Technology Start-up Entrepreneurs and CEO\’s: If Your Goal is Investment or Acquisition by a Big Company, You are Probably Patenting the Wrong Things

Do you treat your patents as a fence or a tollbooth? If you wish for your start-up technology company to obtain investment from or acquisition by a bigger player, you had better understand the difference.

Most start-up technology company entrepreneurs and CEO\’s understand that patents can be key to establishing the value of a new business idea. Typically, entrepreneurs and CEO\’s such as yourself will engage patent attorneys to build an IP portfolio that protects the start-up\’s technology and products to the fullest extent possible. The motivation for this effort and expense is, of course, to to protect your start-up\’s idea from use by others. As management of a start-up you may be seeking to build an ongoing business around the patented technology, but often the goal of building a solid patent portfolio is to make your business an attractive target for investment or acquisition by a larger company.

As an intellectual property and business strategist (more info here: http://www.jackiehutter.com/), I believe that such an inwardly focused patenting strategy is a misguided approach for companies that wish to obtain investment from or be acquired by larger companies. Why do I think this? Let me use a simple analogy.