Saturday, October 15, 2011

IP strategy for tech startups

Most VC & angels want IP in order to consider investing in your startups.
Why: seems a security illusion. If they were really thinking about it, they will ask for industrial secret most of the time. Let me explain:

First, look at some facts:
  • 95% of patents are useless (lawyer expensive fees & precious time)
  • Patents are most of the time weapons of litigation which result in licences exchanges agreements (why google bought Motorola mobility)
  • 50% of patents are invalidated in litigation (thanks David) you need a portfolio of patents if you really want to play in that yard
  • It takes on average 6 years after patent deposit before it is validated....which means your competitors can copy you easily for many years because your invention will be public ;)..
  • You need deep pockets to enforce your patent rights, only big player can play that game
So, if you aren't thinking of been acquired by a very big player or founded by a very deep pocket VC, you are wasting your money, time and are helping your competitors by giving them all your secret recipes and even better, you are paying for it. Isn't that the most inefficient thing you can do?

Btw, you should know that filing is making a deal with government so don't expect efficiency. Last, lawyers are relevant in ambiguity which might explain the patent process.

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