Protecting Your IP May Be Less Expensive Than You Think
As an entrepreneur, you may have limited cash available. You have rent to pay, lights to keep on, food to buy (even if it is instant ramen), business concerns like hiring employees, research and development (R&D), and advancing your business to attract investors. R&D efforts are undoubtedly crucial to the success of any startup. We understand how it may seem like a wise business decision to focus solely on R&D and a few other areas, like marketing and business development, and save other concerns, such as intellectual property (IP) protection, for “later” when your business is more established, and the cash is flowing. After all, do you really need to protect your IP right now? And isn't IP protection, particularly patent protection, time-consuming and expensive? Depending on the circumstances, you may be surprised at how affordable it can be to secure your IP.
IP can be broken into three broad areas: patents, trademarks, and copyrights. In many circumstances, patents are vital to investors and should be important to you. Filing a patent application can certainly cost several thousand or tens of thousands of dollars, but it doesn't have to. In many cases, inventor involvement can reduce the legal cost of drafting a patent application. For example, suppose you, as an inventor, are willing to provide the drawings for the application and some technical write-up to describe the drawings. That can significantly reduce the time, and therefore the cost, for the IP attorney or agent hired to draft your application. This does, however, require more of your own time than handing the whole project off to the IP professional. It is essential to consider the balance between time and money and what will be best for you and your business. It's also important to hire an IP professional who understands your budgetary and time constraints and is willing to work with you to create a high-quality patent application without breaking the bank.
Reduce Costs with a Provisional Application
Another way to reduce your up-front IP costs is to file a provisional patent application rather than a regular or non-provisional application. As discussed in a previous post, a provisional patent application allows you to lock in a filing date for your invention without providing detailed information and plans. A provisional application can be filed in earlier stages of product development than a regular (non-provisional) application. Out of the gate, a provisional patent application can provide the same protection as a full, non-provisional patent application for one year after filing. Therefore, you can wait for your next fundraising round before dedicating more resources to a non-provisional application.
Provisional applications are often much shorter than non-provisional applications and can be completed quickly, sometimes in as little as a day. Further, the UPSTO filing fees for a provisional application are substantially less than for a regular application; $150 vs. $830 for a small entity and $75 vs. $455 for a micro entity (as of April 2022). If you find yourself short on both time and money, a provisional application may be the solution to secure a filing date for your idea.
The Power of “Patent Pending”
Filing a provisional application also allows you to use the “patent pending” mark for your fundraising and marketing efforts while you finalize the details needed for a non-provisional patent application. Being able to say your invention is “patent pending” is a massive value-add to your business and may help attract investors, customers, distributors, resellers, vendors, etc.
For example, in an investor pitch meeting, one of the first questions you may receive will be what IP protection is in place. A registered trademark or some copyrighted materials will reflect well on your business, but patents are generally considered the most important and valuable in protecting your idea. As a result, investors will react favorably to hearing that your idea is “patent pending.” Conversely, investors may write off your idea entirely if you don't have any patent protection in place.
In addition to attracting investors, the “patent pending” mark may appeal to customers and distributors while keeping competitors at bay. Notifying the public that an idea is “patent pending” lets the world know your business is planning for long-term sustainability and has (or will have) the tools and resources to defend its market share. The legitimacy and credibility afforded to your business by the ability to advertise that you have one or more “patents pending” can help you stand out in your field. Additionally, having a registered trademark for your business name, logo, and any distinctive product names will prevent others from trying to steal your name while building name recognition for your business, which is crucial to attracting and retaining customers.
How Gallium Law Can Help
The IP professionals at Gallium Law have significant experience working with solo inventors and startup companies with budgets large and small. We're excited to discuss your business and your IP concerns and goals and look forward to helping you protect your brand and ideas. Please fill out this Contact Form or call us at 651-256-9480 to set up a meeting today.
*The information provided in this article is not legal advice and should not be relied on as such. The content of this article is for informational purposes only and is meant as a starting point in your search for answers to your legal questions.