Patents take an investment in time and money. Startups, bootstrapped enterprises and solo inventors may have questions about how the benefits outweigh the costs. Because of the stricter standards for winning patents for software compared to physical inventions, tech companies need expert guidance to obtain strong and valuable software patents.
There are four main reasons patents can add value to your company, both for long-term profits and to raise capital and enter partnerships.
Strong Defense for Effective Offense
One of their most obvious benefits of patents is that they keep competitors out of your market. When you obtain a patent, you win a 20-year monopoly on your inventions. If another company flirts too closely with your innovation, you can threaten or file enforcement litigation, either winning an injunction for marketing the tech or an award for damages. Many companies use their patents as leverage to get copycats to buy licenses, which can be a nice additional revenue stream.
If a competitor sees that your company holds the patent to technology it wants to market, it might decide that it’s easier to join you than beat you. Litigation is expensive. Having a patent application pending, or having a patent in your portfolio, could entice potential partners to the negotiating table for deals and joint ventures.
The truth is, in the short term, we don’t really write applications for the U.S. Patent Office; we write them for all the lawyer friends of all the business partners our clients want to attract.
The point is that we want them to think it will be easier to make a deal now than litigate down the road.
A Marketing Boost
Even if your invention may seem marginally qualified for a patent, it might be worth filing a provisional patent application for the short-term marketing boost. You can mention your pending application as you sell your product or gather testers for a beta launch.
For startups, a big focus is often raising capital. You want your pitch to stand out when you approach potential investors, and patents can help add value to your deck. A secured patent or pending patent application sends a strong signal about the potential strength of your technology, its marketability, and your ability to fend off the competition. It also shows the seriousness of the management team, illustrating that you have a handle on the legal aspects of your business.