Do you think filing a patent is too costly and time consuming? Follow the Lean Patenting Strategy

16th Oct 2014
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This is the third article in our series on IP rights for startups, here are the first two:

1) Startups, know your IP rights

2) Infringing on 3rd Party IP rights


patents

Are you bootstrapping, with a vision of having a multi-country corporate business in the next few years?Are you building a patent portfolio to sustain the business?

No? Is cost the reason behind it?

Well, if we tell you that you can plan your finances to get maximum protection from patents, does it sound promising? If yes, than please read ahead for a lean Patenting recipe’s secret.

When you are bootstrapping and have conceptualized a Minimum Viable Product (MVP), it is the right time to begin with protecting the product. However, at this stage you are still burning your money and the MVP might not have been tested, so the investment should be minimal. To protect your MVP, many legal systems throughout the world provide a tool called “Provisional Patent Application”, which is provisionally filed with minimum details to meet the requirements of Patent laws. Commonly, the legal cost and professional fees involved are quite low at this stage. It is important to note that a provisional application is nothing other than saving the date for your MVP. This application will not be examined, nor will it be published, it is just kept with the patent office as evidence that your product has been conceptualized. In the case where your product goes through substantial changes during the Testing or Prototyping phases, it will not be a big burden as you have only invested a minimal cost. With the changed product, you can start afresh with protection.

Few months down the line, you may have begun the process of Prototyping and Testing the product, and may have also begun with Angel funding. At this stage, you may still be unaware of your commercialization and growth strategy worldwide. So, it shall be difficult for you to determine which countries you are targeting for patent protection. As we have mentioned in our first article, a patent provides protection only in the jurisdiction in which the patent has been granted. So in cases where multi-county protection is aimed for, a patent needs to be filed in every country that protection is sought for. To deal with this scenario, another tool is provided, the “Patent Cooperation Treaty”. You may file for a PCT application using your provisional priority, and this provides a wait period of 30 months from the provisional filing date, within which you may decide all the countries in which you aim to protect your invention.

Once your start-up has completed about 2 to 2.5 years, you would have a clearer picture about your business expansion strategies. You would have also received another round of Angel funding or Venture Capital funding, making it possible to move towards worldwide patent filing strategies as there would be sufficient finances.

This strategy helps you stretch your finances further and also provides sufficient time to work on your commercialization and business strategies, which eventually will lead to a healthy Patent portfolio for your start-up over the years.

The above strategy is one of several different lean strategies; however a specific strategy should be formulated keeping in mind the nature of business, technical area, finances, etc. of your own start-up.

Timelines

Funding

Product Lifecycle

Patenting

Stages

Available Capital

(INR)

Lean Strategy

Investment

(INR)

0-6 monthsBootstrappingFew Thousands to Few MillionsMinimum Viable Product/ConceptualizationProvisional Application Filing in IndiaLess than Ten Thousand
6 months – 12 monthsAngel FundingFew MillionsPrototyping and TestingPatent Cooperation Treaty  Application Filing50 Thousand to 200 Thousand
12 months – 24 monthsAngel Funding 2nd Round/ VC Funding 1st Round5 Millions – 50 MillionsClient AcquisitionProsecuting PCT Application/ Building worldwide Filing StrategyFraction of a Million
24 months onwardsVC FundingMore than 50 MillionsScalingFiling Patents in multiple countries1-5 Millions

Fig. 1: Mapping of timelines based on Funding, Product Lifecycle and Patenting Strategies for startups.

About the authors:

This post is co-authored by Gaurav Singhal and Ananya Dhuddu. Gaurav is the Director and Principal IP Attorney at Patracode Services Pvt Ltd. A B. Tech in Computer Science, LLB from IIT-Kharagpur and Masters in Business Laws from National Laws School of India University, Gaurav has been working in the IPR field since many years. Ananya Dhuddu is an Intellectual Property Analyst at Patracode Services Pvt. Ltd. She is a Life Sciences graduate from Pennsylvania State University, USA. She holds a PG Diploma in Medical Law and Ethics from National Law School of India University, Bangalore and a PG Diploma in Intellectual Property Rights and Patent Management from GIIP, Bangalore.

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