Yesterday I heard this conversation between a venture capitalist and a start-up company with an excellent idea.
VC: “It’s a crowded market with lots of competition. Do you have patent protection?”
Start-up: “No, not yet.”
VC: “But you have some pending patent applications?”
Start-up: “No, we wanted to get our product to market first then go back and maybe get a patent.”
The venture capitalist politely exited the conversation. Why? Did you ever see Ghostbusters? If you did, there’s a moment in it where Winston advises Ray that “When someone asks if you’re a god, you say YES!” I would advise innovative start-ups similarly. “When someone asks if you are seeking patent protection, you say YES!”
The VC manager bailed out of the conversation not because the start-up might fail, but because the the start-up didn’t have the foresight to start protecting its idea and creating the most valuable of assets: the patent. Why should a small company, start-up, or new business consider filing a at the very least a provisional patent application? Here are a few reasons.
(Before discussing the reasons why you should at least file a provisional application, take a gander over here if you want to know what a provisional patent application is.)
6 Reasons to File a Provisional Patent Application
(1) A patent application shows you’re innovative. Filing a patent application lets people know that you think your idea is so good that you want a patent on it. If you’re willing to bet on your innovation, someone else might be willing to do the same.
(2) A patent application creates an asset. The monopolistic rights that go along with a patent don’t exist until the patent grants but the application starts the process of getting a patent. The patent is a more valuable asset but the application is also an asset that will impress an investor or business partner.
(3) You can use PATENT PENDING. PATENT PENDING is a label that informs the world (clients, competitors, investors) that you appllied for patent protection. When someone sees this on your products, packaging, advertising, and marketing, it puts them on notice that you are pursuing a patent and if they are thinking of copying your idea, they must tread lightly.
(4) Your partners and investors will take comfort from seeing you invest in your own ideas. Filing an application shows that you raised or spent money and invested it in your invention. This inspires confidence in others.
(5) Filing an application is important because of the “first inventor to file” rule. The United States recently followed many other countries and became a “first to file” country, meaning that if two people invent something independently, the first of them to file their application at the patent office will receive the patent for it, regardless of who invented it first. Thus, filing your patent application is critical to insure someone else does not file for patent protection on your invention.
(6) A provisional application is an inexpensive way to buy yourself a year to vet your idea. If you decide to file a provisional patent application instead of a non-provisional patent application, you will make less of an investment to secure a patent application filing date for a year while you test your market. This savings can be spent on marketing, tooling, and other start-up expenses. At the end of the year, you can decide whether you should then file your nonprovisional application.
If you have questions, please contact me.
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