Patents might not be the most thrilling topic for everyone, but they can make a significant difference in the success of a startup. If you run a startup or are an entrepreneur with a novel invention, an intellectual property (IP) strategy should be part of your overall business strategy.
As a patent lawyer and someone who has built and sold companies for tens of millions of dollars, I can confidently say that securing patents can be a game-changer for any new venture. Here’s why:
1. Increased Startup Valuation
First and foremost, patents can make a startup much more valuable. Investors love to see that a startup has patents because it signals that the company has something unique and protected.
This uniqueness often translates to a higher likelihood of investors pouring in more substantial amounts of money and offering better valuations. Essentially, patents can turn a promising startup into a highly attractive investment opportunity.
Additionally, the protection a patent provides can mitigate the risk an investor feels they’re taking on in a given investment. This can make it easier to raise more funding or increase valuation.
2. Competitive Advantage
Secondly, patents can serve as a deterrent to competitors. When a startup holds patents, it sends a clear message: the company is serious about protecting its technology.
This seriousness can make competitors think twice before attempting to copy or infringe upon the patented technology. In the competitive world of startups, this protection can be crucial for maintaining an edge in the market.
That said, if a competitor or other company infringes on a patent, it is the responsibility of the patent holder to enforce the patent. This means the patent holder must take legal action – if they choose to – against the patent infringer. In this case, I recommend hiring a patent attorney team with experience in patent litigation, like my team at Schell IP in Boulder, Colorado.
3. Revenue Generation
Patents can also be a source of revenue for startups. Through licensing agreements, startups can allow other companies to use their patented technologies in exchange for a fee. For some startups, this can be an excellent way to bring in extra cash, providing additional financial stability and resources for growth.
Licensing agreements are another place where bringing in an experienced patent lawyer can be beneficial. A patent lawyer can help you write and negotiate the right agreement for your business needs and goals.
4. Attracting Talented Employees
A robust patent portfolio can help attract talented employees. When a startup holds patents, it signals that the company is innovative and unique.
This reputation can attract employees who are eager to work for a company that is doing something different and impactful. Talented individuals are often drawn to innovative environments where they can contribute to cutting-edge projects. Make sure to include your pending or granted patents in your job postings.
5. Market Differentiation
Finally, patents can help startups stand out in the market. By securing patents, startups can differentiate themselves from competitors and establish themselves as leaders in their industry. This differentiation can be a critical factor in the startup’s success, helping it to capture market share and build a strong brand.
Additionally, “patent pending” and “patented” claims can be used in marketing materials, such as packaging or advertising, to help increase sales. These terms signal to customers that you have something different and unique from other products on the market. This can help them understand how you’re different and drive them to purchase.
Finding the Right Patent Attorney
The impact of patents on the success of a startup cannot be overstated. They increase valuation, provide a competitive edge, generate revenue, attract top talent, and help differentiate in the market.
For any startup looking to succeed, investing in a strong patent portfolio can be a game-changing strategy. But how can you take the first step in developing an IP strategy to protect your innovations? Find a patent lawyer.
The team at Schell IP has years of experience representing hundreds of clients on thousands of matters related to intellectual property product development, venture formation, and mergers and acquisitions. Regardless of your IP needs, our team can help you. Book a free consultation today.
