How big a priority is it for me to apply for patent of my software algorithm?

Question

How big a priority is it for me to apply for patent of my software algorithm?

It’s used in a prototype for an actual product (A), and a proof-of-concept for product (B). (B) has a very interested enormous Taiwan OEM, who may be able to sell millions of units and offered to pay license fee per unit or purchase my product by unit.

Product prototype (A) is a working app for iPhone or iPad, on Apple’s iTunes App store. (Works great but needs user interface polish and formal testing.)

Product proof-of-concept (B) I have demonstrated a couple of times for said prospective customer in the Silicon Valley, where I live.

Both (A) and (B) use my software algorithm invention.

Patent claims would also include systems that use my algorithm, as well as algorithm itself.

I have been awarded USTPO patents recently, for other software work.

A friend and founder of a terrific startup, market cap > US$200M, told me over lunch that his opinion is that patents are hardly worth it because defending them is expensive and too time consuming; best to innovate as fast as possible, generate revenue, sell the company, and celebrate.

So, now I'm wondering if I should spend all that time applying for patent. How big a priority is it?

(Note: I invented and wrote up the applications for at least 60 of patent applications for said friend's company, which are finally getting approved by USTPO. So I'm not afraid of the work to apply for patent.)

Answer 1

To add to the other answers:

Many investors requiere a startup to have filed for a patent on the invention to protect their investment. So having a patent application can be good to scare competitors (who will likely be small and not have the money to defend against prosecution neither). It is good for marketing purposes, especially when talking to investors.

A patent application is normally researched by the patent office, so you get something similar to a freedom to operate search for the fees you are paying, too.

And last but not least, if some competitor starts making a lot of money with your invention, you will find some investor to pay for the litigation. That makes your revenue smaller, but it does get you there.

Answer 2

Your friend has a very defensible position. But. Your particular invention and your particular patents may be much stronger, in today's world, than most "software patents." Of course, they may not. I'm in no position to even attempt to predict.

Also, even if patents are difficult to directly enforce in an adversarial context today, they can still be useful in less concrete but still significant ways. For example, they give an interested third party something tangible to license or buy from you, they can be attractive or frightening (as appropriate) to a particular audience that may be of interest to you, and they can be thought of as an option that might appreciate in value if the legal climate changes.

All of which is, as usual, my way of saying it depends. What do you want to do with the patents and how valuable is the 10-30K and the time cycles it might cost to even try to get them?

Answer 3

Patents are not that expensive and they are a form of property. However, defending patents is very expensive (Sport of Kings). But you don't have to defend what isn't important. Moreover, you can define what is important later but you cannot patent later.