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Why are Patents Important to a Startup?

Sep 02, 2015

The IBMs and Hitachis of the world have their own reasons for patenting. I’m not going there with this post—this is about startups.

First, here are three reasons frequently given as to why patents aren’t important.

  1. In the end, only the code matters. Protect whatever you might want, but if you don’t deliver fast, you’re toast. So in the end, if that’s all that matters, who cares about patenting?
  2. What you patent, you don’t publish. You don't establish an engineering brand, and you don't hire talented people. The impact of talent far outweighs the impact of “protection.”
  3. Patents take time away from coding (see reason #1).

So now you’re thinking: “I’m sold, nothing more to read, we’re done, right?”

If only it were that simple. Actually, careful patenting is extremely important for a startup. There are several reasons for this.

  1. There probably isn't a single startup out there that doesn’t have some key technical idea. Key idea + execution = success, right? World governments have given you a tool to protect that key idea, improving the chances that you realize that success, so why not use it? Of course, I do not advocate going beyond protection and into patent trolling.
  2. Patents increase the value of the startup. If you are going to be acquired, patents matter. If you’re looking to get a round of funding (or approaching an initial public offering), it matters. And if you're in a post-IPO world, you aren’t a startup anymore (see the title of this post).
  3. The whole exercise of writing a patent can be very clarifying. The mechanics of writing the patent aren't necessarily so—in some cases it's mind-numbingly boring for an engineer (more on that later), but it helps focus on figuring out what exactly your “secret sauce” is.
  4. Defense is the best form of offense. All things that you see, others see. Yes, execution matters. But if you've seen them before, why not tell everyone that you’ve seen them before? It might turn out to be a useless advantage, but why not put up a few thousand dollars to preserve that option?

Of course, if you're going to patent something, you need to make sure that it’s painless for the engineers. Coding should be their job one. At Apigee, we’ve taken this approach. We file patents regularly, and we use a very capable outside IP law firm that only requires the engineers to write in free form what their idea is, and why it is important—and then the firm’s lawyers decide the priority order and conduct interviews. We tried an internal IP review team but it was slowing things down and not adding enough value to justify the delay.

Speed, code, and talent all matter, but also take care to protect your crown jewels.

Image: Martha Ormiston/The Noun Project

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