When an entrepreneur’s efforts to launch a small business include an invention, seeking patent protection may be in order. This is not always a seamless process, and there has been a disturbing trend of “patent trolls” eager to try to squeeze money out of businesses that want to avoid lengthy and costly litigation. But for small businesses pondering patents, there can be benefits. Here’s a look at three key benefits:
1. Theft Prevention
This is the primary and obvious reason for seeking a patent.
The Small Business Administration (SBA) indicates that this protection means that “others can’t make, use, sell, or offer to sell your invention in the United States or import your invention into the United States.” However, the SBA states on their website that many small businesses can be at risk, because entrepreneurs may not be well-versed in patent protection.
2. It’s a signal of quality
Businesses with established patents may have a better chance at attracting capital investments.
According to a 2008 Berkeley study Patenting by Entrepreneurs: An Empirical Study, which found that 67 percent of venture-backed startups reported that patents had been vital for them in securing investment. While 40 percent of all startups held patents, 80 percent of those receiving venture capital investment, owned patents.
3. It can boost market share
A brilliant invention may not get its due without a patent.
Pridham and Sheafe explore this in their Forbes piece by focusing on an inventor named Carles Puente. He invented “a mobile phone antenna, based on principles of fractal geometry,” they write, which allowed phones to shrink in size.But his Spanish startup, Fractus S.A., couldn’t possibly manufacture enough fractal-based antennas for the 1.5 billion smartphones sold each year. Thanks to its patents, however, Fractus was able to license its technology to 90 percent of the world’s smartphone makers.
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