into real economic value by licensing, selling them outright, or asserting them in court.

Approaches for Establishing a Patent Portfolio

Any corporation has the option of keeping its inventions as trade secrets rather than exposing them publicly in patents. However, because most inventions can be reverse-engineered from the resulting products or services, patents are often the only effective means to prevent others from utilizing them. As a result, when a corporation intends to create a patent portfolio, it should consider the following guidelines:

Determine the important market space, as well as the direction in which the company and the market are heading. It is vital to determine the critical market sector that must be protected. It’s also important to figure out where the company, its competitors, and the market are going in the future. A professional patent attorney can construct the patent claims (which specify the ultimate patent rights) in such a way that they protect both existing and future market applications. 

Determine which countries are crucial to the organization’s growth. Each country has its own patent system, which necessitates the filing of a local patent application in order to be enforced. A patent application should be filed in any country where the invention is created, utilized, marketed, or imported, in general. While the corporation should concentrate on nations where its products or services have a huge customer base, filing applications in other countries can add value to the portfolio.

Having a system in place for identifying patentable inventions. The tradeoff between patent and trade secret protection should be considered in the decision. Almost every firm will be built on the foundation of new technology or products. One or more patented inventions will almost certainly underpin this technology or product. A patent lawyer should always be consulted to evaluate whether a company has developed patentable inventions.

Startups must continuously demonstrate their worth. They must establish themselves in the eyes of possible investors, customers and potential customers, and competitors. Patents, both issued and pending, can bring credibility and, in some cases, genuine monetary worth to a company at any stage. Developing a patent portfolio is a vital investment that most startups should undertake.


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