Why Don't All Startups Patent Their Technology?

Startups have a lot to think about – how do they build and improve their products, how do they bring them to market and how do they support them? So, it’s no wonder patenting their products is not the top priority. But it should be higher than you think. 

In addition to the common time and cost objections, many of the top reasons startups aren’t actively patenting their products are born from a lack of knowledge about patents. Here are the top three objections we hear that clearly fit this description:

●      We thought software isn’t patentable

●      We use open source software

●      Our product/service doesn’t contain any patentable inventions

Are these valid objections? Let’s dive into the facts.

Software isn’t patentable

While the court decision Alice Corp. v CLS Bank (2014), which found that particular abstract ideas implemented in a computer were ineligible for patent protection, put some doubt around the ability to patent software, the number of software patents granted since that time should dispel all concerns. In fact, more software patents have been granted after “Alice” than were granted before. So, if software can’t be patented, then what are all of these companies spending time and money to protect?

We use open source software

Many innovative companies build solutions on top of open source software, but this does not make their solutions unpatentable. If a company develops value on top of publicly-shared code then it often qualifies as patentable material. Companies like RedHat, a leading producer of open source software, has pragmatically filed for patents to shield against competitors and has thousands of patents in force. In fact, Red Hat and its extensive IP portfolio were acquired by IBM at the end of October 2018 for $34 billion.

We don’t have any patentable inventions

This is a common sentiment held by startup CEOs and CTOs. They don’t necessarily consider their products/services as revolutionary, only as the mundane technology they work with every day. Being too close to the the products and services can make it difficult to step back and see the bigger picture. An effective way to get a rough idea of whether your technology is patentable is to ask yourself “does your company offer a competitive advantage?” If so, then it’s likely you have patentable intellectual property. 

While lack of knowledge keeps many startups from pursuing patents, cost still remains the most common deterrent. This objection obviously has some merit, given that startups and mid-sized companies are often resource-constrained. Executive teams are offered the false choice of either developing their product and market or legally protecting their innovations. This is true because the cost of drafting and prosecuting a non-provisional patent application with a traditional law firm can be inefficient and expensive, running upwards of $15,00 - $20,000.

Fortunately, modern patent approaches leverage technology to deliver higher quality patent applications for less than half the cost. This allows forward-thinking patent professionals to employ affordable, fixed-fee structures, which allow smaller companies to develop their product/service AND protect their intellectual property for less than half the price.

To learn more about the common objections to patenting (and why they’re wrong) get your free copy of TurboPatent's short ebook, The 30 Minute Patent MBA.