As we have been building our Maptiks product, our viewpoint on IP has changed significantly. This is a post about our IP journey to date.

Firstly, consider that its not about you.

At Sparkgeo, in our journey with Maptiks my opinion on Intellectual Property (IP) has changed significantly. My initial reaction was “who cares?” We didn’t have near enough cash to defend a patent, and we didn’t really have the cash available to go spending it on lawyers fees to get the patent in the first place. Our plan was to stick to ‘trade secrets’, not waste our time on preparing a patent filing, and assume that the web moves so fast that a patent quickly becomes aged. Our IP strategy was one line:

Move fast; don’t let them catch up

I don’t believe we are alone in this opinion. Over the past few months as we talked with various investors, IP has became a more persistent theme. Now, we haven’t taken any of the investment on offer (as of publishing). But we have filed for our patent and here is why: we realized that…

The patent is not for us

The patent does 3 key things for a startup:

    1. It demonstrates that you have done a ‘real thing’
    2. It indicates some level of value
    3. Its sets the stage

Validation

These items might seem somewhat intangible. In our times of lean startup they might also feel utterly superfluous. However, it is important to remember that the community is looking to you to perform at your chosen venture. Being able to demonstrate that you have built something novel has enormous value in the the eyes of both customers (who give you money for your thing) and investors (who give you money to find more customers for your thing). An external validation of your technology is useful here. No one like the feeling of being sold snake oil, but the patent demonstrates that your technology has real weight.

Valuation

Valuation is a somewhat obvious argument, but it is certainly worth mentioning. On the assumption that your company is looking for investment, then getting a patent beefs up your valuation. This means typically you will get better value from your investors. In addition, your potential investors will feel more comfortable with the magic story you tell of your technology, because the patent office corroborates your story. In a pre-money calculation a patent can be worth $50 – $100k, depending on who you talk to, and indeed what country you are in. So in terms of investors the patent both validates your technology and gets you better value from the investment.

The stage

The stage is where you present your idea to your community and the (potentially larger players) start moving on it. Assuming you are doing something new and different and that you prove your thesis in terms of customer uptake, you will be in a position to be copied. Is your technology something that really can’t be copied?

As a startup with limited revenue, you likely can’t sue a large company for any kind of patent infringement (we talked about that above). That would be unwise and a quick route to insolvency. However there are other tools available, and being able to use your IP as a bargaining chip might provide a much quicker discussion on either acquisition or licensing.

The point here is that the patent opens doors. It is a route to opportunity in the face of what might seem like enormous and heavy-weight competition. In the event of discussions over technology and IP, your trade secret is worth nothing if any of your engineers are head hunted, but your patent remains hugely valuable.

So no, it’s not necessarily about you, or what you can do with the patent. It’s about how that patent can be leveraged by your ecology of partners, whether they be investors, licensees or your potential exits. If you are genuinely doing something new, then your patent is an enabler of growth for your company.

All that said, the patent is not without cost, for us it has been about a month of burn, so consider it carefully, as you would any investment in your company.

For these 3 reasons, we have decided to take the investors’ advice and peruse a patent, even though, as yet we haven’t pursued their actual investment.

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