If you were to ask me what I thought about patents, I wouldn’t have had much to say for most of my career.

My Experience with Patents

In my last 20+ years as a software engineer, my encounters with patents have been few and far between.

I spent a few years at an implantable medical device company where patents were likely important, but they never made headlines in our company-wide meetings. (I just checked and this company has over 1,500 patents.) Our successes and failures were always attributed to regulatory approval and the merit of our technology in the market.

Later I was involved in a startup in the airline industry where we filed one patent to protect our unique technology. The company failed after only having a single pilot customer. Although many airlines admired our technology, they weren’t willing to take the risk of being first to adopt it. And the established incumbents never tried to copy us.

I’ve worked at other startups where patents were never mentioned. When we experienced success, setback or failure, patents were never a factor anyone acknowledged.

Now I work at a company seeking to revolutionize patents from the ground up. Our thesis is that many companies can leverage patents in ways that aren’t currently being done.

I’ve learned a lot, and I’d like to share my reactions to common sentiments about patents. Let me sketch the landscape, and I’ll close with thoughts on why patents are underappreciated.

The Typical Point of View

It’s easy to see why interest in patents might be minimal.

“We’ve Got Bigger Fish to Fry”

For a venture-backed startup, the narrative is simple: have a great idea, build a great product, get traction, raise money, grow, and exit. If you’re lucky, you get acquired. If you’re really lucky, you go public.

That’s the cartoon version. The reality is that most startups fail. Even those with initial product traction rarely achieve a successful exit or IPO.

There are countless ways to fail. You can find product-market fit but fail to adapt as the market evolves. Revenue concentration can come back to bite you. A strong seed round doesn’t guarantee success in your A round. Great early hires can’t prevent founder conflicts. A great product can fail to scale with reasonable CAC. The list goes on.

In this context, patents are often seen as a distraction. There are bigger fish to fry. Why spend time and money on something so uncertain and far off? When patents are pursued, it’s usually just to address immediate risks to your product. Even then, it’s often seen as a necessary evil.

“Investors Don’t Care”

Even if you try to make a case for patents, someone will remind you that investors don’t care about them. If patents were important, investors would care. But they don’t. So why should you?

It’s not irrational to focus on investor concerns. You’d face headwinds if your priorities didn’t align with capital allocators. You might say that what matters is what helps you raise money. If you have to pick battles, pick ones that help you raise money.

That’s not to say investors are always right. They’re wrong often. But you can’t ignore them.

If you bring up patents, you’ll hear common themes. Patents are just a way for big companies to bully smaller ones. They’re another way for lawyers to make money, and they distract from building a great product and company.

“It’s All About Execution”

There’s a strong sentiment that patents are overrated. The idea is that execution matters more than ideas. Patents protect the (less important) ideas but offer no protection for the (more important) execution.

Some of tech’s strongest voices dismiss patents. Elon Musk famously decried their role in his companies, seeing their disclosure as giving away secrets to Chinese competitors. Chamath Palihapitiya, a former Facebook executive and current VC, said that “intellectual property has never been worth less than it is today.”

“The Feedback Loop is Too Slow”

With any new venture, learning is crucial. You must learn about customers, market, product, team, competition, investors, partners, regulators, and more. Even industry veterans need to learn and adapt quickly.

Smart startups focus on the velocity and quality of their feedback. The faster the team learns, the better. Teams often prioritize activities based on potential learnings.

This is where patents become problematic. The feedback loop is too slow. It can take years to get a patent granted and years more to see the outcome of a dispute. Meanwhile, you’re not learning.

It’s unreasonable to expect a startup founder to learn enough about the patent system to make good decisions. Unlike areas where founders can get quick feedback, the patent game takes too long to play out. It’s no surprise founders choose to ignore patents.

“You Can’t Trust a Patent Lawyer”

I’ve heard this several times. Patent lawyers are like other lawyers - they’re just trying to make money off you. They’re not really on your side. They just want you to file more patents so they can bill more.

We can’t ignore that a simple measure of success for a patent lawyer is the number of patents issued. A proficient lawyer can increase the odds of a patent being granted by narrowing the scope of claims. But this isn’t necessarily in the client’s best interest, as it means less coverage.

The average startup founder can’t evaluate a patent lawyer’s work. Patents are difficult to read, and the implications of any claim may not be obvious. It’s asking a lot for a founder to stand behind a patent’s value when they can’t understand it themselves. Further, no single patent can be valued independently - its value depends on the state of the art, competitive landscape, regulatory environment, and more.

“Patents Are Expensive”

For a startup, money is always tight. Patents are expensive. It costs money to create, prosecute, maintain, and enforce patents. You have to be willing to spend money to play the game.

If it were a one-time cost with a 50/50 chance at payoff, that would be easier to swallow. But even if you get a patent and find an infringer, you might be intimidated by their deep pockets.

“All the Good Patents Are Taken”

This is a common view. The patent landscape seems so crowded that there’s no room for a startup to get a valuable patent. Even if you did, it would be easy to design around.

You might have worked in an organization that files patents. Looking at colleagues’ granted patents, they may have seemed trivial or too esoteric to be useful.

If this were representative of the patent game, skepticism would be justified. But it’s not. The patent game is about strategy, positioning, negotiation, and some luck. It’s a game you can learn to play.

My Argument in Favor of Patents

I’ve painted a bleak picture of the patent landscape. The prevailing sentiment in startups is that patents are overrated. But there are reasons to reconsider.

Pre-Conditions

First, you need to be working on hard problems. The harder the problems, the more likely there are solutions worth protecting. The solutions need to be hard to come by and non-obvious.

Second, there’s better alignment when the company is venture financed and investors have an appetite for a hedge.

A bootstrapped, cashflow-positive business is probably less suited for serious patent protection. The relationship between financing/growth strategy and patentability is more correlative than causal. If a business idea warrants VC investment, it’s probably because it’s a big idea you can’t bootstrap. You want capital to take a solid swing, knowing the odds are against you but the payoff is big if it works.

In such settings, you’ve likely assembled deep thinkers capable of solving hard problems. One natural byproduct is coming up with ideas worth protecting.

Third, your company needs to afford the game. You need money to file, prosecute, maintain, and enforce patents. If you’re bootstrapping or on a shoestring budget, you’re better off spending elsewhere.

Fourth, you need a team of creative, competitive and forward-thinking individuals. Because the problems are hard, you spend time understanding where the industry is going and how to get there first.

The Argument

Every startup faces difficult choices. As I’ve argued before, task selection is critical for founders. Your resources—time, money, and people—are limited. You must choose where to spend them.

In the typical approach, there’s an incremental path to de-risk your product and technology ideas. You can use competitive analysis, customer interviews, market research, academic literature, wireframes, and prototypes. The idea is to learn by taking small steps forward.

You must decide how big of a bite to take. Depending on your risk appetite, you might try something simple or more ambitious. Trying an idea may require R&D, engineering, and design resources just to reach an MVP. Then you’ll engage sales and marketing to test the market, followed by customer support and operations to scale and retain customers.

In brainstorming, you often determine the next logical step. If you want to try something new, you must assess if it’s within reach.

If you have many potentially big ideas, you may not have capacity to pursue them all. You might have to choose which ones to leave on the back burner.

Sometimes the most compelling “homerun” ideas get left behind because they’re too risky - too big of a bite or too far into the future.

In this context, patents can be powerful. They can help you take a big bite and potentially leapfrog competition. They can stake out a position that’s difficult to dislodge. They can signal to the market that you’re serious about your technology and its future.