For many startups, particular when first setting out, obtaining a patent on their company’s products or processes seems like an unnecessary expense when there are far more pressing needs, such as manufacturing, labor, or advertising and marketing. However, there are reasons why you may want to consider initiating the patenting process once your business has gotten the ball rolling.
The first reason for considering patents are the potential time constraints. There are often time limitations on when you must file a patent application once you’ve begun to publicize or commercially exploit an invention. The America Invents Act, passed last year, has also changed the patent filing system from a “first to invent” to a “first to file” system — a competitor can beat your business to the Patent Office with a substantially similar invention, even if your company was the first to invent it. Furthermore, it can take up to 5 or 6 years for a patent application to be approved, so the sooner an application is filed, the sooner your company may be able to obtain an enforceable patent.
A second reason for obtaining a patent is to defend your company against competitors’ litigation. Competitors with a colorable claim that your company is infringing on their patents can use the litigation process to drive your company out of business, either through the costs of litigation or by obtaining injunctions against your company. Even tech giants such as Yahoo, Google, Microsoft, Apple, and Facebook are locked in patent battles with each other and with so-called “patent troll” companies. And while a small start-up only a year or two into business most likely isn’t on the radar of large competitors or patent trolls, the goal of most start-ups is to become the next thing; even Facebook was at one point run out of a Harvard dormitory, and ultimately to defend itself it had to spend billions to acquire patent portfolios.