Guest post by Raimondo Cau, Dutch and European patent attorney
Patents are often associated with hindering competition or blocking copycats. However, this is not an issue for most startups, as they prefer to focus on developing their own product rather than building defensive barriers.
For startups, a patent can significantly enhance the company’s value, as customers and investors often view patents as indicators of credibility, innovation, and potential growth. Companies like Incooling, LionVolt, and STENTiT have succeeded by further developing and patenting technology from reputable institutions such as CERN, TNO, and Eindhoven University of Technology. A patent serves as evidence that a startup holds a unique market position. A patent can strengthen a smaller startup’s negotiating position in collaborations or negotiations with larger companies by demonstrating that they have something unique to offer. Additionally, intellectual property is considered relatively stable as an asset, which can reduce financing risk, for instance, by serving as collateral. For example, Lightyear was able to relaunch thanks to its patent portfolio successfully. Thus, a well-crafted IP strategy makes a startup more attractive to customers, investors, and partners.
However, the benefits of a patent must outweigh the costs and time involved in applying for it, especially in the early stages of a startup. Since the product is continuously improved during the early phase, there is also a risk that the final version of the product may not be fully covered by the previously filed patent, potentially making the investment in IP less rewarding than desired. So, how should this be approached effectively?
A patent attorney collaborates with you to develop an IP strategy that aligns with your company’s financial planning and commercial objectives, ensuring that your investment in IP yields maximum returns.
Lean
An IP strategy does not have to be expensive and can be set up in a ‘lean‘ manner.
The ‘lean’ methodology is well-known among startups and focuses on quickly developing a minimum viable product. This approach allows the startup to engage users who provide valuable feedback on the product. Additionally, user engagement signals to investors that there is market traction, suggesting that an investment in the company could yield returns in the long term. This strategy helps a startup become part of the 10% that survive the first three years despite limited resources. By continuously validating iterations of the concept in the market, the company can grow rapidly while remaining cost-effective.
An IP strategy can be effectively tailored to a startup aiming for ‘lean’ growth by making targeted, well-considered decisions about what to patent, when to do so, and by considering alternative protection methods. In the early stages, when the team is small and financial resources are limited, it is often better to develop internal know-how and focus on product improvement. Where possible, crucial aspects of the concept can be kept secret. For some startups, it is clear from the outset that the technology is potentially groundbreaking, allowing the general concept to be captured in a ‘basic patent’. For others, it is advisable to secure IP only at a design freeze or just before a new funding round. In other words, ‘lean’ patenting can accelerate a startup’s growth in a cost-effective manner.
Opportunities
Of course, the best strategy and the decisions made at each moment are up to the people who dedicate themselves to the startup daily. A patent attorney who understands the company’s dynamics can highlight key moments in the startup’s development where IP plays a role, ensuring no opportunities are missed. Therefore, my advice to founders, developers, and entrepreneurs is to seek out a patent attorney who understands your technology and goals and can contribute to the company’s growth early on.
Visit www.octrooigemachtigde.nl for an independent overview of all Dutch patent attorneys, and contact an IP specialist in your region.
Related Posts
