Hillel Fuld, in his recent blog article “The Most Outrageous Questions Startup Founders Get Asked by Friends/Family” on his technmarketing.com blog,
tells startups not to spend time and resources to patent their ideas. As an Israeli patent attorney, I find this advice surprising.
Patenting certainly can be an expensive process and can require a significant time investment. But to brush patents off due to their costs is very short-sighted. When you start your company, do you sign your employees on employment agreements and your contractors on contractor agreements? Do you write a founder’s agreement, to handle the arrangements among the founders? In other situations - do you buy insurance on your car? All of these prepare you for potential future situations, just as patents do.
Do you intend to build a company that will last for many years? Do you expect that your company will have many follow-on products? For a company whose product lifecycle is less than 5 years, a patent might not be useful, as the product will no longer be sold by the time the patent issues. However, most companies generate other products, many of which expand on the product ideas with which the company started. If the initial product wasn’t patented, then other people and other companies can freely use the ideas of the initial product and can build their own follow-on products. Is this acceptable to you? Is it acceptable to the company’s board of directors? If so, then maybe you don’t need to file patents.
Do you want to interest investors in your company? Many of them require patent applications. Why? For 2 reasons: because the patents and other intellectual property documents help define the “property” of the company and because that property will be available to sell if the company becomes bankrupt or needs to be closed down, an all-too-possible scenario for a startup. With the well-defined intellectual property, the investor has a way to recoup some of her losses.
If the company has no innovative ideas, which is often the case for companies making “me too” products or those providing services using existing products, then there may not be anything worth patenting. But any startup bringing a new kind of product to market probably has at least one very innovative idea. Finding some way to patent it would seem prudent, at the very least.