A lot of entrepreneurs get really excited when it comes down to patents as a way to protect their business from potential competitors. Some investors consider patents a must and others see it as a value add.
My concern here is that to obtain a patent takes years and thousands of dollars in legal fees. From your experience, is a patent really worth it? What industries should really have one?
Look forward to everyone‘s responses :)
Lester I agree a patent is a monopoly IF YOU CAN KEEP IT. That is the catch, if you can keep it because there are many ways of defeating a patent. On the other hand investors look at patents as providing some security. Thus both the product and the patent need to be of such high value that you can pay to defend it and get investors to join in its defence or of such low value that no one will bother.
No, patents are a way to support lawyers and not your business goals. It is true that some people in the USA believe they have some value but in a practical sense they do not. It just depends on how sophisticated the people looking to invest in your company are. If they know something about patents they should just yawn when you mention it. You do not want to be in a position to defend your patents against a patent infringer...it is a fool's bet to spend the time and money to protect it.
I have a patent that is clearly infringed and I asked other business owners about their experience defending their patents. No-one publically or privately said it worked out for them. Waste of time and money that could have been spent on accelerating your business. Again, patents are a form of lawyer welfare (my girlfriend is a lawyer).
Go fast and gain market traction then have a big brother buy you out. This is the way you win.
Andrey; there are several threads on this subject already here on CFL. search the site. The short answer is that it's impossible to know (you or anyone else) if obtaining a patent will be "worth" it. You will never know until some event happens: you don't get one and some competitor sues you for infringement and you wish you had one, you get one and 20 years later you've paid $xxx,xxx dollars and received $0 value and you wish you never spent a dime, you get one and some potential infringer pays you more than you invested and you are happy, etc. I, personally have found my patents to be valuable. I was quite early in what turned out to be a very large market with big, well funded players, but it could have turned out to be a compete waste of time and money. I have quite a bit of personal experience with patents (i am not a patent attorney) and I will likely file patents for future projects, but it is not a given and I look at each project individually before deciding. I'm not trying to duck you question. It truly is impossible for anyone to tell you with any certainty if spending your time and $$ now on patents will be "worth" it down the road. One thing you can count on is if you never play you will never win. If you are in the biotech or pharma or medical devices industries patents are common practice. The investments are huge and the potential payoffs bigger so hedging ones bets with patents makes sense. But even the largest biotechs don't know in advance if their patents will be valuable. If you believe you have a truly unique product and a large, proven market AND you believe your idea is patentable then it makes sense to carefully weigh the best use of available funds. If you just want a patent or pending patent for marketing purposes then you have to weigh the marketing value VS costs, but the patent itself (if you ever get one) is unlikely to be valuable. Patents are like any other investment - there are costs and risks and the results vary widely.
A patent gives you a monopoly on whatever it is that is patented. It is up to the patent holder to decide the value. Sometimes it is a defensive action to protect some other line of business and other times it is monetised to generate the desired revenue for the life of the patent.
Many patents are issued for 'improvements' so it is a question of how it fits into your business plan. Someone else can do an improvement on your patent and get a subsequent patent creating a strategic issue in what is patented as well as where and how the patent is enforced.
Best way to protect your new business? Create and keep lotsa cash customers. Period.
Patent protection is often critical for a startup to maintain a hold on a slice of the market. Having the designation "patent pending" is also valuable when a company is about to launch their product or platform. However, the value of a patent and the potential scope of protection depends on the specific technology and the proximity of the prior art in that field.
It is impossible to generalize about whether applying for a patent is worth-while, without knowing all of the specific underlying factors. However, a company does not have to wait until the patent issues to use it as a marketing and licensing tool. Its very existence and your ability to show the application off to potential investors and customers is valuable. It also acts as a scare-crow, once it is publish to ward off potential infringers.
So, yes patents are worth while, in nearly all industries for both their marketing and enforcement potential.
Depends on the industry (market). Does Uber have one? I doubt it. But virtually all healthcare technologies and semiconductor companies do. Regardless of the industry, a patent is seen as adding value. And one can manage the patent filing costs.
Some investors and the patent lawyers view patents as barriers to entry. And I notice that foreign investors quickly ask about the IP. However, even a so-called patent doesn't mean that the technology might work. Theranos had many such patents but when the product rolled out from conception to reality, the product didn't work. And it is not first time I have witnessed that. No better validation of a product than revenues.
A.L. It is waste of time. The best way is to get to the market as fast as possible