Patents can be crucial assets in any company’s portfolio, and tech start-ups are no exception. Of course, there are a number of crucial considerations that start-ups need to consider before embarking on the lengthy and expensive process of filing for a patent. Patents are basically rights granted by the government to exclude others from making, selling, using, offering to sell, or importing anything claimed in the patent for a limited period of time. While those are technically the rights granted under the law, there are many more advantages associated with patent ownership. Patents can be licensed, serving as a source of revenue, and can also be assigned or transferred given that they are valuable assets. In addition, patents can function to position a company in their market, defending them against competitors, serving as a bargaining chip in negotiations or cross-licensing agreements, or even as an offensive mechanism to keep competitors out of a particular market. Patents can protect start-ups focused on capital-intensive work, such as companies specializing in the “hard science” areas of biotechnology, and though it varies from one fund to another, patent ownership can even attract venture capital funding.

That said, obtaining patents can be a prohibitively expensive business, so it is important for tech start-ups to formulate a cohesive strategy before moving forward with a patent application. Additionally, patents take years to obtain, so formulating a strategy is one of the first things a start-up should consider. Unlike large companies, tech start-ups cannot simply patent everything in sight; patents are expensive, and so are lawyers, so choices have to be made. Consequently, it is important to scrutinize the various aspects of the business, the available intellectual assets, and the long-term business trajectory of the company in order to determine the most advantageous technologies to protect. This process begins with the organization of business materials and documentation including business plans, company policies and procedures, investment proposals, white papers, presentations, product specifications, schematics, and software programs. Employees and consultants that work with the company should also be interviewed to uncover any additional assets that can be protected. Once this wealth of information has been collected, legal advice is required to begin the process of analyzing and determining whether patent protection, trade secret protection or some other form of intellectual property protection is the most suitable for each particular asset in question. Other considerations will include the importance of protection in foreign jurisdictions, employment and consulting contracts currently in place, joint ownership scenarios, third party rights, and prior art.

Once the appropriate technology has been identified, the type of patent must be considered. Start-ups concerned with legal costs will consider defensive patents first, which can ensure that valuable technologies will not be misappropriated with impunity. Also to be considered are provisional applications, which are cheaper and serve one-year placeholders, allowing the putative patent owner to later complete the application. Most importantly, consult a patent attorney before moving forward with an application. Application and filing fees to the USPTO are not refunded, and office actions resulting from poor application drafting can become time-consuming and expensive. As a result, it makes more sense to invest up front and formulate a cohesive strategy the right way.