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Patent expert shows surprising way to startup success

From time to time, I’ll be posting the views of patent experts. I’ll be looking at their opinions on the value of patents for startups. Of course no post will be complete without best practices for startup patent strategy.

By “patent expert”, I don’t only mean patent agents and attorneys – those of us who spend our days writing and defending patents – but also experts on how patents can benefit startups.

 
 
 
 

ENTERPRISE DATA STORAGE – OH YOU SEXY THING

Today’s post is about the views of the latter type of patent expert: Satyam Vaghani, who is co-founder and CTO of PernixData. PernixData is an enterprise storage startup that was recently bought by Nutanix. Unsurprisingly, PernixData is also the proud owner of three published US patent applications on “Distributed caching systems and methods”, of which the latest is US20160048344.

PernixData’s belief in the power of patents to increase startup valuation is clear in a fascinating article by Satyam. He details how patents have rocked the world of data storage – leading to wild technological and financial success for the companies that invented them.

Enterprise startups should take note when planning their own patent strategy: according to Satyam, the entire data storage industry is defined by four world changing super patents.

Satyam selected these patents based on their coverage of sexy data storage technology, each of which changed the data storage world when it emerged – and on the “significant business success for the companies where they were invented”.

Read the article for the entire list – I’ll just note the amazing financial and technological success of one of the four companies mentioned: Isilon Systems. They were granted US Patent No. 7,146,524 in 2006 and were bought by EMC in 2010 for $2.25 billion! Now their game-changing technology is a backbone of Hadoop and is used in many data storage applications.

WHY PATENTS = ENTERPRISE STARTUP SUCCESS

Patents were used by each company in the article to defend their technology. Each company became much more valuable because of its patents. Isilon Systems for example had many US patents on its technology in addition to its game changing patent.

PernixData also has pending patent applications. These patent applications aren’t yet granted patents, yet they still increased the valuation of the startup. So just filing for a patent is enough for a startup to benefit from the power of patents to increase its valuation.

Congratulations to Satyam Vaghani and PernixData all around – on recognizing the value of patents and on being successfully acquired!