Why start-up companies should consider the benefits of patenting
Published April 7, 2021
Still somewhat misunderstood, patents can be a powerful tool to help start-up companies move to the next level. Given that start-ups are just ‘’starting’’ they can rarely offer immediate value for potential investors. Patents are one way where a start-up company can ‘’level’’ the playing field against established competitors.
First off, to overcome a common misconception, patents are not a right to manufacture but rather a right to prevent others from using. This means that obtaining a patent on a certain technology is not a guarantee of risk-free product launch.
When deciding to file a patent application, the applicant should have a clear understanding on how the patent application will fit with the business goals of the company. It cannot be stressed enough that patents are one of the many facets of a business and it is critical for business owners to understand how they can derive the maximum value out of their patent portfolio.
It is best to discuss with a patent agent in detail the research goals of the company as well as its business goals and timelines. Once a patent agent has this information, a patenting strategy outline can be devised to achieve the goals of the company as well as manage the expectations of the executives. Depending on the technology being developed, a patent agent will be a in good position to advise on whether something is patentable, the timeline to obtain a patent in various jurisdictions as well as, in some cases, the likelihood of actually securing patent rights.
Given the fact that many start-up companies derive a substantial amount of their value from patents and other intellectual property, it is of the utmost importance that a proper assessment of the patent landscape (existing or expired patent rights known as "prior art") be done so as to not waste valuable time venturing down a previously traveled road. The company can attempt this exercise, should it feel sufficiently knowledgeable and comfortable to do so as they are, after all, the experts in the field. However, patent agents can provide additional value during this phase. Using an agent to build a library of knowledge (commonly referred to as prior art) can be extremely helpful to both the agent and the company for current projects, for future reference, and in some cases, to guide the direction of the research.
A good relationship between a company and its agent allows for faster decision-making and more informed advice, a ‘win-win’ on both sides. The library of relevant knowledge is but one example of such synergistic relationship.
When an invention can be reversed engineered or determined through scientific analysis it is important to attempt to secure patent rights in order to maintain monopoly on the invention. When something cannot be reversed engineered or otherwise determined through other methods, then comes the choice a company faces between patenting the technology or keeping it as a trade secret. More on that on the next blog.
Whether you are a new or early-stage looking for more information on patents or other intellectual property, please reach out to the author, Charles Pigeon, or a member of our Intellectual Property team.
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