Does you startup need a pre-launch patent?
You don't need a patent to launch.
But you should consider the possibility and decide whether or not it may be necessary or justified.
Some of the primary reasons for considering patenting at an early stage are—
Sometimes a new venture is founded on a breakthrough that is core to the value proposition. This can make patenting a now or never prospect in terms of value.
'Patent pending' boosts the prospect of securing investment at a favourable valuation. Starting the patenting process can be more than repayed by improved investment success.
Patenting can help commercial negotiations with collaborators and competitors alike. A patent application provides a framework for structuring a commercial deal.
Patent pending implies both technology and market leadership. And a disincentive to others to follow your lead.
Overall, the rationale for patenting at the startup phase comes down to risk management. Managing bad risks down, and good risks up.
Deterrence is a significant factor—dampening the incentive of others to compete in your space. Hard-edged enforcement rarely becomes necessary.
Competitors are influenced by the existence of 'patent pending' status, and this alone can strongly discourage anybody from following your lead.
Investors, conversely, can put a lot more faith in your technology and its merits if there are patent applications.
Both competitors and investors alike are relying on the patent as a proxy, as a signal that your technology is important and innovative.
Simply put, it can be hard work to make a reasoned and informed assessment about patents, and shortcut assumptions work in your favour.
The downsides of patenting come down to costs—in terms of money, time and management.
Your technology may pivot as the offering matures. This means a patent can outlive its usefulness. That sometimes happens.
An alternative to patenting is retaining proprietary technology as Confidential Information.
This requires some effort in terms of demonstrable steps to identify and safeguard relevant information.
The takeaway is that you don't need a patent to launch, but it can certainly be helpful when you are approaching the stage of raising funds.
Amongst other reasons mentioned.
Once operating, the case for or against patenting tends to be clearer, and there is more time to develop an informed strategic direction.
Ultimately, the decision is fundamentally a matter of hedging and risk management.
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