Should You File a Software Patent?
You’ve been hard at work on your latest product and you are getting ready for launch. Congratulations!
While you are proud of your work and eager to show it off, you’re probably also worried about it being stolen.
This is the time when you might find yourself asking, “Should I file a software patent?”.
Well before you do, here are a number of things to consider from our experience advising start-ups on the issue.
It’s slow. It takes years.
In 2012, there was a three-year long backlog at the United States Patent and Trademark Office (USPTO). With 2014 touting another record number of patents submitted (300,678 to be exact) it isn’t a far cry to assume that the three year delay has only grown.
It is more expensive than you think.
The cost of filing a software patent is upwards of $15,000. These costs add up quickly between filing, attorneys, and reviews. IP Watchdog gives a thorough walkthrough of just how these costs can be broken down.
If you are looking to cut costs however, don’t skimp on your attorney. A well-written patent is more likely to be granted the first time around and is the best way to save your time and wallet.
Additionally, this only reflects the costs of filing a patent, not protecting one.
It’s likely invalid, even if approved.
If well written enough, you might get approved through the USPTO. But it is almost guaranteed that you are entering a patent minefield with piles of prior art (previously submitted information relevant to a patent's claims of originality) and even larger piles of likely granted patents currently infringing upon each other and capable of being invalidated by said prior art (which isn’t too surprising with ~4,004,689 US patents currently active).
Because of the previously noted accumulation of patents, “many patents are approved becaue examiners don’t have time or resources to search all the relevant references,” explains Colleen Chien, who specializes in intellectual property at Santa Clara University School of Law.
It doesn’t serve it’s purpose unless you are able to litigate.
Patents aren’t useful until brought to court. Due to the patent overload, expecting your patent to protect itself is naive. The sheer volume of currently active
makes the complex issue even more convoluted.
When your competitors start copying your idea, it is unlikely that they will perform a patent search. (And in fact, most companies actively avoid them, for fear of willful infringement.)
Therefore, if you actually want to put your hard-earned patent to use, it is your responsibility to send notice to potentially infringing parties -- which can start as a simple cease-and-desist or licensing offer, and end up as a decade-long court battle.
This is why patents don’t make sense for a business whose strategy does not already include litigation.
And the true cost of patent litigation? It can push that patent price tag from $15,000 to upwards of $10 million!
Investors may like it.
There is only one semi-immediate ROI for purchasing $15,000 worth of lawyers for early stage startups: it can act as an antidote to the perceived barrier to entry for investors. Investors will take anything they can get to de-risk their investment, and patent applications are an easy, tangible way of doing so.
If you’ve invested a lot of money in R&D, you’re planning on paying for great lawyers to write a strong patent, and you’ll have the money for litigation — it might be worth it.
However, by spending $15,000 on acquiring users instead, you can also create long-lasting value for your business that will end up meaning fa
r more to an investor than a patent application. Traction and brand recognition (driven by an excellent product of course) is the only practical protection one can have in many markets.
There are places for patents, namely highly specialized technology with significant upfront R&D costs (think medical industry), backed by a firm with deep pockets to litigate as necessary. But the rest of us should focus on building great products, expanding user bases, and cross our fingers.
Disclaimer: This information is only provided for reference and does not constitute and/or is not a substitute for legal advice. Please contact a patent attorney for your specific strategy on patents.