Entrepreneurs put too much hope in their patents. They think it will protect them from competition.
Here is why it's such a bad idea for early-stage companies:
Don't get ripped off by patent trolls
Patents have a high cost and low return.
The cost of filing a single patent currently stands at about 10K USD approximately. A more complex patent will cost you a lot more.
The worst part is that after applying for your patent, it's not over yet. You must pay maintenance fees every few years to keep your IP protected.
The cost varies from country to country, but the total bill can goes up to a hundred thousand dollars. 🤯
At the beginning of a company, there's typically not much money to spend on a patent attorney or filing fees.
If you do have such cash in the bank, you'd be better off investing them in something more valuable for your growth!
You also need to protect your patent once you obtain it. Suing someone will add lawyer fees to the long bill of "protecting your idea".
Think of your industry as a race, you've got to be the fastest to move.
The process of patenting an idea takes too much time.
You must put in hours of work with lawyers and other professionals. Just to ensure what you're doing will make it through the entire application process.
Moreover, the last thing you want to do as an early stage founder is to spend a lot of time with an attorney of an IP lawyer. Unless it's to disrupt them (By the way, the same remarks also goes for accountants, bankers and lawyers. 😂).
And in case you don't know it, you can also get your patent rejected. From the moment you have an idea and the moment the process is done, months have already passed.
Now imagine this happens for multiple ideas over several years. What a loss of time!
You can't afford to lose such time on something with such a low upside.
In the early days, everything you do should be focused on getting customers and revenue.
Patents are also a distraction from what matters most:
Building something better than your competitors so customers choose you over them instead of vice versa.
Don't Bring a Knife to a Gun Fight
Anybody can get around your patent with a different design.
Anybody can make their own version of your product without any reference to your product at all.
Anybody can copy your product. And actually, publishing your patent will help them do that!
And if they do infringe on your patent?
Well, as an early stage founder, it's sure that your opponent will be able to afford a better lawyer than you are.
They will be able to convince the court that there's no infringement at all.
Most of the big corporations are way more armed than you to defend themselves in court.
If you're going up against any of them, you'll likely lose. You'll lose your time, lose your focus, and lose a ton of cash!
Innovation is free and patents are an ancient practice
Patents come from the 1800s, when the USA was an industrial powerhouse.
Patenting was a way to encourage innovation by protecting inventors.
200 years have passed, the Internet is here, the rules have changed. Now, patents are a hindrance to innovation and should be abolished entirely.
But patent firms make millions off of people who want to "protect" their ideas by patenting them.
These guys are from the old world. They tend to think they play a big role in the innovation ecosystem. They are just innovation scumbags looking for preys. Period!
Some investors and institutional partners will often ask you if your product is patented.
That's because they don't know anything about your industry! If they did, they wouldn't ask questions like that in the first place.
So in reality, patents are only useful when you want investors who don't understand your industry to think they're investing in a safe bet.
But if you truly care about innovating and creating real impact, then you should stop playing this game!
"Move fast, build things" the best IP strategy for founders
The best alternative to patenting when you are a small company is to constantly innovate.
Ship features faster than anyone else. Build a better product. Be obsessed with your clients. These are the best ways to ensure success!
In your early days, the most important thing is to continue to innovate. Bring new features to your product. Build a brand and community around it. Stop focusing on "protecting your idea", anyway your idea is worth nothing until people pay for it!
If someday someone will decide to buy you I can tell you it will be for your know-how, team members, community or product.
If you want to protect your IP, just play the trust game. Surrounding yourself with trusted partners and team members are the best ways to protect your IP.
Some will tell you to draft good contracts and NDAs but I am not too convinced about it. But I would rather invest into bulletproof contracts than a patent!
Open source can also help. It prevent your competitors to take ownership of your potential IP.
On top of this, open sourcing your products will force you to build a community around the product.
It will also help spread awareness about your company among users. Potential customers or investors who may buy into what you are building.
Do we agree now?
For young companies patents are real dog shit! Reaching success won't be because of your patent.
It'll be because of your know-how. The know-how of your team. The way you've created an amazing product with a passionate community behind it. And other factors like those.
PS: Patent people don't take it personally 😘 You are protecting your old-school industry. I am just "protecting" my peers!