Patents are like fertilizer. Applied wisely and sparingly, they can increase growth. But if you apply too many chemicals, or make patents too strong, then you can leach the land, making growth more difficult.

Alex Tabarrok ( Canadian Economist )

A patent is defined as the assurance provided to its inventor that no one can copy the invention. A patent provides rights to its owner to exclude others from making, using, selling, and importing an invention. The validity of a patent is usually for a limited period of time.

The protection through a patent is the most secure way of preventing others from copying your work. It also helps in withstanding the competition in the existing market. A major benefit of patents is that they establish business or brand by preventing competitors with extreme similarities. The creation property of patents allows businesses and inventors to own their ideas and inventions.

Types of patents:

There are three major types of patents:

Design Patents 

If your design is unique, you can apply for a design patent. Examples include beverage bottles (think of the shape of the Coca-Cola bottle) or furniture (such as the kneeling chair).

Plant Patents 

Generally used by botanists, the plant patent is used if you have created a new hybrid plant forms.

Example of a Plant Patent: The Smooth Angel rose or drought-tolerant corn.

Utility Patents

Any new invention or discovery or any improvement in an existing product that has some use for the public utility qualify for a utility patent.

Example of Utility Patent: The little green drink stopper Starbucks gives out with its cups.

The hoverboard as an improvement of the skateboard.

Our area of interest is the startup ecosystem, which may fall under any branch of patents. Hence, the main focus is to study the importance of patents.

General Procedure For Obtaining a Patent

1. Filing of the patent application
2. Publication after 18 months
3. Pre grant opposition
4. Request for examination
5. Examination: Grant or Refusal
6. Publication of grant of patent
7. Post-grant opposition to the grant of patent
8. Decision by controller

Benefits of Patents:

Attracts more investors

Business after a patent registration gets a good reputation in the market. Having this uniqueness and reputation results in two very important things. It increases the market value and attracts investors to invest their time and money in your company.

Your success in gaining patents over your work sends a strong signal to investors that you are worth their attention, which makes it easier for you to attract funding for further research.

According to an article published in June 2014 by prominent French engineering school, MINES Paris Tech, startups that held a patent were between 2.5 to 3.6 times more likely to be successful within 10 years than those that did not.

Improves Business Valuation

A patent is a sign that you are on a way to do something remarkable. News of having patent rights create chaos (in a good way), chaos in the share market for the company’s valuation. This may mean that your market value is going to shoot up. For evidence of the powerful impact of patents on market value, we have a perfect example. Perth-based regenerative medicine firm Orthocell, whose share price rose more than 30% in response to the grant of a US patent for their ground-breaking ‘cell factory’ technology.

Provides lead over the competition

Even if you are not planning to develop and commercialize your invention, a patent can stop others from creating a product that may compete with your existing portfolio. Doing this effectively blocks competitors out of your market and protecting your profitability. Recently, the news that a patent had been granted to Apple for a wearable action camera caused shares of GoPro to drop by 15%. A legit strategy like this might have spared GoPro the pain of Apple’s action camera gambit.

Despite the importance of patents, there are a number of difficulties that may arise. General difficulties are

Information gets available to the public

Your patent application means that you are making some technical information of your invention publicly available. Sometimes keeping the details of your invention a secret keeps the competition at bay more effectively.

Time-consuming

Applying for a patent is a very time-consuming and lengthy process. The market may change or a newer technology could overtake your invention by the time a patent is granted.

Costly

It costs you money whether you are successful in getting a patent or not. The application for the patent, search of existing patents and a patent attorney’s fees add up to a significant cost.

But the benefits of having a patent are more than the difficulties that come during registering for it.

So, it is better to use patent rights.