India-First-Global-Insights-Analysis -Sharing-PlatformIndia-First-Global-Insights-Analysis -Sharing-Platform

Tech Startup, without Patent?

, June 4, 2013, 0 Comments

patent-tech-startups-msme-smeStartups and SMEs tend to ignore the power of patent until unless they get bullied by big companies by the use of patents. They lack resources but if they have to be in the business of technology, they have to protect their backs before starting on. Otherwise they have to close their doors whenever a big company having patent want them too.

Some of the established leaders rely on patent-bullying to prevent new players from making a name, or even prevent existing companies from expanding their innovation space. Now let me tell you the situation usually tech start up face during the course of their entrepreneur or business journey.

Sachin and Rahul who were friends from their IIT days and were also project buddies, developed a software which uses face recognition for security systems. Their software was way better than what was available in the market. They did not attend campus interviews and decided to start a company to sell their software. They made a business plan and started showing their software demos in different tech shows, exhibitions, and also to potential investors. Actually they showed to everybody whom they encountered. Luckily after three and a half years of hard work they were doing good and also had few big clients. But then the unexpected happened, they got a notice that they are infringing on some already issued patent and have to stop their work. It was a big MNC who had filed patent before them and got it issued too. They consulted a patent attorney and understood that they do infringe on MNC’s patent and also that the patent was filed after they started working on it. But now they do not have any option than to stop their business operation or sell their company and work for that MNC.

Another case is of Vishal, an experienced professional in display technology domain left his job after 12 years to work on his idea of new display technology. In one year he made a prototype of his idea, which was a new combination of LED and LCD in a display monitor and has significant advantages over existing display systems. Being an experienced professional he knew he needed patent but thought as soon as he raises money, he will file the patent. He went to potential investors and shared his idea but got success in raising money only after two years. He started operations in developing the product and also went to apply patent but later his patent was rejected because another patent on same idea was filed in the time when he was raising money. Now he has to get license and share a chunk of his profits with them, if he wants to sell his product.

What is common in above cases?
No Patenting.

Sachin and Rahul totally ignored patenting and Vishal delayed the most important thing. They had to suffer for their avoidable mistakes and this silly mistake costed them their companies. For a technology based startup, the technology is the base, all other functions of the business are build on that, so not protecting their technology is suicidal.

We were raised to believe that anyone with a strong mind and a good idea can make their own way. Sadly, the world that we were taught to love & live, hardly resembles the ideals we hold dear.

Well Patent is the most powerful weapon and actually the only weapon to fight against the monster big companies if you are a tech startup with some new improved technology.  If you have patent they will offer to buy you out; you have choice to sell or mind your own way. But if you have no patent then they don’t give a damn and use your idea without giving any credit to anybody and since now all major countries have “First to File” rule, even if you invent something first but somebody files patent for same idea before you, you are done.

So the gist of all talk is that if you are a tech startup or MSME,  file a patent first for whatever you feel is innovative. Do not judge yourself that it qualifies for patent or not, consult a good patent professional with technological background. That will save you a lot of headache in future.

About author
Pankaj Thape is the founder of EPatents and holds a M.Tech(Mechanical) from IIT Kanpur. Pankaj has over 9 years of experience in Technology and Patent consultancy ...more