What's a good amount to invest on trademarks and patents
What you need to know (in a nutshell)
- Early business founders may not have the funds to protect their IP with a patent or trademark and should carefully consider when it is essential to do so.
- Registering a trademark before launching the business is important to protect the brand and avoid wasting money promoting a brand that infringes on someone else’s rights.
- Before consulting a patent attorney, entrepreneurs should research their idea to ensure it meets the criteria for patentability and search for conflicting patents using Google Patents to save on legal fees.
Full Article
Picture this - you’re launching a new business next week and have invested heavily in the brand. How do you go about securing those intangible assets?
Early business founders often lack the funds to protect their IP with a patent or trademark. It can be difficult for them to decide when it’s essential.
When I first started my business, Posse, investors urged me to patent our revolutionary concept. This was a costly and time-consuming process but necessary for their peace of mind - something I didn’t understand back then. We spent over £6k with the lawyer on drafting applications and searching databases so we could protect it.
Eleven months on, we had to adjust our business plan. Our patent attorney reminded me that the provisional patent was nearing expiry and registering a full one in crucial countries would cost $70-80K.
After I clarified the patent was no longer applicable, he proposed we talk over coffee. We deliberated on a fresh business plan and he recommended we begin anew with this new idea.
Feeling trapped, I had already invested in a patent. Knowing shareholders value patents, I reluctantly accepted spending an additional $8K on another provisional patent we wouldn’t use.
Secure trademark registration
Launching with a smaller budget, I aim to safeguard my IP without excessive expenditure at the outset.
I began by searching for trademarks in available databases, discovering a few companies with similar names to mine but which operated in different sectors. I then contacted Ben Lehman of Applied Marks for guidance.
He stated that the trademark office will assess trademarks and their purpose. Utilising a similar name to an existing company is permissible, so long as it’s for something different and won’t cause confusion. As an example, several firms have ‘Apple’ in their title; one focuses on computers whereas another may do oil exploration.
Lehman suggests to register a trademark before launching the business, covering only what is necessary. Adding classes and jurisdictions can be done afterwards as funds become available; many entrepreneurs opt out of registering due to cost.
He advised registering as much protection for their business before launching, warning that failing to do so could mean wasting thousands promoting a brand infringing on someone else’s rights.
Patents
To protect my new business model, you may consider a patent for the technical elements of it.
He outlined three essential criteria: patentable subject matter, complete novelty and an inventive step that is not obvious to experts in the same industry.
Establishing patentable subject matter is challenging in Australia. Kevin Ashby suggests start-up entrepreneurs do their research before consulting a patent attorney, so they can ensure the invention meets the eligibility criteria and to perform their search for conflicting patents using Google Patents. Doing this themselves saves money on legal fees.
Drafting and registering a provisional patent for your invention will cost between $8K to $15K. This provides 12 months of protection, during which time you can refine the idea and apply for full patents globally.
After registering my trademark in one class for $720, I realised that my idea lacked the ‘inventive step’ needed to be patentable. So, instead of wasting time and money on unnecessary IP protection again, I did some online research and basic trademark registration - ensuring ample coverage for my new business.