Patent Protection: The Good, the Bad, and the Ugly

In theory, a patent is the best way to legally protect your innovation. A patent grants you exclusive rights to your invention for a period of time, preventing others from making, using, or selling it without your permission. 

In practice, things are more nuanced. The reality is that a patent isn’t iron-clad protection, and you need to be prepared for the practicalities and limitations.

Let’s look at the good, the bad, and the ugly of patents so that you know what to expect.

The Good: The Benefits of Patents

We’ll start with the good. While patents are not perfect, they do offer benefits. If push comes to shove and you find yourself in a legal battle, you will need a patent to have any real chance of winning. 

However, you don’t need to rush out and file a full-disclosure patent right away. In fact, you shouldn’t do so until you have a clear idea of what you’re doing and a fairly solid prototype. Instead, at earlier stages, you can file a provisional patent. It’s fairly cheap—$130 for a small entity—and you can even file it yourself, though it’s admittedly a bit of a pain. A provisional patent establishes a precedent date and gives you one year to continue developing before you file your full-disclosure patent.

There’s also anotherAs we’ll get into, though, legal battles are not ideal, so let’s talk about a different benefit to patents beyond legal protection: assurance for investors.

Investors are particularly wary of potential infringement lawsuits, as these can severely disrupt anticipated cash flow and undermine their investment. So they will almost always look for patents as proof of original ideas. The patent office is supposed to rigorously check for similarities (as to whether they actually do so is again a matter of nuance). Still, a granted patent provides some assurance that you haven’t infringed on existing IP and gives investors assurance that you have an original idea worth investing in.

The Bad: Having a Patent vs. Enforcing a Patent

The key issue with patents is that having a patent and enforcing a patent are two very different things. It is incredibly rare for individuals or small companies to sue over patent infringement because enforcement is prohibitively difficult. 

First of all, you have to prove financial loss, which can be especially difficult in the early stages of innovation. Another company could be violating your patent, but if you aren’t yet selling much of your product, you can’t say, “Hey, you’re stealing our business!” because they’re not. They may have stolen your product, but they haven’t stolen your profit, because you’re not at that stage yet. Unless their stolen product manages to take off substantially where you haven’t yet made traction, there won’t be anything for you to sue over.

And when we say “substantially,” we mean it. It’s time to get into the ugly side of patent enforcement: the money.

The Ugly: The Deepest Pockets Win

Even if you can prove financial loss, defending a patent is expensive and time-consuming, and there’s no guarantee you’ll win. 

Here are the stats about the average cost of patent litigation, tied to the amount of damages at stake, as reported by the American Intellectual Property Law Association: 

Amount of damages

Average cost of litigation through trial and appeal

Less than $1 million

$900,000

$1 million to $10 million

$1.6 million

$10 million to $25 million

$4.5 million

Over $25 million

$5.125 million

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With the high legal costs, patent litigation only becomes profitable when a large amount of damages is at stake. With smaller amounts, you can end up paying just as much and possibly even more in legal fees, so it’s often not worth pursuing litigation. 

Also keep in mind that these cases take years to resolve. This means that the winners in patent infringement cases tend to be whoever has deeper pockets, because they’re the ones who can afford to delay and defend. So if you’re a little guy up against a larger company, good luck—you’ll need it. 

Better Safe Than Sorry

You’re better safe than sorry, so yes, you should still go ahead and get your patents. However, without the ability to enforce your patent, its protective value diminishes significantly, so don’t rely on it solely.

Keep your intellectual property (IP) secret when you can, use non-disclosure agreements (NDAs) whenever possible, and work to get your product into the market and adopted by customers quickly. Seek to win in the marketplace rather than the courtroom.