Competition in the world of patents is inevitable, though it sometimes becomes a little unbalanced. Much discussion still takes place about whether patent holders abuse their rights to prevent a fair competitive market. While you'll find many arguments on both sides of the coin, it's always worth noting that healthy competition helps bring a stronger entrepreneurial spirit.
One thing you need to know if you're inventing something is competition is a major race in patenting. With "first to file" rules now in place for several years, reaching the finishing line first is essential to gain full protection.
Some of this might feel intimidating, yet the complete intention behind patents is to bring healthy competition. It's worth looking at what the true philosophy is behind patents and how you can ward off competition by taking some major steps.
Defending the Patent System on Innovation
As the World Intellectual Property Organization notes, the patent system has a specific design to foster innovation and adhere to fair market rules. Because of this, the entire patent system adheres to making sure anyone filing a patent only receives one if their invention is for the public good.
In many ways, this adds to the competitive entrepreneurial process since it forces inventors like you to work harder toward creating value. Novel creations are the true backbone of how we advance technologically, even though it's possible to patent things improving on existing products.
Thinking more originally is ultimately going to lessen competitors from creating something similar to your idea. Still, the likelihood someone creates something similar is great in a world burgeoning with creativity.
This is why time is of the essence in patenting your invention before competitors go after you. Much of this has to do with attracting venture capitalists, something that's just as competitive as receiving your patent.
Venture Capitalists Find Patents Attractive
It's not hard to see why venture capitalists ask whether you've patented your invention first. If you haven't bothered to file for one yet, you're maybe already too late. In many cases, competitors block other companies from being able to go to market if the former was able to get a patent earlier.
You do have a one-year grace period for filing patents in the U.S., but it can take several years before you even obtain one from the USPTO. Having one pending is still going to matter to a VC interested in helping fund your fresh idea.
Once they realize you're going to receive a patent soon, they'll be more confident to invest. They'll know a competitor can't sue you, which otherwise could create litigation expenses and potential financial jeopardy down the road.
The Competition in Being Acquired
Another competitive act you have to fight against with patents is the possibility of being acquired by a major company. Patents automatically give you enough value where a company could benefit by partnering with your own business.
They may want to do this for technology advancements, or just to safeguard themselves from their own competitors. Nevertheless, they won't do this if you're lax on IP protection. You should also show your patent descriptions to the company so you prove your inventions are novel enough without possible USPTO refusal.
A lot of good examples exist in the corporate world, including Nest's technology being acquired by Google back in 2014. It's worth noting, however, large companies often acquire startups, just to obtain the latter's patented technology.
Putting together a comprehensive patent portfolio gives startups like yours more leverage in the business deal so the big guns don't dictate the terms.