The Role of Patent Protection in Technology Start-ups
One of the great benefits of the patent system is to give start-up technology companies a reason for potential investors to invest, while providing protection. Patents give a start-up exclusive rights in the technology. Without this exclusivity, the start-up is subject to having its technology copied by others – particularly by large established companies who already enjoy access to marketing channels and economies of scale. Patents are like property in the sense that they can be assigned to the start-up company. For a technology start-up, without other significant tangible assets, the patents are its primary assets.
For example, in our work with AuthenTec over the years, we were able to develop a strong portfolio of patents that allowed AuthenTec to raise money for continued development, becoming a publicly traded company in 2007. While the company had patents over a range of technologies, it held key patents in the fingerprint sensing area. AuthenTec successfully used its patents to fight lawsuits, and ultimately acquire several competitors who were engaged in fingerprint-sensing technology. In addition, AuthenTec’s fingerprint-sensing patents enabled an acquisition by Apple in 2012 for $356M. Apple used the technology on in its very successful iPhones beginning in 2013, helping Apple to leap ahead of its competitors.
At Allen, Dyer, Doppelt + Gilchrist, we continue to work with start-ups including K4Connect, a company that has developed automation technology to serve older adults and individuals living with disabilities. The CEO and co-founder of K4Connect is Scott Moody, who also served as AuthenTec’s co-founder and CEO. Scott recognizes the critical importance of the role of patents in his new venture, and K4Connect has developed a substantial portfolio of patents.
Christopher F. Regan is a Registered Patent Attorney and Shareholder with Allen, Dyer, Doppelt + Gilchrist, PA in Orlando, Florida. For a consultation regarding your IP needs, contact ADD+G at 407-841-2330 or visit allendyer.com.