Technology Start-up Entrepreneurs and CEO’s: If Your Goal is Investment or Acquisition by a Big Company, You are Probably Patenting the Wrong Things

Let’s say you have worked diligently for several months of weekends to get your yard perfect–and it is perfect. When you finish the yard, you realize that if someone walks on your lawn, perfection will be lost. So you put an expensive fence around your lawn–and it is the best expensive fence you can buy: a virtual masterpiece. But what good is the fence if no one wants to walk on your lawn anyway? You wasted all that money on the fence.

The great majority of patent seekers (including those at otherwise sophisticated large companies) believe that patents are best used to keep others off their “technology lawns”. As such, patents are generally focused inwardly–that is, on the patentee’s own technology or products. This is known as “defensive patenting”. Defensive patenting is a tried and true patent strategy, but it can be a poor choice for companies that wish to obtain investment from or be acquired by bigger players. Like the example above, if these bigger players have no interest in walking across your technology lawn, your defensive patent fence is a wasted expense.

So how does a technology start-up company such as yours get the attention of these big players? It is quite simple–by putting a patent fence around the big company’s technology lawn. When properly formulated and executed, this strategy (which is not surprisingly called “offensive patenting”) makes technology or products patented by your company an attractive target for a bigger player. Your company’s patent(s) will reduce or prevent the bigger player’s free movement in its desired business space. Such a savvy offensive patenting strategy effectively requires the bigger player to ask your start-up company for permission to play on its own technology lawn. Your start-up company can provide that permission in the form of a licensing of the patent(s) at issue or by sale of your company to the bigger player. Either way, the your start-up company is benefiting financially from this smart offensive patenting strategy.

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