Recently, I have unfortunately witnessed several bankruptcies up close. It is always sad to see a promising startup that began with enthusiasm eventually go under. The pattern is often the same: the company raises funding, develops ambitious plans, and files patents to protect its innovations. But then the real challenge begins. While obtaining a patent is often a hopeful start, the cost of managing a patent portfolio can quickly spiral out of control.
A complete development process can easily take ten years, and every year new inventions need to be protected with patents. You choose to apply for patents in multiple countries just to be on the safe side. But what many companies don't realize is that the cost of those patents keeps rising every year. At some point, those costs can get so high that they become an unsustainable financial burden. And then comes the crucial moment: let go!
Evaluations
Large companies actively engage in patent portfolio management. They regularly evaluate which patents are still relevant and which are worth maintaining. These evaluations usually take place every two years. If a patent is no longer strategically important, it is simply abandoned. I advocate that smaller companies follow the same approach.
It is critical to regularly look at your patent portfolio and ask yourself if the knowledge you have captured is still essential to your business. Is it not? Then just drop it! This is a way to use your financial resources better and keep your business healthy in the long run. Is your patent right being challenged, and doesn't defending it seem worth the cost? Also then, let it go!
Sell
Another smart strategy is to sell patents you don't use but that have interest from other parties. This can make your company money immediately without losing important technology. Do you still need the technology, but it is not critical to your core business? Then, consider selling the patent and arranging a license for your own use. That way, you benefit financially while still maintaining access to the technology.
Another important consideration: are you about to apply for a new patent? Then think carefully about what you actually want to achieve. Capturing your invention is not always the best strategy. In some cases, publishing your innovation in a scientific journal or on another platform can be just as effective. This can even help attract potential investors and prevent a competitor from applying for a patent and getting you into legal trouble.
In short, not filing for patents and cleaning up your existing portfolio can give your company more budgetary leeway. This may seem like surprising advice from a patent attorney, but ultimately, it is in everyone's interest to free up sufficient resources for innovation and product development. After all, we all want to prevent bankruptcies.