MaRS Library Assessing the importance of patent protection for web-based or software startups
Small software and website startups often do not own any patents or have any patent applications. Copyright exists in and will arguably protect the source code, binaries, images and other creative assets from explicit copying.
As always when developing an intellectual property (IP) strategy, startups should focus on developing the business and business goals and protecting the brand or trademarks of value. What can patent protection offer a web-based or software company? This article reviews the options.
What can patent protection offer a web-based or software startup?
The implications of Amazon.com court case on patent protection
In 2009, Amazon.com appealed a decision of the Commissioner of Patents in the Federal Courts regarding the denial for its “1-click” patent application. In October of 2010, the Court held that there is no inherent bar in the Patent Act on software or business-method patents as far as subject matter is concerned.
What this means is that it is now possible to obtain patents for software or business-method-related inventions. Before this decision, software and business-method inventions were not eligible for patent protection in Canada.
The practical results of this will be that patent applications for software and business methods will be examined under the legal criteria that are applied to all other patent applications.
However, the Commissioner of Patents is appealing this decision and there remains uncertainty around how the Canadian Intellectual Property Office’s patent examination policy will incorporate this recent decision.
Questions for startups to evaluate patent protection
For entrepreneurs, the fact remains that they must assess their basic reasons for seeking patent protection. They should evaluate the following questions:
- Would a patent provide the business with a competitive advantage?
- Would an acquiring corporation or an investor view the patent as a potentially valuable asset?
- Would a patent provide defensive value by staking out the company’s technological territory and core competency?
- The main shortcoming accompanying any software patent is one’s ability to detect infringement. For both software and business-method patents, a patent may legally give its owner a state-backed monopoly, but this must be enforced at the expense of the owner in terms of time, money and energy.
- The field may be crowded and there may be much prior art. This will result in a narrow patent that is of limited commercial value and easy to design around. (There isn’t always a revolutionary design present once historical context is provided to an invention, especially in most straightforward applications of software and websites, although a patent application can almost always succeed if it is made narrow enough.)
Nevertheless, there will be novel software and business methods that would benefit from patent protection. A careful assessment of the potential patentability of your IP with a business-minded IP professional should allow you to make an informed decision.
When considering pursuing patent protection, small web-based and software companies need to evaluate their expected return on the investment as well as which business goal(s) they would accomplish. With this information in hand, such companies can focus IP expenditures where they would create the greatest value.
Note: The content in this article is for purposes of general information only. It is not legal advice.
Canadian Intellectual Property Office. (2011, June 23.) Retrieved June 24, 2011, from http://www.cipo.ic.gc.ca.
Canadian Legal Information Institute. (2010, October 14.) Amazon.com, Inc. v. Canada (Attorney General), 2010 FC 1011. Retrieved June 24, 20110, from .
Supreme Court of the United States. (2009, October.) Bilski v. Kappos. Syllabus. Retrieved June 24, 2011, from http://www.supremecourt.gov/opinions/09pdf/08-964.pdf.
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