All entrepreneurs dream of cashing in on their big ideas. After countless hours of hard work, high hopes, and failed experiments, it’s no surprise that many people are eager to protect their intellectual property. But spending money on a patent might not always be the wisest move. It may lead to drastic spending – from $10,000-25,000 – that could otherwise be avoided.
In an article for Business Weekly, Barbara Corcoran of Shark Tank cautions against filing premature patents. “The worst mistakes an entrepreneur can make are ‘pissing away money on patents and PR,’ and not being confident enough, says Corcoran. “Make the big guys envy you and only then get a patent.”
So how will you know when it’s the right time to get legal protection for your invention? It starts with learning what a patent is – and how the process could help or hinder your goals. If you’re considering a patent, here are a few questions to ask yourself before diving in:
What is a patent?
According to the U.S. Patent and Trademark Office (USPTO), a patent is an intellectual property right granted to an inventor that prevents others from using or selling the invention throughout the United States (Or importing the invention into the U.S.). A few patent basics to be aware of:
- There are three types of patents: utility, design, and plant.
- Patents last for approximately 20 years from the date the application is filed.
- Patents are publicly disclosed.
- USPTO does not enforce patents after they are issued – the patent holder is responsible for enforcement.
- A patent is not a trademark, service mark, or copyright.
When obtaining a patent, it is important to seek legal counsel and advice. The laws pertaining to patents are varied and complex – and you could lose time, money, and valuable ideas if you don’t complete the process properly.
How can a patent benefit your business?
Before you start researching attorneys, take the time to investigate whether a patent is the right decision for you. The idea of having legal protection for your idea can be alluring, but it doesn’t make sense for everyone.
Keeping your idea safe is an obvious upside of obtaining a patent. It can provide a sense of security for investors, and it helps you negotiate top dollar for your ideas if you decide to sell your invention or process to a larger company. The security of a patent can also give you peace of mind, and the right to take legal action against people or companies who infringe on or “knock off” your intellectual property.
What are the downsides of getting a patent?
Just because you have a great idea doesn’t mean it will be a profitable one. In order to offset the expenses of obtaining a patent, you need to have a steady cash flow, or a guaranteed buyer. And if your idea can wait, it may be wise to hold off altogether. Obtaining a patent can be an expensive, and time-consuming, process. From hiring a patent attorney to filing paperwork, it can take years to get the document you want.
Consider your other business priorities and costs. Can you afford the time and expense of the patent application process, or will it hold your company back? You might be able to take the money you would have used for a patent, and instead invest it in your organization. Consult your accounting department – and the rest of your team – to see if there are other areas of growth you should attend to first.
What are the alternatives to a patent?
There are other things you can do to protect your intellectual property besides filing for a patent. Here are a few of them:
- Ask people to sign NDAs. If you show the inner workings of your inventions and ideas to anyone, a Non-Disclosure Agreement (NDA) will help to guard against theft.
- Ask workers or collaborators to sign NCAs. A Non-Compete Agreement keeps employees and contractors from starting a competing business in a specified timeframe.
- File a patent-pending application. For only $100, you can file a PPA that covers your idea for one year, buying you time to raise money or get additional validation for your concept.
- Apply for a trademark. While a trademark is not cheap, it costs far less than a patent, and can help establish evidence that proves your ownership of an idea.
Stay true to your goals
If now isn’t the right time for a patent, that doesn’t mean it won’t ever be. Continue to innovate, collaborate, and refine your ideas to make them stronger. As you flex your business “muscles,” you may decide that moving forward with a patent is the right choice after all. Best of luck on the journey!