When launching a startup, entrepreneurs have several decisions to make that may not have been covered in their business classes. Among them is whether or not to protect the company’s products by filing a patent application and, if so, when.
There is no one single answer to this question, as businesses and products differ greatly. But, as they say, imitation is the best form of flattery, so it stands to reason that your competitors will attempt to copy your innovation if at all possible.
Factors to Consider
For the sake of this article, we are going to assume that the product in question is patentable, or at least subject matter that is possible to patent. With that said, the decision to file rests on several factors, including anticipated market longevity, potential breadth of coverage, finances, long-term strategy and difficulty associated with reverse-engineering your product.
The cost of applying for a patent can vary greatly depending on the technology and the type of application. A provisional patent can range in cost from $3,000 – $10,000; a utility patent can range from $6,000 – $20,000.
Generally speaking, products with short shelf lives may not be worth patenting. Likewise, the value of patenting a product with a narrow scope of coverage can be minimal, at best. If your startup simply doesn’t have the money to spend on the patent process or the means to raise it, the question may answer itself.
Another consideration is whether the long-term strategy of the company necessitates driving value for a future acquisition or capital raise. If so, a patent always looks good to investors.
Lastly, if your product is difficult to reverse engineer, it may be beneficial to keep the product or the process of manufacturing the product as a trade secret and forego the patent process. If, on the other hand, the product or process can be copied rather easily, that tilts the scale in the direction of patenting.
When Should You File?
If, after considering these factors with your patent attorney, you determine that filing a patent application is in the best interest of your startup, the next step is deciding when to file. In the United States, inventors have a one-year grace period to file a patent application once they have disclosed their invention publicly (most other countries do not). So, if you anticipate needing protection outside of the territorial boundaries of the United States, you must file your application prior to disclosing it.
Additionally, the United States has recently joined the rest of the world by moving from a “first to invent” system to a “first inventor to file” system. So, if a third party independently invents a product similar to yours and files a patent application before you do, they may be able to prevent you from not only patenting your product, but also bringing it to market. As such, if you anticipate filing a patent application, it is best to do it sooner rather than later.
Photo Credit: Ed Summers via Flickr
Anthony (“T.J.”) DoVale is the managing partner of the Intellectual Property Group of FisherBroyles, LLP, a national law firm with offices in 11 major U.S. cities. T.J. concentrates his practice on the prosecution of patents in the mechanical and medtech arts, as well as drafting and negotiating license agreements pertaining to intellectual property issues.