Patents for startups: never enough? © AI-generated image
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Applying for and owning patents is often seen as a sign of success for technology companies. After all, a good patent can prevent competitors from copying your invention, giving you an edge in the marketplace. But are patents always a blessing, or can they also sometimes become a block to your success?

Intellectual Property

In a series of blog posts, Marco Coolen provides insight into his work as a Dutch and European patent attorney at AOMB. The common thread is the importance of paying attention to intellectual property and acquiring the best possible negotiating position.

Marco Coolen, AOMB. Photo © Bart van Overbeeke

Take the example of Lightyear, a promising Dutch company that developed a solar car. Lightyear built an impressive patent portfolio, which protected them from competition and allowed them to develop unique technologies such as their in-wheel motor drive. When the company ran into financial difficulties, these patents proved to be something of a lifeline. The fact that they had captured so much technology made them more attractive to investors and potential acquisition candidates.

Financial expenses

However, there is also a downside to owning a large patent portfolio. Patents cost money, a lot of money. Not only to apply for them but also to maintain them and defend against infringement. This can become an especially heavy financial burden for startups. In my practice, I have seen companies sometimes invest so much in protecting their technology that few resources remain for further development and marketing of their products.

So, a large patent portfolio is not always a guarantee of success. In some cases, it can even accelerate a company’s demise if the market for the technology is not large enough.

So, as an entrepreneur, how do you determine whether a patent is really necessary? The key lies in the
strategic use of intellectual property. One good patent that protects exactly the crucial innovation of your product can often be more valuable than a whole series of less relevant patents. It’s all about focusing and managing your IP strategy smartly.

Smart management

It is also essential to consider whether a technology might be better protected as a trade secret rather than through a patent. Trade secrets do not require expensive applications and maintenance costs, but you must make the right arrangements internally to ensure secrecy.

In short, patents can be a powerful tool in competition, but they must be used with care and strategy. Not every idea needs to be protected with a patent, and not every innovation requires an extensive portfolio. A smart entrepreneur carefully weighs the costs and benefits and chooses the approach that best suits his or her business and goals.

The success of a business depends not only on what you protect but also on how you protect it. With the right strategy, intellectual property can be a valuable asset in the growth of your business.

Collaboration

This story is the result of a collaboration between AOMB and our editorial team. Innovation Origins is an independent journalism platform that carefully chooses its partners and only cooperates with companies and institutions that share our mission: spreading the story of innovation. This way we can offer our readers valuable stories that are created according to journalistic guidelines. Want to know more about how Innovation Origins works with other companies? Click here