While most entrepreneurs have dozens of “great” ideas for starting companies, in actual practice most companies are started by picking a single good idea that can be grown into a successful product. If all goes well, this initial idea provides the financial wherewithal that enables the company to take more of these ideas and nurture them into products. One way of thinking about this is that the first idea is the core of the company’s technology which produces other “seeds” that can be successfully grown into additional products. By protecting each new development along this path, the company can build a “fence” around its core which will protect its business assets both defensively and offensively.
Because the core technology of an initial good idea is so critical to the company’s future viability, it must be vigorously protected from the outset. This is the primary function of patent protection; entrepreneurs need to grasp the basics of how it works while in the process of selecting which of their “great” ideas to go for first in building their company. Patents allow their owners to exclude others from making, using, offering for sale, importing or selling the patented item. Patents add value to a business, capable of generating millions of dollars in revenue through licensing fees and enforcement awards.1 Further, strong IP protection discourages competitors. This article is intended to help entrepreneurs navigate the ins and outs of the early business decision-making process that will determine the value of the resulting patent portfolio on a global scale.
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