In defending patents, particularly in the context of
startups, Mr. Harris states:
But most significantly for startups, that property right can
represent enhanced value for investors and improve the prospects for
obtaining early stage financing. A
well-crafted patent—or even better, a collection of patents in a portfolio that
forms a patent “thicket”—reveals and represents the fruits of product or
service development, helping form a protective barrier against theft. If that
product or service requires capital to come to market, investors draw some comfort
from the patents’ protection of the investment while the product is commercialized.
This early protection is vital because, in this author’s experience, it often
takes companies years to go from “maybe a good idea,” to a prototype, to a
testing environment, to a sold product, to market acceptance, to profitability,
and finally, to investment realization.
My own personal experience mirrors Mr. Harris’: it can be
difficult to draw attention from venture capitalists without solid patent rights. I haven’t practiced in a while, but my
understanding is that venture capitalists still value patents in determining
whether to invest in a startup. [Interestingly,
I’ve never seen the use of term “patent thicket” in a positive light.]
Moreover, in spite of the assault on patents (and their
cost), Mr. Harris notes that startups should take into account these ten
considerations concerning patents: 1. Enterprise Value
Enhancement; 2. Signaling Quality
to Investors and the Investment Community; 3. Establishing
Ownership of Technology and Inventions; 4. Assertion Against
Competitors; 5. Avoiding the IP of
Competitors and Others; 6. Revenue
Generation/Licensing/Monetization of IP; 7. Facilitating
Collaborative Research; 8. If You Get the
Patent, You Block the Competitors; 9. The Laws Will
Change . . . Again; and 10. Although Trade
Secrecy and Copyright Offer Some Protection, There Is No Viable
Alternative to Patents.
Do you have any other considerations to add? Also, what is on the cost side?
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