In our last blog in the Building the Business Case series, we talked about the importance of patents. I came across the following article in mddionline about patenting for early–stage medtech companies and thought it explained the concept of patents well.
John Baskin states that “Although the costs of obtaining patents can be prohibitive for start-ups, obtaining patent protection is generally necessary as a business tool.”
“Intellectual property (IP) in the form of patents and patent applications often comprises a core asset for start-up companies, particularly those in the medical device and biotechnology industries. These assets may provide the basis for valuations underlying early-equity investments, leverage in negotiations with strategic partners, or ultimately lead to a successful exit for a company. Obtaining solid patent protection is often expensive and can be an arcane exercise for those not familiar with the process. The value of a patent portfolio can be reduced or destroyed by mistakes such as inadvertent public disclosure of confidential information, a lack of appreciation for the difference between patentability and freedom to operate, the inclusion of unclear claim language, or poorly drafted provisional patents. The tension between the need for strong patent protection and a general lack of available financial resources makes IP management for start-up companies a significant challenge for entrepreneurs. It’s important to outline some of the issues pertaining to patenting by biomedical start-up companies, describe ways to mitigate costs, and offer practical tips to ensure the quality of patent applications.”
He goes on to explain patentability. “To obtain a patent, an invention must be novel, nonobvious, and useful.”
Once you decide to file for a patent, you must choose whether to file for a full patent or provisional patent. A provisional patent expires after 12 months. Within that year-long window, the applicant must convert the provisional patent to a full application in order to preserve the priority date.
The cost of filing a patent in the United States is generally considered to be $10,000–$30,000. However, the filing cost with the USPTO for a provisional patent is generally less than $200 and it is often prepared with only the cursory involvement of a patent agent or lawyer, minimizing the total cost.
Even I, someone who is admittedly unversed in the art of patenting, could understand when and why you would want to obtain a patent after reading this article.