How important is the patent?
A patent. ‘Have you got one?’
It’s a question that one startup tells Wamda is asked a lot, too much in fact. So, are they worth the hassle?
The short answer is yes. You’ve got this great idea, you reckon it could get you on a Forbes list of some kind and you want to protect it.
You need to not be so hasty though. According to The Economist, 40 to 90 percent of patents filed are never exploited or licensed out by their owners.
With a history that goes back, apparently, as far as 1449 when King Henry VI of England issued a patent to a man’s stained glass manufacturing business, the patent is an intrinsic part of business. But they are not the only key part.
Registering a patent
For Ziad Abu Ayyash’s medical hardware Sannula, a patent was the only way.
“You should never wait, because the moment you think of your idea there are more than 100 others around the world with the same idea,” he told Wamda. “If you think, then you are late.”
For Abu Ayyash it’s a sure way to secure the market, but not all others are in agreement.
Hassane Slaibi of Lebanese startup Band Industries believes trademarks are far more useful. “This gives you a good level of protection for something meaningful,” he told Wamda.
Band Industries knew where their biggest markets would be and so in 2009 they set about the process of filing for a patent. However, it’s not simply a case of sending off the specs of your amazing piece of hardware.
For example, Lebanon is not part of the Patent Cooperation Treaty (PCT). If they were it would have enabled Band Industries, who were looking to secure their automatic guitar tuning device RoadieTuner, to apply for a patent that would have protected them for up to three years while registering in other countries.
In order to file with PCT they had to register a company in Canada. That took about four months.
“You’ve got to file where a big chunk of the money is for you,” said cofounder Bassam Jalgha, referring to how one should take a look at where the biggest market for your product is. “The PCT didn’t really cost much but the cost of opening the company did.”
When it came to filing in the US he recalled paying around $5,000 and for Europe it was between 8,000 and 10,000 euros. This was including lawyers fees.
The suing problem
Yes, it all comes down to money.
You may have won your patent but that isn’t actually going to stop someone from attempting to steal the idea. Once a patent has been registered it is then public. That means your secret formula or instructions for putting that amazing contraption together is now out in the open for all the world to see.
“It gives us the right to sue someone,” said Jalgha. “But that’s it. And as a startup you can’t really sue anyone.”
Now, if money and time are no object then there is likely little downside to the whole thing. But, we all know that that is rarely the case for a startup.
AstroLabs’s Louis Lebbos agrees.
“In general we advise founders not to spend a lot of time and money on patents since at the end execution is critical to survival [and] success. And founders should not think that securing a patent protects the startup from competition. They rarely have the resources to protect their patents if a larger player decided to infringe.”
However, he added that if a startup was doing something in basic science or core tech, such as chip design, then go for it.
This then leads into the issue of people filing for patents that never actually get produced.
Because patents generally last for 20 years this acts as a roadblock for someone who is actually going to pull their finger out and make the device. The owner of patents can then sue others who might create a similar idea - even if that patent owner isn’t taking the idea forward.
For the guys at Band Industries they think more focus should be put on trademarks.
“In our biggest markets we’ve trademarked RoadieTuner,” said Slaibi, as it gave them a good level of protection “for something meaningful”.
However, despite being easier to obtain it is still a lengthy process that can take as long as six months to a year.
When you decide to take the leap
We’re all special to someone, but are you and your idea special to the market?
That depends, is your idea new and special in it’s respective field? That is what Amal Abdallah asks. A lawyer with Beirut-based Saba IP, a firm that specializes on intellectual property, she deals daily with these questions. “It needs to be innovative, industrially applicable and non-obvious for people in the field. And it should get an end result that was not there before.”
So, a few things to do first.
look for similar patents: as much as we like to think we’re original, often we are not.
make sure your idea actually works.
research your target market: are they going to even want what you’re selling?
check out the cost involved: if it’s more than customers are willing to pay then it’s more likely to fail.
In the Middle East the closest you can get to a central system for looking up other patents is the GCC Patent Office in Saudi Arabia.
However if, like many of the startups who do have patents, you’re interested in big markets then the likelihood of you registering for one in the MENA region is slim.
According to Abdallah most of the patents filed in the region are for big pharmaceutical or tech companies.
To help with your research and the eventual start of the official process, Abdallah advises to get an IP agent to help out.
While there remain arguments for and against patents and at what stage to get them, it is all about what is best for the startup. If a patent is going help you progress, then make it so.