2018 Startup GUIDE - 10th Edition

COVER STORIES 51
P&TS
IP strategy to achieve business
plan targets is the new black
Many startups secure patents to impress investors – everyone
knows that investors will drop you like a hot potato unless you
have a patent protecting your technology, right?
Well, this is only half of the truth. A study has shown that in Switzerland,
non-patenting start-ups receive an average funding of
CHF 374,000 while patenting start-ups receive CHF 954,000 on
average. This is a very significant difference, that shows a strong
correlation between patenting activities and the amount of investments
that start-ups receive.
This study, and other similar ones, have been widely publicized in
the start-up scene, so that nowadays nearly every start-up with a
new technology wants to have at least one patent – or at least
have a provisional patent application – before pitching to investors.
While securing patents just for the sake of investors is fine, a lot
more can be done. In fact, having a patent may not bring you any
closer to achieving your business plan targets.
Naturally you want to protect your technology and know-how,
but you want to protect it in the most suitable way to fit your specific
situation. The most suitable IP strategy for a startup will depend
on many criteria – there is no “one-size-fits-all” IP strategy.
Over the past 15 years, we at P&TS have audited more than 400
start-ups on their IP strategy. This gives us an invaluable understanding
of the IP landscape among Swiss start-ups, and of some
of the common potential pitfalls which start-ups often encounter.
We often come across a lack of a suitable IP strategy. Some companies
seem to have only a poor understanding of what makes
them unique and different from their competitors, and therefore
they fail to protect their real USPs. They may end up wasting money
on useless patents or failing to protect their differences.
As an example, we often meet start-ups that have developed outstanding
products, but where the quality of the solution depends
on dozens of small iterative improvements rather than on one single
disruptive invention. This is often the case with IT; some software
companies with the very best software you could imagine;
elegant source code, very fast and an attractive interface. This excellent
result is often due to one or a group of talented programmers,
but not to any unique invention that would be worth patenting.
Maybe the product is better than the competition; but none
of the improvements is a real USP or is essential for its success.
In such a situation, rather than spending money on protecting
each new feature, it might be worth considering alternative forms
of protection. An initial step could be, for example, to make sure
that the excellent developers who contributed to this amazing result
will stay with the company and double-check their employment
contract and non-competition clauses. Another step might
be to exploit copyright and trade-secrets to protect aspects of
the software, and to take all organisational measures to secure
these alternative forms of protection. This might include, for example,
educating your employees, reviewing your NDAs, and
time-stamping your documents.
We also face the opposite situation; for example, highly ambitious
start-uppers who have developed a consumer product with
which they want to compete against tech giants in a mass market.
Or some entrepreneurs who are mainly interested in selling their
technology to another company which will take care of the production
and marketing. In any of those situations, a single patent
might not be sufficient, and you will need many more patents if
you want to match the portfolio of your closest competitors, or to
base your revenues on sales of IP rather than on sales of product.
Of course, filing many patent applications will be expensive, but
in any of those situations you do not really have a choice if you
want to achieve your business plan objectives.
It is also very important to decide which of the technical features
are really important for the success of your product. Patent applica-
SWISS STARTUP GUIDE 2018