If you’re a small business, intellectual property protection can be expensive. This is particularly true for patents, which protect inventions. Here are five things that small business owners should know before spending the time and money to apply for patent protection.
1. You don’t need a patent to produce an invention.
Patents are not a requirement for bringing a new product to market. Instead, a patent gives you an exclusive right to prevent others from making, using, importing, or selling an invention that resembles yours. In simple terms, a patent simply gives you the right to file an infringement lawsuit against someone else.
That said, many patented ideas are not commercially successful. Before spending the time and money to patent your invention, consider current market conditions and ask yourself “What is the problem that my invention solves, and will anyone pay for the solution?”
2. A patent is a national right.
Patents only protect your invention in the country which issues the patent. That means your U.S. patent doesn’t provide worldwide protection. Obviously applying for additional patents abroad increases your expenses, so determine where you plan to sell your product. And just because you aren’t going to directly sell in a particular country doesn’t mean you shouldn’t file there, because you may be able to generate income by selling or licensing your patent rights in those countries.
3. Timing matters.
If you go to market with your invention before filing for a patent, you may lose your ability to patent it. In the United States, there is a one-year grace period to file for patent protection after entering the market. For all other countries, however, if you publish or offer your invention for sale prior to applying for a patent, you lose the right to protection. Also, patents are not permanent. In the United States, a patent expires after 20 years and no extensions are available.
4. Know the rules.
The standard for getting a patent is that it must be useful, novel, and non-obvious. As part of the examination process, the United States Patent & Trademark Office will look to see if the invention has ever been disclosed before. If so, the USPTO will deny the patent application. A patent also needs to stand up in court. Use a skilled patent attorney when filing your application. Patent lawyers are highly specialized and must pass a separate patent bar examination before they can practice.
5. Patents need not be used to have value.
A patent is an intangible asset, which means that even if it exists solely on paper, it can still have value. Patents can be sold or licensed, which means the inventor can still profit without having to invest in production and distribution. In addition, patents may improve your exit strategy by making your company more attractive to a potential acquirer.