So...about those patents

In the realm of all things misunderstood for rural startup ecosystems, patents must be in the top 3. And yes, that misunderstanding is very much a rural entrepreneurship thing.

When I work with startup communities in Austin, San Francisco and London, patents don’t come up much. The focus is on getting to market as quickly as possible. This means creating a product that delights customers and solves a problem that keeps customers up at night.?

But something strange happens in rural communities. About a year ago, I was at an economic development meeting to discuss how to grow more companies in the region. I gave a talk on growing an ecosystem, then watched in horror as the entire discussion quickly morphed into a talk on patents. It was as if people thought patent and company were the same thing.?

I want to be clear, patents are super important. The ability to protect an invention is crucial, especially as it pertains to products that are highly unique and novel.?

There are two core problems with the way rural communities emphasize patents: what patents actually do, and how patents are defended.

Let’s start with what patents do. They protect someone’s invention from being stolen or copied. But that’s not how rural communities perceive them. Too often, people in rural communities see patents as a safe zone, as if they create an invisible force field around the entrepreneur, allowing them to build their product in an easy, stress free environment where they don’t have to worry about competitors, and customers will come to them like sailors to a siren.

In other words, starting a company is scary. Founders and ecosystem leaders have a tendency to view patents as a way of making a company launch less scary. But that’s not what they do.?

Even if founders get a patent, they will still have to deal with competitors. Their product might be a solution, but it’s doubtful that it’s the only solution (yes, I realize I’m going crazy on the italics).

So this is the first problem with patents. They allow founders to be lulled into a false sense of security. Founders too often believe that once they receive the patent they won’t need to operate with the all-consuming hustle necessary to grow a successful startup.?

The second problem is defending the patent. If a huge corporation sees that a technology is patented, will they automatically cease and desist? Maybe, but probably not. Why??

Patents are not a brick wall, they are more of a wire fence. This means they must be enforced. Enforcement means taking the company to court. Going to court will almost certainly be expensive, and if it’s against a multinational corporation, “expensive” might mean something in the neighborhood of $15 million.?

And that multinational corporation knows that. If they want it badly enough, they know a founder in a small town with no legal team doesn’t have the funding at their disposal to win such a battle. That alone is means for them to proceed, regardless of the patent. Imagine the multinational marching into the field of battle with 200,000 hardened knights, and the founder with the patent engages them with about 20 newly recruited soldiers. The founder just doesn't have the resources.

Finally, applying for patents is a huge drain of time and resources. Founders should be dedicating that time to selling and building instead.

So what should a founder do? Not even try??

I wouldn’t advise that either. Patents certainly have a role, and investors will look favorably on a startup with a patented technology. My advice is to have a partner in the region who specializes in patents.

When I was leading the IDEA Hub Accelerator, our partner was WiSys. The team at WiSys were seasoned and skilled at filing and protecting patents, as well as tech transfer. Unlike that solo founder with no resources, WiSys really could engage an infringer in battle, and they could win. They have a user-friendly initial disclosure process that was quick and easy to understand. From there, they were receptive and great partners.?

Most university systems will have some form of tech transfer and IP protection similar to WiSys. Find that group, and find a way to partner with them, and when a founder in interested in a patent, hand them off to that partner, then keep them focused on growing a great company.?