Why Smart Startups File Patents

Startup companies, unlike our “too big to fail” banks, can’t afford to make too many Enormous Mistakes without perishing or losing much of their value. One of the Enormous Mistakes that some startups make is neglecting intellectual property. That includes neglecting opportunities to protect their business, as well as the need to make sure they aren’t infringing other patents. These are separate issues and require separate efforts and tools. Some of the common mistakes and misconceptions of startups regarding IP are addressed in the slideshow presentation below, “What Do Startups Need to Know about Patent Law” by Jeffrey Schox.

An important point that Schox makes is that reasons smart startups file patents aren’t necessarily because they expect to license their technology or successfully sue a competitor. But having an issued or pending patent with some degree of quality is essential for attracting investor support. Investors typically expect a startup (in many fields, at least) to have IP that can be of value to the business for many years to come and can help limit the harm of competitive copying. Without that in place, that startup is much less likely to get the funds needed to thrive.

Patents play different roles at different stages in the life of a company. But neglecting IP at any stage is an Enormous Mistake that can lead to extinction.

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