March 25, 2020 | Written By Elana Bertram
This is the sixth post in a seven-part-series detailing the biggest entrepreneurial mistakes business owners make. The series will run over the next few weeks so check back to learn more. To read the previous post in this series click here
Patents are cool. Every entrepreneur wants to be able to say they are listed as the first inventor on a patent. You get a shiny, frame-worthy certificate, a unique serial number, and credibility when you have an issued patent. There are a lot of business reasons to get a patent as well, particularly if you are trying to license or sell your idea to others instead of manufacturing it yourself.
In Mistake #5, we talked about some reasons a patent isn’t always the right move for your invention. Being coy about your pending patent applications can be a Mistake unto itself.
Patents are expensive. The utility application alone can cost upwards of $10,000, and you must plan to spend at least that much again over the 2-3 years after filing to respond to the objections and rejections of the USPTO Examiner. After all that, there is no guarantee you will get a patent.
If you are using your IP portfolio, for example, as collateral for a business loan, a lender will scrutinize its vitality. Filing a bunch of patent applications and then abandoning them at the first unfavorable Office Action (formal USPTO communication) gives the impression that you A) have no money or no brains to continue pursuing valuable rights, or B) your patent applications are weak. Worse yet, repeatedly continuing and abandoning patent applications can be an indicator that you are infringing on existing patents and are just abusing the system until your funding comes through. Neither are good business practices and neither will fool potential investors.
Take stock of the value of your ideas as described above. Ask yourself why customers buy your product. If money is tight early on, you need to triage with discipline. Target the areas of your business that drive revenue and focus on protecting those parts first and best. Be sure to ask your patent attorney about ways to spread costs out over time. You may be able to save more than $10,000 in initial costs by holding off on filing continuations and divisional patent applications on derivative features until new funding comes in. You may find that having many patent applications pending leads to spiraling costs with minimal returns. This isn’t to say that you should avoid patents, but if you’re concerned you won’t be able to afford a patent attorney to continue responding to Office Actions over time, you are better served by having one or two patents issue on major innovations that drive value than file and abandon ten patent applications.
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