A common mistake startups make is trying to build patent portfolios the same way large technology companies do. This mistake is often reinforced by well-intentioned patent counsel who are experienced with Fortune 100 clients, but unfamiliar with the capital constraints, pace of change, and risk profile of early-stage companies. Having advised both startups and large technology companies as a patent attorney and partner at an AmLaw 100 firm, I’ve seen firsthand how successful startups approach patent strategy very differently, and why copying big tech’s playbook can be a costly error.

The Two Ways to Start the Patent Process

There are two ways that one can start a patent process – via a non-provisional application or a provisional application. A non-provisional application is a formal and expensive application that needs to be drafted by a patent attorney. Such applications can cost $15k - $30k to draft and file, and then they wait in line at the USPTO for 1-3 years before examination finally begins. The examination process is analogous to a negotiation with the Examiner, where you are trying to get the broadest claims possible and the Examiner needs to be convinced that what you have claimed is new and non-obvious in view of the prior art. Just like most negotiations, rejections are a natural part of the examination process, and you typically need to go back and forth with the Examiner multiple times, which is a process that can take months or years and incurs additional cost. Hopefully, the non-provisional application is ultimately allowed, and the application will issue as a patent.

The other way to start the patent process is with a provisional patent application. Provisionals are simply placeholders that establish a priority date and are not substantively examined by the USPTO. Provisional applications only last for one year, automatically expire at the end of the year, and this term cannot be extended. A formal non-provisional must be filed before the provisional application expires; otherwise, the priority date of the provisional is lost.

The Benefits of Provisional Patent Applications for Startups

One thing you may immediately notice is that starting with a provisional patent application effectively extends the patent process by one year – so then why is starting with a provisional application essentially the standard way that startups begin the patent process?

The main reasons are the ability to file a provisional application at low cost and to allow for incremental protection of inventions as they develop at early stages, both of which are critical for startups.

In contrast to non-provisional applications (which are expensive), provisional applications do not have the formal requirements of non-provisionals, and can be drafted and filed for as little as a few thousand dollars. One of my favorite ways to get a provisional on file for startups is to coach them on drafting a detailed invention disclosure of the technology, refining the text to remove limiting language and broaden protection where possible, and then filing it as a provisional application. 

In addition to conserving precious capital at early stages, starting with a provisional application allows for cost-effective incremental protection of an invention. In general, for startups, the provisional application is typically filed just before a first public disclosure, public use or offer for sale of the technology; because patent rights would otherwise start to be lost if a patent application is not filed first. The year in which the provisional is pending is typically when a lot of development of the technology occurs, and it is common for major refinements to be made or even major pivots in a product. These new developments can be easily protected in an updated provisional application or can be added when the non-provisional application is filed.

Unlike large tech companies that have large and well-capitalized patent programs, the main threat to startups at early stages is lack of capital, and starting the patent process with a provisional application minimizes cost early on while providing flexibility to incrementally protect an invention until the company has sufficient revenue or investment to pay for and justify the expensive non-provisional a year later. 

How Big Tech Companies Build Patent Portfolios 

Unlike startups that should essentially always start the patent process with provisional applications, large tech companies almost always start with non-provisional applications. The main reason is how large companies view their patent assets compared to startups. These large companies have thousands if not tens of thousands of patent assets, and they tend to view them the way angel investors or venture capitalists view their portfolio companies. Specifically, they know that most of their patent assets will be relatively worthless because they end up relating to technology that is never implemented by them or competitors, that ultimately lacks relevance, or becomes quickly outdated. Some patent assets will generate a bit of revenue or value, but it tends to be a small minority of patent assets that will derive massive value for the company. 

Accordingly, just as angel or venture capital investors need to invest in a large number of companies to find the rare company that will be a home run and make nearly all of their profit, large tech companies regularly file patent applications on a wide variety of technology so they can be assured that they protect the tiny minority of inventions that will actually end up being market-changing. For this reason, large tech companies skip the provisional stage and jump directly to non-provisional applications - they simply don’t need or get the benefit from the deferred cost and flexibility that provisionals provide. For them, it’s more of a numbers game.

How Successful Startups Grow Patent Portfolios

Unlike large tech companies, startups need to have a more targeted approach to patent protection given their limited capital and typical single-product or service business model. While large companies file patent applications as soon as practical, successful startups tend to wait as long as possible before filing patent applications, because for them, lack of capital is the biggest existential threat instead of needing to get the earliest priority date possible. Accordingly, the game plan for startups is to delay and defer patent costs as much as possible; while also maintaining maximum flexibility so that they can strategically scale their patent portfolio as they become more capitalized and revenue-positive over time.

A recurring pattern I see in my practice is that early-stage startups often reach out eager to file non-provisional patent applications, convinced that the timing is right. However, in most cases, they are still operating at a conceptual level without any real technical details, or real commercial triggers (imminent fundraising, public disclosures, public uses, or offers for sale). When advised to file a provisional and also delay filing as long as possible, they are often skeptical and argue that there is no point in waiting because business and product development will proceed quickly and go according to plan. 

Enthusiasm and positive thinking like this is exactly why I love working with startups, but what I have consistently seen in over twenty years of patent practice with startups is that things don’t always go to plan. More often than not, startups who choose to wait to file and start with a provisional end up thanking me a year later, because looking back, they realize in hindsight that they would not have had the capital, business insight or sufficiently developed technology to be able to confidently draft a suitable non-provisional application. 

In contrast, startups that push to file too soon are consistently the ones who don’t file a non-provisional a year later because they don’t have sufficient capital or don’t want to risk the limited capital they have since they haven’t taken the business far enough to know whether it’s worth it. 

In my experience, the startups who delay filing as long as possible and start with a provisional are the most likely to succeed compared to startups who file too soon or insist on starting with a non-provisional patent application.

Final Thoughts

If you are a startup, the key takeaway is simple: don’t copy big tech’s patent playbook. Start with provisionals to buy time, to keep initial costs low, and to give you the flexibility to scale your patent portfolio to match the growth and progress of the business. Also, don’t rush to file patent applications and instead wait until you are ready to make public disclosures, public uses or offers for sale or potentially before pitching investors. This not only allows you to further delay the high cost of non-provisional applications, it also gives you time to more fully develop inventions, which is often where the important patentable details of technology are uncovered. 

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Dylan O. Adams is a partner and patent attorney at Davis Wright Tremaine, practicing out of its Seattle office. His clients include startups, Shark Tank businesses, and Fortune 100 tech companies. His YouTube channel Patents Demystified is used by inventors, entrepreneurs and startups worldwide, and he is the author of the best-selling book Patents Demystified, an Insider's Guide to Protecting Ideas and Inventions, which is used at top universities like Harvard, Stanford, and M.I.T.