Nearly every entrepreneur relies on intellectual property as the cornerstone of their business. Trademarks distinguish a brand and copyrights protect an artist’s craft. But as technology touches more fields than ever before, intellectual property increasingly defines the core of products and businesses.
If your business depends on protecting your intellectual property, you may have considered filing for patent protection. It can be a good way to stake your claim to a product which disrupts and redefines your unique market. However, in many cases, keeping your invention a trade secret can be better way to protect your product, your business and your dream.
How a patent protects
A patent is the assignment of intellectual property rights by the US or other government for an invention. It has to be new, an advancement over the “state of the art,” and definable. There are many reasons why a patent is attractive, especially for entrepreneurs:
- A patent filing protects your property while it is being considered. This can be very attractive for potential investors in your start-up.
- Once granted, a patent allows exclusive rights to the invention that can be enforced through the courts.
- The rights are transferrable and can be licensed, which can be very attractive to entrepreneurs who wish to focus on technology rather than production.
Generally speaking, a patent creates a well defined body of intellectual property which can be valued as a product by itself. The attraction for entrepreneurs comes primarily from that.
When a trade secret makes more sense
One of the primary problems with a patent is that in the process of defining the specific invention you have to disclose exactly what it is. That means that your invention is laid bare for the entire world to see. Your rights to exclusively use it last for 20 years, and at the end of that time anyone can practice what you teach in your patent.
For that reason, you may elect to simply keep your invention a secret from the world if you can.
A good patent is also very expensive to file, and the final decision takes years to complete. In a fast-moving market any advantages may be overcome by new technology even before it is granted. It may make more sense to keep your secrets your own and concentrated on the product, rather than disclose it through the patent.
How do you make the decision?
It’s important to first understand how important protecting your invention is to your products and your business. While you are likely very proud of what you have invented, the market may move quickly and require your start-up to constantly innovate in order to stay ahead. This is especially true with software, which is particularly hard to define and thus patent. Trade secrets are more fluid and move well in a fast-paced market.
A market which takes years of scale-up, such as the pharmaceutical industry, might benefit more from the long-haul approach which comes from patents. Protecting your invention during the start-up process can be vital to prevent losing your edge to a competitor.
In all cases, protecting your intellectual property is a key business decision. It is a matter of strategy that depends on your unique invention and how you as an entrepreneur might exploit it. It is often very wise to work with an attorney who specializes in intellectual property in order to figure out how the advantages and disadvantages of patent protection work for you.