Sunday, April 15, 2007

Provisional patents for dummies

Most developers I know dream of founding a startup company, and many of those dreamers want to start by raising money from various sources, including VCs, angels etc.
The problem begins with the need to expose your idea to many potential investors, increasing the possibility of someone stealing it. What's worse, if you do something that may be considered as publishing the idea, you'll never be able to patent it in the future!
You can use NDA for protection - but most VCs will not bother signing it, and after all, you need them more than they need you....

Enters patent protection.
Actually, approaching investors with an existing patent(s) is considered a plus, showing you have a patentable idea and that you took the time/effort/money to register it.
The trouble with patents is the initial cost, composed mostly from the patent attorney fee, which is about 3000-5000$ in Israel. You also pay a registration fee of 250-1000$, depending on the type of the patent (local or international).

A cheaper tool is the provisional patent.
If you ask a patent attorney on this option, you'll probably get answers like "it's like no protection at all!". As with most answers from lawyers, while this answer is not completely false, it's also not true.
Unlike a normal patent, you can apply for a provisional patent yourself with no need for professionals and with only a small fee of 100$. Theoretically it allows you one year of protection until you file the actual "real" patent application.
The problem with this, and the reason the lawyer's answer is partly true, is that the provisional application is not verified at all.
Combine this with the fact anyone can write the application and you can see it's very easy to file a poorly written provisional patent, one that cannot serve as a base for the actual patent, basically meaning you think you are protected while you are not.

The way to solve this problem without avoiding this tool altogether is to hire a patent attorney to write/edit the provisional patent application.
This way you get a professional to create and verify the provisional patent, but the fee is considerately lower, costing 800-1000$ in Israel, and as mentioned before, the registration fee itself is only 100$.

I know there are people who oppose the idea of patents in the software industry, and in the case of large corporations taking over basic ideas I agree with them, but patents have value for entrepreneurs trying to raise money.

The facts in this post are based on my knowledge of the patent system in Israel, and may not be relevant in other countries (although I suspect it's the same deal).

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