Ten Patent Mistakes Every Founder Should See Coming
Launching a company means betting on an idea. But some of the most damaging risks a startup faces have nothing to do with the market and everything to do with how its intellectual property was handled from day one.
In this episode of Patenting for Inventors, Adam Diament, registered patent attorney and partner at Nolan Heimann, walks through ten patent mistakes that can derail a startup before it gets off the ground.
Adam explains why a patent doesn’t give you the right to sell your own product, how early public disclosures and bargain provisional filings can quietly erode patent rights, and why paying someone to build your technology doesn’t automatically mean your company owns it. He also covers ownership claims from former employers and universities, the value of patentability searches, choosing which features are worth protecting, keeping up with product improvements, international filing deadlines under the PCT, and when a trade secret may be the smarter play.
For founders, engineers, and investors alike, this episode is a practical checklist for making informed decisions about ownership, timing, and the commercial value of an invention, while those mistakes are still easy to prevent.
Patenting for Inventors Ep. 183:
Podcast Transcript:
Hello, and welcome to the Patenting for Inventors podcast. I’m your host, Adam Diament, a registered patent attorney and partner at the law firm of Nolan Heimann in Los Angeles, California. This episode is “10 Patent Mistakes That Could Kill Your Startup.”
Starting a business is risky enough. But imagine spending years developing a product, raising money from investors, and finally launching your company, only to discover that you can’t legally sell your invention. Or worse, that your company doesn’t even own the invention it’s built around.
These aren’t just hypothetical problems. They’re the kinds of intellectual property issues that startups need to watch out for.
Today, I’m going to cover ten patent mistakes that could seriously damage your startup, and in some cases, destroy your business before it even gets off the ground. Whether you’re developing a new medical device, launching a software company, or bringing a consumer product to market, these are ten mistakes you’ll want to avoid.
Let’s get started.
Mistake Number 1: Thinking That Having a Patent Means You Have the Right to Sell Your Product
Here’s something that surprises a lot of inventors. You can have a perfectly valid patent on your invention and still get sued for selling it. How is that possible? Because a patent doesn’t give you the right to make or sell your invention. It gives you the right to stop other people from making, using, or selling what’s covered by your patent.
Let’s say someone invents and patents a bicycle. You come along and invent an improved bicycle with a revolutionary new braking system. You get a patent on that braking system.
Congratulations! But here’s the problem. If the original bicycle patent is still in force, and your bicycle falls within its claims, you might need permission from the original patent owner to sell your improved bicycle. Your patent doesn’t give you a free pass to infringe somebody else’s patent. This is why there’s an important distinction between patentability and freedom to operate.
Patentability asks whether your invention qualifies for a patent. Freedom to operate asks whether you can commercialize your product without infringing someone else’s enforceable patent rights. Before investing heavily in manufacturing and launching your product, consider having a patent attorney conduct a freedom-to-operate analysis. Because the last thing your startup needs is to spend a fortune developing a product that someone else can legally stop you from selling.
Mistake Number 2: Publicly Disclosing Your Invention Before Filing a Patent Application
Imagine you’ve invented a revolutionary new medical device. You’re excited, so you demonstrate it at a startup pitch competition. Investors love it. You post the presentation online, and your company starts getting attention. Six months later, you decide to file a patent application. Unfortunately, you may have already damaged your patent rights.
In the United States, inventors generally have a one-year grace period for certain disclosures originating from them. But that grace period has important limitations, and many foreign countries don’t provide the same protection. In some countries, publicly revealing your invention before filing can immediately prevent you from obtaining a valid patent. And disclosures don’t have to involve a formal presentation. They might include a crowdfunding campaign, a YouTube video, a website, or even a conversation with someone who isn’t under an obligation of confidentiality.
Commercial sales and offers for sale can create additional patent problems, sometimes even when the details of the invention aren’t publicly revealed. Now, this doesn’t mean you can never discuss your invention before filing. Confidentiality agreements can help in appropriate circumstances. But the safest general approach is to file an adequately detailed patent application before publicly disclosing your invention. Remember, you can’t always undo a disclosure. Once the information is out there, you may have permanently lost valuable patent rights.
Mistake Number 3: Filing a Cheap, Poorly Written Provisional Patent Application
You’ve probably seen advertisements offering provisional patent applications for just a few hundred dollars. Sounds like a great deal, right? Well, maybe. But there’s a potentially very expensive trap here.
A provisional patent application can establish an early filing date, and it doesn’t require formal patent claims. But it still needs to adequately describe your invention. Let’s say your startup invents a new type of battery. You file a three-page provisional application that basically says you’ve invented a battery that charges ten times faster than conventional batteries. A year later, you file a nonprovisional application with detailed descriptions of the chemical composition and charging mechanism. Here’s the problem. If those technical details weren’t adequately disclosed in the provisional application, your later patent claims may not be entitled to that earlier filing date. And if you’ve publicly disclosed the invention or someone else has published relevant technology in the meantime, you could be in serious trouble.
A provisional application isn’t a magic reservation ticket that protects anything you invent over the next twelve months. It only provides potential priority protection for subject matter that was adequately disclosed in the original filing. So while provisional applications can be excellent tools for startups, don’t confuse inexpensive filing with effective patent protection.
Mistake Number 4: Assuming Your Startup Automatically Owns Its Inventions
Let’s say you start a company with two friends. One of you handles the business side. Another develops the software. The third designs the hardware. The company pays everyone’s salaries, buys the equipment, and funds development. So obviously the company owns all the inventions, right? Not necessarily.
Under U.S. patent law, patent rights initially belong to the inventors, subject to applicable legal rules and contractual obligations. Simply forming a corporation or paying someone to develop technology doesn’t automatically transfer all patent rights to the company. This can be particularly dangerous with independent contractors. Imagine your startup hires an outside engineer to develop a critical component. You pay the engineer twenty thousand dollars, but never obtain a proper intellectual property assignment. You might discover later that the engineer still owns patent rights covering that component.
Now imagine you’re negotiating a multimillion-dollar investment, and the investor’s attorneys discover that your company doesn’t have clear ownership of its most important technology. That’s not a conversation you want to have. Startups should have appropriate invention assignment agreements with founders, employees, and contractors. And remember that inventorship and ownership are two different things. You can’t simply list the CEO as an inventor because the CEO owns the company. Get the ownership paperwork right from the beginning.
Mistake Number 5: Ignoring Patent Ownership Claims From Former Employers or Universities
Here’s a scenario that can turn a promising startup into a legal nightmare. You’re an engineer working for a large technology company. In your spare time, you develop an exciting new invention. You quit your job, form a startup, and begin commercializing the technology. Everything seems great until your former employer sends you a letter claiming that it owns your invention. How could that happen?
Many employment agreements contain provisions requiring employees to assign certain inventions to their employers. Depending on the agreement and applicable state law, those obligations may extend beyond inventions developed during normal working hours.
Now, there are important limitations. For example, California law provides protections for certain inventions developed entirely on an employee’s own time without using the employer’s resources, although exceptions apply. But you shouldn’t assume that working on something at home automatically means you own it.
Similar issues can arise with universities. If you developed technology while conducting university research, the institution may have rights under its intellectual property policies, research agreements, or assignment documents. And if federal funding was involved, additional requirements may apply.
Before building a startup around technology developed during previous employment or university research, review the relevant agreements and ownership issues. You don’t want to discover that somebody else has a claim to your startup’s most valuable asset.
Mistake Number 6: Failing to Conduct a Patentability Search Before Investing in a Patent Application
Imagine spending fifteen thousand dollars preparing and filing a patent application, only to discover that somebody patented essentially the same invention ten years ago. That would be a pretty painful surprise. This is why a patentability search can be a valuable early investment. A patentability search looks for earlier patents, published patent applications, and other publicly available information that might affect whether your invention is new and nonobvious. And here’s something many inventors don’t realize: prior art isn’t limited to patents. It can include scientific articles, websites, product manuals, videos, and other qualifying disclosures. Even an old product that was never patented might prevent you from obtaining a patent on the same invention.
Now, a patentability search isn’t required before filing, and no search can guarantee that your invention is patentable. Some patent applications haven’t been published yet. Other relevant information may be difficult to locate. And sometimes a search reveals that the broad concept is already known, but a particular improvement might still be patentable. That’s actually one of the benefits of searching early. It can help you identify which aspects of your technology may be worth protecting.
For a startup operating on a limited budget, understanding the patent landscape before committing substantial resources can be extremely valuable.
Mistake Number 7: Spending Money Patenting the Wrong Features
Just because something is patentable doesn’t necessarily mean it’s worth patenting. This is particularly important for startups, where every dollar matters. Let’s say your company develops a new robotic vacuum cleaner. Your engineers come up with three innovations. The first is a revolutionary navigation system that allows the vacuum to operate much more efficiently. The second is a new dust collection mechanism that reduces maintenance. The third is a decorative arrangement of indicator lights.
Now, all three might potentially qualify for some form of patent protection. But should your startup spend equal amounts protecting each one? Probably not.
The navigation system might be the technology that gives your company its competitive advantage. Competitors may desperately want to copy it. The indicator lights, on the other hand, might be easy for competitors to change without affecting their products. A patent on that feature could have relatively little commercial value. When deciding what to patent, ask yourself: What makes our product valuable? What would competitors want to copy? How easily could they design around our patent claims? And could we realistically detect infringement?
A startup doesn’t necessarily need a large patent portfolio. It needs a strategically valuable one. A few strong patents protecting important technology may be worth far more than dozens of patents covering features nobody cares about.
Mistake Number 8: Failing to Patent Improvements to Your Original Invention
Here’s a mistake that’s particularly common with technology startups. You file a patent application covering your first prototype. Then your engineers spend the next eighteen months improving the product. They redesign the electronics, develop a better mechanical system, and create an entirely new software algorithm. Eventually, the product you launch looks and functions quite differently from the original prototype.
But you assume your original patent application protects everything. Not so fast. A patent application only provides support for inventions adequately disclosed in that application. If you develop new technology afterward, the original application doesn’t automatically provide a filing date for those improvements. Let’s say your startup files a patent application for a new drone.
A year later, your engineers invent a completely new collision-avoidance system. That system may be separately patentable, but you might need to file another application to protect it. And if you publicly disclose the improvement before filing, you could create the same disclosure problems we discussed earlier. Startups should periodically review their new developments to identify potentially patentable improvements. This is especially important before major product launches, demonstrations, or investor presentations. Your patent strategy shouldn’t be something you think about once and then forget. As your technology evolves, your intellectual property protection may need to evolve with it.
Mistake Number 9: Missing International Patent Filing Deadlines
Suppose your startup files a U.S. patent application. Two years later, your product becomes wildly successful, and you decide to expand into Europe and Asia. You contact your patent attorney and say, “Great news! We want to patent our invention in twenty more countries.” Unfortunately, you may be too late. Patents are territorial. A U.S. patent doesn’t automatically protect your invention in Germany, Japan, China, or anywhere else outside the United States. And international patent protection involves strict deadlines. Generally, if you want to claim priority to your first patent application, you need to take appropriate steps within twelve months. One option is filing an application under the Patent Cooperation Treaty, commonly called the PCT.
A PCT application doesn’t give you a worldwide patent. But it provides a coordinated filing process that can preserve your ability to seek patents in many countries. In numerous jurisdictions, the PCT process gives you approximately thirty months from your earliest priority date before you need to enter the national or regional phase. That extra time can be extremely useful for startups trying to raise capital or evaluate international markets. But these deadlines don’t last forever. And public disclosures can create additional obstacles to later foreign filings. The lesson is simple: Think about international patent protection early, even if your startup isn’t ready to sell internationally yet.
Mistake Number 10: Overlooking Trade Secret Protection as an Alternative to Patents
Here’s one final mistake that might surprise you, especially coming from a patent attorney. Sometimes, the best patent strategy is not to file a patent application at all. Instead, it might make more sense to keep your invention a trade secret. A patent generally requires you to publicly disclose how to make and use your invention in exchange for a limited period of exclusive rights.
For most utility patents filed today, the term generally runs twenty years from the relevant nonprovisional filing date, subject to various adjustments and other rules. Trade secret protection, on the other hand, can potentially last indefinitely, as long as the information remains secret, derives economic value from its secrecy, and is subject to reasonable measures to maintain that secrecy. Think about the formula for Coca-Cola. Rather than disclosing the formula in a patent, the company has famously protected it as a trade secret.
Now, trade secrets aren’t appropriate for everything. If someone can easily reverse engineer your product, keeping the invention secret may be impossible. And trade secret law generally doesn’t prevent someone else from independently developing the same technology. But for certain manufacturing processes, chemical formulations, or internal algorithms, trade secret protection may be worth considering. Startups should evaluate both patents and trade secrets rather than assuming every valuable innovation needs a patent application. Sometimes, knowing what not to patent is just as important as knowing what to patent.
So there you have it. Ten patent mistakes that could seriously hurt your startup.
The common theme is that patent protection isn’t simply about filing an application and hoping for the best.
It’s about making informed decisions concerning ownership, timing, patentability, freedom to operate, and the commercial value of your inventions.
And many of these mistakes are much easier to prevent than to fix afterward.
That’s it for today’s episode. I’m Adam Diament, and if you need help filing a patent application, or other intellectual property, give me a call at 424-281-0162. Until next time, I’m Adam Diament, and keep on inventing!