

Are patents important to start-ups? - kizel

My team is working on building a platform for companies to share patents. Essentially, we help you barter a license to your patent in exchange for a bunch of licenses to technologies relevant to your field.<p>Would you find this useful?
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VanL
In my opinion, there are only three times when patents are useful to startups:

1\. There is a hard computer science (or other) problem at the very core of
your product or service -- one that you have solved, that competitors have
not, and that gives you an advantage. Further, the answer to this problem,
once known, is easily replicable. The canonical example of this is
Google/PageRank, and the closest non-software analogue is drug research. This
is what software patents are designed to protect and they usually do an ok job
of it.

2\. You are growing into a large business and you have reached the point that
you are attracting attention from patent trolls and other large, patent-
holding entities. At this level, the quality of the patents usually doesn't
matter nearly as much as the quantity. It becomes a "my stack is bigger than
your stack" type of negotiation, and having a very large pile of manure is
useful because people are forced to assume there is a pony or two in there. If
you want to see an example of a company that has recently had this
realization, look at Huawei and compare their total number of issued patents
with their total number of patent applications.

3\. You are inventing a completely new type of hardware device and you also
file for patent on the software that interacts and enables it.

Thus, if you are a startup, then (IMO) it rarely pays to file for patents
unless you a) expect to get really big, or b) want to sell out to a big
company. This is a special case of #2. Otherwise, execution trumps IP.
Startups are just not big enough to worry about (or be targets).

It also may pay if you are creating a completely new market - think RSA. This
is just a special case of #1.

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tptacek
No, I don't think so. My experience, having filed patents for fairly large
companies with very well-respected IP attorneys, is that the process takes 6+
years to complete. That's probably outside the window of execution for most
startups, and _certainly_ outside the window of planning.

Furthermore, patent litigation adds a 1-2 year delay to resolving IP issues,
and, in the event you actually litigate, adds a 6-7 figure price tag to the
event.

With a very few exceptions, most startups proceed as if patent licensing
issues were approximately the same kind of risk as lightning strikes. You
would have a hard time convincing most savvy founders that any package of
patent licenses was going to protect them from lightning strikes. Just having
to go to court is a game-ender for most.

Patents are a marketing asset for startups and little else. There is only
marginal value in marketing the patents you've merely licensed.

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kizel
Interesting comments, thanks everyone.

So, is it that generally start-ups just don't patent?

We've discovered two main things: Generally when companies start getting
traction, they become a target for patent suits (i.e. Foursquare). Secondly,
for start-ups that do have patents and end up going under, their IP is often
sold to trolls and eventually can circle back around to hurt other start-ups.

We want to help stop this by building a crowd sourced defensive patent pool,
where everyone who does have patents comes together and agrees they will not
assert against each other. Assuming start-ups have patents, is this not
something they want? Or do we not have the right model?

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tobylane
You can't avoid them, you won't be hassled for using them, and it's rarely
worth your money either fighting bad patents being used against you, or filing
your own patents.

Your idea is good, but unless you get IBM, Google etc on board it won't be
many patents. Patent trolls are invisible till they start to money-grab, and
would never join. It's a bit anti-capitalism, so good luck, please do succeed.

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g123g
Coincidentally I was watching this video from Google I/O yesterday where
someone asked Joe Kraus a very similar question and his answer was a clear no.

[http://ontwik.com/startup/how-to-get-your-startup-idea-
funde...](http://ontwik.com/startup/how-to-get-your-startup-idea-funded-by-
venture-capitalists/)

