Every company that is inventing new products faces one all-important question: should you patent your idea? Unauthorized use of your business’s intellectual property can seriously undercut your profits, which is why many entrepreneurs believe they must patent any product they create. However, the issue isn’t always so cut and dry.
Startup environments are highly competitive, and with new technologies proliferating faster every year, you must protect your unique concepts. Without a strong intellectual property (IP) management strategy, you could jeopardize your company’s success. What’s the point of investing the funds to create a product that someone else can copy and release with few legal repercussions?
But IP management does not necessarily mean that patenting is the end-all solution. In fact, some entrepreneurs decide against applying for patents.
If that sounds like poor intellectual property management to you, consider the logic behind those decisions:
- Trade secrets may be leaked
Some inventors avoid the patent process entirely because they believe their ideas are so unique that they do not want to reveal the process or ingredients to anyone. Should a competitor learn what they are developing, they may steal the idea and release their own version, negating the original inventor’s impact. For example, Coca-Cola’s formula has been maintained as a highly guarded trade secret for more than 100 years.
Patent applications are published online, so competitors can easily discover what you are working on. You may decide it is simply not worth the risk to reveal your concepts, even for the sake of a patent.
- Patents can be costly and time-consuming
You could spend $20,000 or more and wait years before your patent is granted. Many entrepreneurs decide to invest their time and money in product development instead, aiming to create a good or service that can dominate the industry even without legal patent protection.
If you are keen to buy yourself some protection without investing in a years-long process, you can also apply for a provisional patent. This provides you 12 months of coverage, theoretically so you can file a full utility patent application. However, if you decide you do not want a full patent, you will have given yourself time to get the product to market competitively without sacrificing significant resources to do so.
- Patent applications may be denied
There is no guarantee that your investment toward obtaining a patent will pay off, because the patent office may deny your application. Before committing to the process, you and your attorney must conduct deep research into your concept and make sure it merits the effort required to secure a patent.
- There is no guarantee that someone will not steal your ideas
A granted patent cannot stop another individual or company from copying your ideas, and the burden to force them to cease production is on you. Even with an issued patent, you will need to hire lawyers to litigate, which requires a further investment of time and money and lost market share.
What’s the point in patenting?
Having addressed the drawbacks to patenting, it is important to note that patents are still highly valuable under the right circumstances. If your company is developing a cutting-edge new technology, you will want to protect the years of research and monetary investment that went into its development so that you can be rewarded through market share.
A good rule of thumb for determining whether you need a patent is to zero in on which element of your invention makes it unique. Patents are issued for products that are exceptionally innovative, novel, inventive, and/or non-obvious, and they apply mainly to certain functions of those products. So, if you have created a manufacturing machine with a functionality that has never been used before and has a potentially lucrative market for it, you want to patent it.
One of the benefits of applying for a patent is that you will receive feedback on whether your idea is truly unique or whether you’re simply one of many to have the same good idea. But you don’t necessarily need to go through an extensive and expensive patent process to learn that, as external reviewers specialize in researching the overall commercial potential of new ideas and inventions. They also conduct market research and create a SWOT analysis detailing your strengths, weaknesses, opportunities and threats.
The last thing you want to do is file a patent application that is all but certain to be rejected. Working with an expert external review team can help you avoid that misstep by providing a deep analysis of your idea and its patent prospects. Outside reviewers offer an objectivity you will never get in-house, and they can examine all aspects of your product and business plan.
Many companies benefit from patents, and your business may be among them. But you need to screen your ideas and pursue due diligence before rushing into a process that may not even suit your goals.
When you are unsure how to proceed, always remember to analyze first and apply for a patent (or not) only after you have given it the consideration it deserves.