Rule 14: Killer Lessons from the popular Shark Tank TV show

“Rule 14: Patents are extremely valuable.” Patents are an investment in your business. To potential investors or lenders, they evidence several things:

  1. Your belief and commitment to your product and your business (you believe enough to put your own money behind it).
  2. Good business sense because you took the proper steps to ensure your market share is protected.
  3. There is something unique here because not all ideas qualify for patent protection.
  4. The investment is in something tangible, there is an asset that can be sold or licensed for royalty revenues.
  5. The idea has been commercially developed to some degree; it is more than just an idea.

You should use a patent professional to file a good quality patent application. Skimping here can be costly in the long run. I can’t stress enough that you get what you pay for when it comes to patents. Using something like an online legal service provider for $99 will not do the trick in most circumstances. The patent will be reviewed by several attorneys during due diligence investigations. If it is weak and not well written, you will be overlooked when you undertake fundraising activities. You should budget $3-$10,000 for a typical patent application, depending on the invention complexity, patent type, and technology area. Software, electronic, and chemical inventions are usually more expensive than mechanical patents. Patent rights last for 20 years for a utility patent and 14 years for a design patent. Amortizing the cost of the asset over its life cycle, patents generally cost less than $2,500 per year, and often, less than $1,000 per year even taking into account patent maintenance fees. This is a very cost effective protection for the strong patent rights accorded to patent holders.