Two Parts of a Patent Application: What You Give Away and What You Get In Return

Patent applicants are told that they are getting a “monopoly” on their invention, and that leaves out half of the equation.

Patent applications come in two parts – the specification and the claims. The specification is where you describe your invention, and the claims is the protection that you get when the patent is granted.

The claims can be brutally hard to understand, especially when they are written that way intentionally. It is much easier to look at the pictures in the patent and read the description.

Many people (especially the media) think that the description of the invention is what is ‘protected.’ But it is not.

A patent application is a tradeoff, one that few people appreciate.

A patent application forces you to give away something to get something in return.

What you give away are trade secrets that you could have kept behind closed doors and never told anyone.  What you get back are the claims that you enforce against copycats.

Giving away trade secrets is costly.

Trade secrets are any knowledge or information that gives your company an advantage.

Think about your product roadmap.

Most startup companies are based on a concept that will, hopefully, evolve into a profitable business. The core concept may have several variations, improvements, use cases, customer types, and many other permutations.

Do you want to publish your entire product roadmap for everyone to see? Does that make good business sense?

The most secretive part of any corporation is the new product development department, and there is good reason why. Tipping your hand to a competitor can allow them to out flank you and take away that advantage.

How startups hurt themselves two ways with early patent applications.

Startups have an unfortunate tendency to put far too much information in their early patent applications. This is often a ‘strategy’ that their patent attorneys tell them, as it makes life much easier for the patent attorney. However, this ‘strategy’ has dire consequences for the startup company. This is yet another example of the conflict of interest between the patent attorney and the client.

First, the only value a startup company has at its beginning is its concept.

The concept at the beginning is “without form and void.” It takes a lot of work for the entrepreneur to work through all the issues. Will it even work? Can we make it cheaply? Do customers want it? Will the customers see enough value to pay for it? Will it be profitable?

By trying to get a patent on the ‘concept’ for fear of someone stealing it, an entrepreneur is giving away the concept for free – and probably not getting the protection they think they want.

Most patents on the ‘grand idea’ of a startup result in extraordinarily narrow claims. This is because the ‘grand idea’ is far too broad for meaningful patent protection, so your patent attorney is forced to load up the claims with lots of limitations to get the patent issued.

In this situation, you gave away the only thing of value and you got nothing in return. Not a good trade.

Early patent applications are boat anchors that hurt your company down the road.

I often do due diligence for my angel group, Frontier Angels. We were reviewing one company that filed a ‘grand idea’ idea patent several years ago, and their patent attorney had them add to the original patent application several times. This is called a “Continuation-in-Part” application.

The company started with a concept for a device to be used by young women with a specific condition, but failed to find traction with this group. Over time, the company realized that the same basic concept – with several more improvements – would work better for our aging population.

The basic technology was the same, but the application and feature set were different.

The problem was that the company has been in business for over 12 years. And that original patent application, coupled with their patent attorney’s unfortunate suggestion to keep building on their original patent application, was still pending.

Because their patent attorney chose this ‘strategy,’ their next patent would expire 20 years from the *earliest* filing date in this long chain of patent applications. In other words, their next patent from this family would only have 8 years left on it.

Because the company still has not yet gained sales traction, it may be 2, 3, or even 5 years before they have meaningful revenue and are ready for an exit.

But when this company eventually gets acquired, the patents will be almost completely expired.

This company’s patent ‘strategy’ ultimately consumed a lot of precious money and time, and generated IP assets that will never help the company get acquired.

I don’t want a patent on the overall concept. I want a patent on the last key to making it work.

A good strategy would start with an initial filing that has claims tailored to the product you expect to bring to market.  Rather than dumping a laundry list of design options into that first patent application, wait to see which options turn out to be useful.

Once your customer has identified the useful feature of your product, get a patent on that feature.

As an investor in IP, patents on the ‘vision’ of the entrepreneur are pointless. I don’t really care what the entrepreneur sees as much as I care what the customer sees.

I will wait to get a patent until after we hear the customer’s voice.

Startups only have so much money to spend, and they need to be judicious about it. As fun as it is to have your name on many patents, my joke is that I just want my name next to “pay to the order of…”

I like the strategy to figure out what the customer wants, then get a patent around that concept.

Many inventors are worried that somehow someone will ‘steal’ their invention if they talk about it before getting a patent. The patent bar – and even the USPTO – certainly stokes that fear as much as they can.

But getting a patent too early – and writing one with too many ideas in it – have a devastating long term effect on your business opportunity.