As a startup, you go through different stages of growth: pre-seed, seed, Series A and beyond. At every stage, you make decisions about your intellectual property. What makes sense while you are still working on your first prototype may no longer work once you start scaling. At the same time, you don't want to spend too much on patents too early, because you will need that money elsewhere. In this blog, we explain how to develop your patent strategy in line with the growth of your startup.
Pre-seed: do your research and don't be discouraged
At the earliest stage, everything revolves around product development. This is the right time to carry out a novelty search. This involves investigating what has already been published in the patent and other relevant literature that may relate to your innovation.
The results can sometimes be discouraging. In any field of technology, there will always be relevant publications somewhere in the world describing technology that shares, to a greater or lesser extent, certain elements with your innovation.
The important thing is not to be discouraged. Finding existing literature does not automatically mean that your innovation cannot be patented. Instead, look at what sets your innovation apart. That is where the opportunities for a patent application may lie.
An initial exploration in the form of a novelty search is a relatively small investment, but it can make a real difference when talking to investors. It shows that you have thought about intellectual property and that your invention has potential. That can help strengthen your case with investors.
Seed: one or two core patent applications
During the seed stage, most startups are focused on developing their product. At this point, it is important to set aside a budget for protecting your intellectual property, so you can take the necessary steps once the product has reached a sufficiently advanced stage of development.
It makes sense to focus on one or two core patent applications covering what is truly essential to your product. That may seem limited, but it is a deliberate strategy. You are still determining whether there is a market for your product and how much revenue it can generate. At this stage, you don't want to spend your entire budget on an extensive patent strategy. Keep your investment focused and manageable.
Investors may be willing to contribute to the cost of a patent at this stage in exchange for a share in your intellectual property. This can be a practical way to share the costs.
It may also make sense to initially file your patent application in just one country. You will still have time to extend protection to other countries later, while giving yourself more time to understand your market.
Series A: expand and take a systematic approach
Once your company starts growing and your business model has proven itself, it is time to consider extending your patents to multiple countries. This is also the point at which you should start taking a more systematic approach to intellectual property.
That step is sometimes overlooked. As you continue to innovate, you will develop new technology along the way. Sometimes this will be an improved version of your existing product; sometimes it will be something entirely different. If you don't protect these developments, you may find yourself relying solely on that first patent. And the bigger you become, the more closely your competitors will be watching. They will see those new developments too.
That is why it is important to establish a process. Schedule regular review meetings with your patent attorney, so you don't have to decide what to do next every time a new development arises. You will already have a framework in place.
Beyond Series A
At later stages of growth, when your startup has become a scale-up, the focus begins to shift. In the early days, the priority was building your own intellectual property. From Series B onwards, another question becomes increasingly important: how do you position yourself in relation to others?
What risks do competitors' patents pose, and how do you position yourself in relation to them? By this point, however, you are in a much stronger position than when you started. You have built your own IP foundation, and you can now build on it.
What you establish during the pre-seed and seed stages can pay off later during funding rounds, negotiations or a potential acquisition. So don't be put off by all the patents that are already out there. Focus on what you are adding, protect it and let your IP portfolio grow alongside your business.
Are you in the startup phase and want to start building a smart patent strategy at the right time? Get in touch and I'd be happy to explore the possibilities with you.
