We get this question a lot of LawTrades. And the answer is no, it is not necessary per se, but it’s probably a smart idea. Patents can offer tech startups many benefits. They attract investors and can deter competitors. A startup with patent protection is more valuable to companies interested in forming a joint venture or making an acquisition as well. Further, a startup has the ability to license its patent, providing a business another way of generating funding while expanding its market simultaneously.
However, if you prefer to save some money, confidentiality agreements and trade secret protection may work just as well as costly patent registration, especially when combined with exceptional innovation design and speed. All employees, board members and advisors should be required to sign agreements obligating them to assign all business-related IP to the startup. You will also want to extend IP protection through agreements with non-employees, including vendors. outsourced designers, consultants, engineers, and even customers.