What should early-stage startups do — and avoid — when building IP strategy
Let’s talk about the basics – What should a (still) young and (still) small startup do regarding its intellectual property? And on the flip side – what it should not do?
Let’s think together, and do some math here:
First equation:
A (What do you know?) minus B (What do you know that anyone else doesn’t know?) equals C (Your unique advantage). If C exists, and has commercial utility, congratulations – C is your IP.
Second equation:
D (The cost of doing things the old-fashioned way) minus the cost of performing C equals E (The financial gain by using C instead of D). If E is positive, congratulations – E is the financial value of C.
Third equation:
E minus F (The cost of obtaining enforceable Patent protection for C) equals G. If G is positive, congratulations – C should be your first/next Patent. However, if G is negative, also congratulations – C should be your first/next Trade Secret.
Of course, no one actually solves these equations in real life. At least, not as actual equations. But the rational stands, and A to G should be defined and kept in-house (their values are Trade Secrets on their own).
I have solved these equations many times, for many clients. Contact me if you need some guidance.
✅ Do’s:
- Define your unique advantage (C): Identify what you know that others don’t, and confirm it has commercial value.
- Estimate the financial value (E): Calculate the gain from using your innovation versus the old way of doing things.
- Run the patent-vs-trade secret equation (G): If patenting costs less than the value it brings — patent it. If not — keep it as a trade secret.
- Document this logic internally: Even if it’s informal, define A to G and treat the values as confidential company knowledge.
- Use this framework to guide IP decisions: Let business value drive your IP actions, not just legal instincts.
❌ Don’ts:
- Don’t patent just because you can: Only do it when the value outweighs the cost.
- Don’t treat IP as an afterthought: It’s a core business asset, not a legal decoration.
- Don’t skip the math: You don’t need a spreadsheet, but you do need clarity on value vs. cost.
- Don’t ignore trade secrets: If patents aren’t worth it, trade secrets are often the smarter move.
How should early-stage startups approach IP strategy?
- Your IP = What you uniquely know that others don’t, and can be commercialized.
- The financial value of IP = Savings or gains it creates vs. the old way.
- If protection costs less than the value it creates → patent. If not → trade secret.
- Don’t skip the math — even if it’s back-of-the-envelope. That’s your edge.
Timing: Filing a Provisional Patent Too Early Can Backfire
Many early-stage startups rush to file provisional patent applications the moment they have a breakthrough idea.
But here’s the problem: A dream isn’t enough. Even if it’s a bold, disruptive, world-changing dream.
“I have a dream,” said Martin Luther King — but he didn’t try to patent it. And neither should you.
A provisional patent application isn’t a placeholder for ambition. It’s supposed to reflect a real, reproducible, enabling disclosure — not just a vision, wish list, or napkin sketch.
❌When filing a patent too early:
- You waste resources on filings that won’t hold up in court.
- You risk exposing your ideas before they’re ready.
- You create a false sense of security while competitors keep innovating.
✅What should you do instead?
- Focus first on reducing your idea to practice — even if only at the conceptual or prototype level.
- Document real technical progress and innovation.
- File only when your provisional will actually support future rights.
Remember: Strong IP protects innovation — but rushed IP can leave it exposed and ultimately unprotectable. Even MLK had a dream, not a filing date…
What’s the risk in filing a provisional patent application too early, before your idea is fully developed?
- Filing too early creates weak protection, wastes resources, and gives false confidence
- A dream or vision isn’t enough — you need reproducible, technical disclosure
- File only when the invention is real enough to support enforceable rights
