IP Frontiers: A CLOSER LOOK AT PATENTS FOR STARTUP – Whether to get a patent, how to get one and how to profit from one

By: Lloyd J. Wilson

There are many reasons you may choose to start your own business, with one of those reasons being that you believe the businesses will be financially successful. Patents may be key to helping you achieve your financial goals, but understanding whether to get a patent, how to get a patent, and how to profit from a patent are important considerations.

In the U.S., a patent provides you with the legal right to exclude others from making, using, or selling an invention for a limited period of time (20 years for utility patents) that is granted to you by the U.S. Patent Office in exchange for publishing an enabling public disclosure of your invention.

Whether to get a patent:

As part of your business you may have done something or created something you think is new and will set you apart from the competition. Sometimes, what you have done or created falls within one of the categories of things that may be patented. In the U.S., you may patent a process, a machine, an article of manufacture, a composition of matter, or other improvements to existing products or innovations. Obtaining a patent for what you have done or created may help you and those financially invested in your startup justify the investment of time and money into designing, producing, and marketing your invention. Additionally, by obtaining a patent you can have peace of mind knowing that your invention has legal protections that can be enforced against others if someone infringes on your legal rights. Also, if you are planning to license or sell your invention to another company, a patent is a valuable asset. While there are no guarantees that obtaining a patent will bring you financial success, a patent can help your startup be financially successful.

How to get a patent:

There are various legal complexities for obtaining a patent that can be difficult to navigate on your own without the help of a patent attorney. Crafting the language of a patent application so that it can survive the patent examination process at the U.S. Patent Office is difficult. Even if a patent is granted, the “scope” of the patent claims will often control the commercial value of the patent. The “scope” of the patent claims defines the boundary of your right to exclude others from making, using, or selling your invention without your permission. As you may expect, the broader the “scope” of the patent claims, the greater the commercial value.  However, the patent examination process at the U.S. Patent Office will undoubtedly limit the scope of the claims to what is enabled by your written description of the invention in addition to reviewing the claims to make sure your invention is novel, nonobvious, and useful. Although it may be tempting for a startup with a limited budget to take a do-it-yourself approach to drafting a patent, consulting a patent attorney to help you through this process is highly recommended.

Once you decide to consult a patent attorney to help you through this process, be mindful of what it is you are asking a patent attorney to do. Ideally, you want whomever you hire to provide you with something of value; not just check the box so you can market your product with “patent pending.” While there is nothing wrong with shopping around and trying to keep costs reasonable, the old adage of “you get what you pay for” often rings true for patent applications. That does not mean you have to go for broke to pay for the highest-priced patent attorney. Ideally, you will want to find a patent attorney that provides a high value product for a reasonable price. Things to consider when selecting an attorney include: (a) does the attorney have the appropriate technical background to understand the technology of your invention; (b) how familiar is the attorney with the part of the patent office that will likely examine your invention; (c) what are the success rates of the patent attorney within that technology area; (d) what is the reputation of the law firm; (e) what is the experience level of the attorney; and (f) is the attorney responsive and accessible?

How to profit from a patent:

A patent is an asset just like stocks or real property. Once you have applied for a patent, there are primarily four ways in which you may use your patent to help your business make money. In particular, you may (1) commercialize your invention, (2) market your invention as “patent pending” or “patented,” (3) license your patent rights, and (4) sell your patent rights.

  • Commercializing your invention – by limiting others from selling your patented product you can sell your product at a higher price. However, understanding the role of a patent in commercializing your invention is important. A patent does not provide you with a right to make, use sell, the patented invention—only exclude others from making, using, or selling your invention. Your invention could still infringe the patent rights of others, in which case you would need to obtain a license in order to commercialize your invention. Obtaining a “freedom to operate” opinion from a qualified patent attorney can provide you with a legal opinion of whether your invention infringes upon the patent rights of others. To help you decide if obtaining a “freedom to operate” opinion is right for you, some factors to consider are: (a) whether you could suffer significant financial harm if infringement litigation were to result in an injunction or a costly design-around, and (b) whether a “freedom to operate” opinion would lessen investors’ concerns or potential investors’ concerns about infringement risks.
  • Marketing your invention as “patent pending” or “patented” – you can offer something to buyers and potential buyers that nobody else can offer. This is a great marketing tool that adds value to your product and gives your company greater credibility. Additionally, copycat companies are often dissuaded from reproducing your invention if they are concerned that you might sue them. Further, you begin to build a reputation as being an industry leader.
  • License your patent rights – you retain ownership of your invention and earn royalty payments from licensees on future sales of the product. You may want to consider that you will likely need more than one patent if you are hoping to make money via this process. Prospective licensees may find it easier to design around your single patent rather than agreeing to pay you royalties to use your invention. If you have a collection of patents, i.e. a patent portfolio, that provides broad coverage for many features of your invention, you may have more leverage in negotiations with prospective licensees. It tends to be more difficult for a competitor to invent around multiple patents that cover different features than it is to invent around a single patent.
  • Selling your patent rights – if you sell your business, a patent can increase the value of your business. Some prospective buyers may be interested in buying your business solely for the intellectual property rights owned by your business. Large companies that work in the same technology area as your patent might want to buy your patent rights because your patent, or more likely multiple patents, might be preventing these companies from operating freely.


There are a lot of considerations when deciding whether to obtain a patent, how to get a patent, and how to profit from a patent. Keep in mind that one of the reasons you likely started your business was because you thought your business could be financially successful, and a valuable patent is an asset that can help your startup be profitable.