Patents can protect the business idea from copying for a maximum of 20 years and are, therefore, a clear competitive advantage for startups. Especially founders in the high-tech sector who want to convince an investor should deal with the subject of patent protection.
Young companies that have applied for a patent on their invention are exciting for investors. However, there are a few things to consider when it comes to patents — both in terms of the application process and costs of application.
Criteria for patent protection
There are three criteria that a product must meet to have a realistic chance of patent protection:
- The novelty of the invention: The product may not belong to the current state of the art on the patent’s filing date. This also means that the invention has not yet been publicly presented or used for patent application.
- The inventive step: An inventive step is only given if it is not apparent to the “average person skilled in the art” in the respective field and exceeds their ability. In this case, one speaks of the so-called “inventive step”.
- Commercial applicability: An invention is commercially applicable if it can be used commercially in any field – in principle, it is about the practical use of the invention and whether a business model can be derived from it.
Patent protection can be fundamentally pursued with consultation and the representation of legal experts. In California, the PatentPC specializes in every domain that covers Intellectual Property. It means the legal matters involving patents, trademarks, trade secrets, and copyright cases.
The legal firm has broad services relevant to patent protection, filing trademarks, contesting unfair competition, protecting trade secrets, and the copyright law. Its diverse portfolio of clients allows the firm to represent clients varying in a wide array of business sectors.
Patent PC also professes a strong company culture and also deals with clients who operate on a stringent budget. Startups are required to file patents protecting intellectual properties and prototypes, which is the firm has a pool of clients ranging from many startups to the big players.
Scaling investments: For technology-oriented startups and medium-sized companies, patents are an essential starting point for starting a business, finding investors, or opening up a new market.
Ideally, innovative companies first patent the core development and then protect all purposes from calmly rolling up the global market. Patent law gives applicants several options for scaling the timing and amount of investment in property rights. It is usually advisable to proceed in stages and at the same time to select the scope of protection skillfully.
Disclose selectively: Companies should protect innovative technical processes and products very strategically. Inventors, founders, and patent experts have to plan precisely what is specifically described in a patent specification and thus disclosed to competitors – and what the startup would prefer to keep secret.
For products in which software plays a central role, it should be considered whether patent protection is only sought for the parts that ensure good, but not optimal, function. Only a subsystem is then disclosed to the competitors when they register. The real highlight, however, remains hidden from them.
Appropriate patenting: Certain technical developments, such as chemical compounds, can best be protected by so-called material protection. If this succeeds, startups can slow down competitors at almost every stage of the value chain. Building a patent thicket with which your products and any workaround solutions can be protected can be a worthwhile long-term strategy.
Protect according to standards: Patents are beneficial when they protect standardized products. Even if such standard-essential patents are subject to some restrictions in terms of enforcement, all standard users must pay license fees to the patent holders. Considerable income can be generated from a large number of users.
The ideas not taken into account in the standard and the patents based on them, on the other hand, are left empty. If standardization projects for innovative products are foreseeable, startups should closely coordinate their participation with patent granting for the products.
Companies in the mobile communications and e-mobility industries are pursuing this strategy, in some cases with great economic success. Negotiations are held in front of a standards institute, for example, which standardized plug shape should enable future electric fuel pumps.
Simultaneously, the participants in the standardization negotiations bring themselves into position with applications for property rights on various connector shapes and additional features.
Make the right choice: You can save a lot of money when choosing the countries in which an invention is protected. A subtlety of patent law also allows the country selected to be expanded gradually.
Startups with software inventions should also consider obtaining protection in the USA. There you will find not only a large software and investor market but also very patent-friendly conditions for your products.