What Happens If You Don’t Patent Your Invention?

What Happens If You Don’t Patent Your Invention?

I was speaking with a potential client recently who asked what would happen if he chose not to pursue patent protection for a key innovation his company had developed. My initial response was that the better question is not what happens if you don’t, but why so many companies decide that they should.

This is not just a matter of opinion. A survey published in the Berkeley Technology Law Journal examined why startups choose to file patent applications. The most common reasons included preventing competitors from copying their innovations, improving the likelihood of attracting investment, enhancing prospects for a successful exit (such as an IPO or acquisition), strengthening brand and product credibility, improving negotiating leverage with other companies, reducing the risk of infringement claims, and creating potential licensing revenue streams.

The survey also found that approximately 80% of venture capital-backed companies had patents or patent applications. In other words, companies that are serious about growth and value creation tend to view patents as part of the overall business strategy.

Patents are not always necessary, and they are not right for every situation. But choosing to skip them (or waiting too long) can mean missing out on meaningful strategic advantages at critical stages of growth.