For a technology driven start-up or entrepreneur, patents form the most important intellectual assets. They provide the necessary exclusivity, and competitive advantage to start, build and grow the business. Patents are also considered as important assets by venture capitalists and investors before making investment decisions. So, every technology driven start-up must ensure that its technologies/inventions are properly protected under the patent regime.
Once a decision on patent protection is made, the start-up company must file a patent application as soon as possible. Depending on the status of the invention and financial resources, the company may file a provisional or a complete patent application.
Filing of a provisional application provides the following advantages to a start-up company, or entrepreneur:
- The application can be filed in a day or two as claims need not be included in it;
- The cost for drafting a provisional application is much less than that of drafting a complete application; and
- Filing a provisional gives twelve (12) months time to the start-up company to file a complete application, nationally and internationally, during which time the start-up company can take necessary steps to raise funds or test the business value of the invention.
Having said that, a complete specification may be filed if resources is not an issue. Filing of a complete patent application provides the following advantages:
- The patent application will be examined earlier than if a provisional application is filed;
- The patent application would be granted earlier and legal action maybe taken against competitors violating the start-up’s patent rights on grant; and
- The value given to a complete application is higher than that of a provisional application.
A start-up company may also file a PCT application if the company wishes to acquire international patent protection at a later stage. The PCT process is an international filing process, which allows the applicant to file national applications in chosen countries after twenty or thirty months. Filing a PCT application is more expensive than the Indian national filing but provides the following advantages:
- It gives the start-up twenty (20) or thirty (30) months time to test the business or market value of the invention and also to make a decision on the countries in which the company wishes to file patent applications;
- Provides the start-up company with a formal search and patentability report that can enhance the value of the patent; and
- Gives additional time to raise funds or make business decisions.
Based on the financial resources of the company and business strategy, a start-up company may safeguard its rights over the invention by choosing any of the aforesaid filing options.