A patent is essential for a successful business
Patents are forms of intellectual property assets, so don’t think of patents as a cost but an insurance to protect your business. Patents give the owner the right to exclude others from making, using, selling or importing the invention. Patents are a way to legally claim ownership of an idea, invention or design.
A patent can last for 20 years depending on various factors. This means that if you have a patent on your product it doesn't mean that someone else won't be able to make something similar until 2028 (or later). However, having a patent does make it more difficult for other people to copy your invention as they would have to create their own version from scratch while designing around your patented technology. This process can take time and money — instead of simply reproducing what you've made without credit or compensation.
Patents are essential for investment
Patents will be essential for investment for many startups. Investors will want to have maximum protection for their investments. While they will want rapid traction, they will also look for patented technology and know that the investment is backed by a tangible IP asset and they can recoup their investment. Further, if your technology is patent-pending or patented, it means that you have the rights to your invention and can protect it from being copied or stolen by others.
Many investors such as medical device investors will not invest in companies without patents. This is because if a company cannot prove that its product is unique, then this makes it harder for them to attract investors who a business with a protective moat.
Patents allow a company to stay independent
Patents are a big part of any business, but they're especially important for tech founders. Patents give a startup the rights to its technology and keep it out of reach of competitors. Other companies might try to create similar products or even copy the product entirely; with a patent on your solution, you can protect the technology with great intellectual property.
In case you want to speed up growth through partnerships, licensing allows for more flexibility in terms of licensing fees and ownership: if someone wants to use your technology in exchange for royalties instead of paying upfront costs like buying equipment or paying for development time (which can cost thousands upon thousands), then licensing might be an option worth considering!
When it comes time to license your solution, patents also give you more options than other companies have when selling their own products—and these options may be essential if your goal is profit rather than investment value.
Patents give the company more options
The patent, then, gives you as the owner more options. You can commercialize the technology yourself or have others commercialize for you. If you hold a patent, you can license your technology in three ways:
- Exclusive licenses – You can grant one or more exclusive licenses to anyone who wants to use your technology.
- Non-exclusive Licenses - You can grant several non-exclusive licenses to anyone who wishes to use the technology in certain circumstances.
- No license - You can choose not to issue licenses at any time and still have full control over who, what, where, and how your product is used.
Patents protect your company from larger competitors
There are numerous instances of cases of larger companies accused of pilfering from startups. You can read about what happened to the photo app Phhhoto here.
Patents give you the legal right to use your invention. Patents also allow you to sue competitors who infringe on your patent rights by using your patented product or process without permission or compensation.
In addition to being a defensive strategy that protects new inventions from being stolen, patents can also serve as an offensive strategy: if someone else is infringing on one of your patented technologies by selling their own products with similar features and functionality, then you have the right to sue them for damages (and potentially force them out of business).
Tech Founders should patent their innovations
Patents are an essential part of any business. They allow investors to see that you are more than just a good idea. The fact that you cared and thought through the rigors of patenting, and your willingness to do so, shows them that their money is safe in your hands.
Further, patents protect against competitors who want to use ideas without paying for them first. Remember that patents and intellectual property provide insurance against this possibility. While no insurance is foolproof, having IP on your side will allow you to sleep better at night.
Finally, a patent gives your company more options: you can either sell the innovation outright or license it out as needed, depending on your needs and preferences at any given time throughout their lifespan as an organization. In this way, patents keep companies independent and when you get too big or too influential, it may be tempting for someone else to come along and buy out your patent-protected company. That is where the big paydays come for your patent investments.