As stated outright or implied many times on Starting It Up, a startup’s intellectual property can sometimes be the basis for their entire business model, or even existence in some cases. What steps then, should a founder take to protect his interests in his intellectual property?
Option 1: The full patent
If applicable, many people’s first instinct is to push for a full patent. A patent gives the owner a right to exclude others from using or emulating the subject of the patent.
Undoubtedly, this provides the most protection and is the best safeguard for your intellectual property. This is probably the optimal strategy for a founder that (1) isn’t worried about legal fees, or (2) isn’t pressed for time, as full patents can generally cost anywhere from $8-15k and take on average 2-4 years to process to completion. As a practical matter, only these types of founders will ultimately find the full patent useful, as only they will have the funds to commence legal action against an infringer.
However, for the 99% of founders that are concerned with cash flow management, a cost-effective solution is needed.
Option 2: Enter the strategic provisional patent
A provisional patent is best thought of as a placeholder for a full patent that provides protection for a period of one year. It’s a filing with the US Patent and Trademark Office (USPTO) that establishes the date of your invention, holds your right to exclude for the year, and can be converted to a full patent later.
A provisional patent’s corresponding figures to a full patent’s $8-15k and 2-4 years: a $130 filing fee and mere days to process. Not bad, considering you still get a year’s worth of protection.
Though the cost difference is important, the more significant and strategic reason to file for a provisional patent is for the immediate protection. This is especially apparent with the new “first to file” patent system, wherein the patent rights are awarded to the first person to actually file an application, including provisional, with the USPTO. Startups are enabled to claim patent rights quickly, and test the waters with their idea and business model before spending the money for a full patent.
More on the provisional patent
- The provisional patent application must be converted to a full patent application within one year or you lose the priority date.
- You can use ‘Patent Pending.’
- They cannot be amended after filing.
- Provisional patents are only available for utility patents, which the USPTO defines as “a new and useful process, machine, manufacture, or composition of matter, or a new and useful improvement thereof.”