A Business Purpose for Each Patent
This is a reproduction of Investing in Patents by Russ Krajec. For the complete book, get it on Amazon.
The startup operates in a different world than big companies, especially when it comes to patents.
Large companies have enormous patent budgets that may pay for hundreds or even thousands of patents. The in-house attorneys at the big companies triage thousands of inventions each year, and may manage a docket of several hundreds of patents. They spend literally only minutes deciding which inventions to patent and which not to.
Startups are different. Each patent is a sizeable investment and worthy of a meaningful analysis.
When a startup decides to file a patent, that patent should meet at least one strong business goal and maybe several secondary goals. For example, a patent designed to keep competitors from directly competing may have outbound licensing potential as well as elements that may be cross licensed with another company.
Large companies can afford to spend a few of their budgeted patents for specific, targeted uses, but startups need to keep their options as open as possible.
Keep in mind that in almost every case, the business purpose of a patent will change over time. It may start out as a patent to keep out infringers but may wind up being cross licensed five or ten years later.
The key point: a startup should have a business purpose for each patent they file and that business purpose should justify the due diligence and extra time to do the patent well. Startups cannot afford to churn out high volumes of patents and hope that one of them might be valuable.
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