Introduction
A startup company is defined as a new venture created to bring new products or services to the market in conditions of great uncertainty. The objective of a startup is to find a repeatable and scalable business model. At the beginning of its life, a startup’s main value is its intellectual property (1). Therefore, founders must be aware of the importance of having an IP strategy.
In order to compete in a global market, a company must adopt an adequate industrial property protection strategy. This entails a careful evaluation of which innovations to patent and which to keep as trade secrets.
The decision regarding the scope, timing, and location of patenting activities is contingent upon numerous factors, including the technological sector, the time required to enter the market, the nature of the product (or process), and, most crucially, the budget allocated for the procurement of adequate protection. This budget must encompass not only the expenses associated with filing and prosecuting patent applications but also the potential financial obligations stemming from a lawsuit concerning patent infringement.
A patent strategy constitutes a long-term protection strategy, the formulation of which necessitates clear and precise R&D and industrial objectives. It is essential to identify the predominant entities within the pertinent technology sector and ascertain their patent status. Furthermore, it is crucial to discern opportunities and potential impediments to entry. A methodology for acquiring industrial property rights (through internal or collaborative development or acquisition) and the cultivation of a portfolio of exclusive rights that enables the startup company to safeguard its technology from competitors is also necessary.
In essence, the inquiries to be addressed during the formulation of a patent strategy are delineated in Figure 1.
As with business risk, the management of industrial property entails a fundamental element of risk management: the potential invalidation of patents by competitors and the counterfeiting of products and/or processes protected by such patents. (2)
The allocation of financial resources, which can be substantial in cases necessitating the filing of a counterfeiting lawsuit, is an integral component of patenting. Consequently, it is imperative to meticulously plan this activity.
Trade secrets are also a form of protection that is susceptible to risks; if they become public knowledge, it is possible for anyone to take advantage of them.
Trade secrets are not applicable to products that are subsequently placed on the market, as their composition and technical features can be analyzed and understood. Trade secrets are exclusively applicable to processes or products that are utilized internally within a company.
The fundamental question that must be addressed is whether the filing of a patent application confers a competitive advantage, or if it is merely an expense that cannot be recouped.
In the event that trade secrets are chosen, there are other questions that are not easily answered.
The sufficiency of invoking the right of prior use must be assessed in light of the possibility that a competitor may file a patent application for the same process.
The duration for which industrial secrecy can be sustained is a matter of concern.
It is essential to ascertain whether it will be necessary to protect the process with a patent application in the future.
Alternatively, one could consider making the process public by means of a defensive publication, which would prevent others from subsequently filing a patent application due to a lack of novelty. A number of websites (3) provide the functionality of entering publications, which can subsequently be searched in a database.
Consequently, the following options should be considered:
initiate the patent application process promptly.
maintain industrial secrecy for as long as possible.
In the event that competitors are developing similar technical solutions, it is imperative to maintain secrecy and subsequently file a patent application.
The publication of the invention is intended to prevent others from patenting it.
What may be suitable for patenting?
Claims are of the essence in a patent application, as they delineate the scope of protection. Given the intricacies inherent in the subject matter, it is advisable to consult an industrial property attorney to delineate the scope of the patent application and the claims.
Patenting is not a ‘turnkey’ or ‘fire and forget’ activity, as many novices to the field are erroneously led to believe. It is not an activity that can be improvised, nor is it easy to correct any errors. The process of patenting that results in a successful outcome is often multifaceted and requires a significant degree of preparation, strategic planning, and, in many cases, the expertise of trained professionals who can provide the necessary guidance at the opportune moment.
Successful patenting means obtaining a patent that is worth more than it cost, not just the granting of the title.
A search for prior art in patent databases is an essential component of assessing the state of the art, and it is useful for the drafting of the patent application.
Writing the description and claims of a patent application is a task of paramount importance. The future protection of a product that will be placed on the market may depend on the quality of the application. A patent that is not well written will not offer any protection and can be easily circumvented by competitors.
When to initiate the patenting process?
The decision regarding the timing of patenting should be made promptly, ideally before any disclosure has been made.
This decision is not without its complexities, as it necessitates a careful consideration of the necessity for expeditious action in filing, as well as the potential risks associated with delay, particularly in instances where competitors are demonstrating notable innovation.
In the event that a patent is filed prematurely, there is a possibility that the necessary experimental data may not yet be available to support the claims being made. In such a scenario, it is possible to file an additional national patent application within the priority year for the technical improvements achieved. These two applications can then be combined into a single international extension (PCT). In the event that this action is executed after the designated timeframe, competitors may gain insight into the intellectual property that has been developed by the startup but has not yet been formally protected.
The question of “when to patent” gives rise to several inquiries, including the underlying purpose of the patent. The primary objective of the patent is to prevent third parties from duplicating the invention, or to license the technology that will not be utilized within the startup. Another potential objective is to enhance the value of the company in the event of a future merger or acquisition
Where to patent?
Typically, the selection of the country in which to file a priority application does not pose a significant challenge. This decision is typically made in the country where the startup has its registered office or primary commercial activity, or where the production sites of its main competitors are located. Consequently, the priority year can be utilized to extend a national exclusive right abroad in all markets where the patented products are to be marketed.
For a startup located in Italy, the Italian procedure is advantageous due to the low cost of fees and the fact that a search report and written opinion (albeit non-binding) are obtained from the European Patent Office (EPO), which is useful tool in deciding whether to proceed to the next international or European stage. Furthermore, the search fees are then partially or fully refunded. In Italy, the financial obligations associated with the filing of a patent application are contingent upon various factors. The cost range for this process, from the initial filing to the patent grant, is between €3,000 and €5,000 (attorney’s fees). This cost variation is influenced by the content of the search report and the patentability opinion, which in turn impact the subsequent prosecution stage, which consists of a reply to an office action.
For a startup located in the United States, a provisional patent application may be taken into consideration. In the United States, the fees associated with the submission of a provisional application amount to $130 or $65 for entities that can be categorized as either small or micro, respectively. (4) The financial burden of legal expenditures can be substantial, with attorney fees often amounting to thousands of dollars.
A particularly salient yet challenging aspect of the decision-making process pertains to the determination of the optimal geographical scope for the potential target market, while considering the financial implications of patent procedures. The designation of the countries in which to file an application may be postponed for a period of one year (claiming the priority of the first patent application) or for a period of thirty/thirty-two months (again considering the priority date as the starting point) if the PCT procedure is utilized.
With the PCT system, it is possible to obtain a provisional protection in 158 member states (as of July 28, 2025) (5), with a streamlined procedure in comparison to direct national phases. A singular filing is required, and a wide array of languages is available for the formulation of the application (Arabic, Chinese, English, French, German, Japanese, Korean, Portuguese, Russian, or Spanish). Additionally, a search report and a written opinion can be obtained. While it is possible to respond to the examiner’s objections, this is not considered essential. This is due to the fact that PCT does not constitute a granting procedure; rather, it is a centralized filing procedure that enables the deferral of a decision that, in the short term, can be complex and costly.
The amounts and currencies of the main PCT fees are subject to variation depending on the designated Receiving Office (RO) and, as well as the designated International Searching Authority (ISA).
Table 1 provides a synopsis of the three types of fees that are applicable when a PCT application is filed by an applicant based in Italy, for which only three Receiving Offices are available: The International Bureau (IB), the European Patent Office (EPO) and the Italian Patent and Trademark Office (IT – UIBM).
In addition to the taxes enumerated in the table, attorney fees must be taken into account. Typically, the cost of a PCT filing ranges from €7,000 to €10,000, contingent upon whether it is a first filing or an extension of a priority application.
It is also important to note that not all countries worldwide have acceded to the PCT system. Consequently, entry into certain countries, such as Argentina and Taiwan, must be made in the priority year.
In addition to the PCT, regional alternatives exist, including:
EAPO (Eurasian Patent Organization – http://www.eapo.org/en/)
ARIPO (African Regional Intellectual Property Organization – http://www.aripo.org/)
OAPI (African Intellectual Property Organization – http://www.oapi.int/)
EPO (European Patent Organization – http://www.epo.org/)
GCC (Gulf Cooperation Council – https://www.gcc-sg.org/en/Pages/default.aspx)
It is evident that the scope of these organizations is more limited geographically. Therefore, the PCT procedure is preferable, unless there is a specific interest in certain member states of one of the aforementioned systems.
The PCT procedure is particularly well-suited for circumstances involving the absence of information regarding the target markets, the intention to license patented technology to third parties (as negotiations with companies tend to be time-consuming), or the absence of a prototype and uncertainty regarding the functionality of the invention. Additionally, the PCT procedure is advantageous when the original invention has been enhanced with new technical features in the interim.
The PCT is particularly well-suited for biotechnological inventions, which often necessitate a protracted development phase when compared to other inventions.
A notable disadvantage associated with the PCT is its prolongation of the patent-granting process. Furthermore, in instances of infringement, the legal recourse is less certain.
A notable disadvantage associated with this procedure is that the results of the international preliminary examination do not have obligatory status with regard to the approval of national applications.
In Figure 2 is illustrated a possible patenting strategy that can be adopted by a biotech startup.
Within the priority period (from T0 to T1), a startup may file one or more national (or provisional) patent applications, which can subsequently be consolidated into a single PCT application (at T1), with a minimal investment of €10.000. The national phases (T2) can be executed provided that the invention remains a core product of the company. The most attractive countries for the purpose of patent protection are the United States, Europe, and China (with an estimated expenditure of €50,000), as illustrated in Figure 3.
The addition of countries such as Indonesia, Brazil, and South Africa is contingent upon the presence of sufficient financial resources in the startup.
Consequently, a startup is able to safeguard the various enhancements implemented in subsequent applications and build a successful patent portfolio. This portfolio can then be utilized as a leveraging and a defensive measure against competitors.
A lack of financial resources is a primary cause of entrepreneurial failure, particularly in the initial stages of business development. Consequently, it is essential for startups to seek investment from venture capital (VC) funds to ensure they have sufficient capital to get started and to make decisions about which national phases to pursue.
A case study of a valid patent strategy is provided by the following example: an ophthalmological treatment that has been patented by Politecnico di Milano and licensed to a spin-off company, MgShell (6).
In 2017 and 2019, Politecnico di Milano filed two priority patent applications in Italy. These applications were subsequently extended through the PCT (Patent Cooperation Treaty) procedure, now expired.
As delineated in Table 2, the patent portfolio licensed to the spin-off company, encompasses the following jurisdictions: Europe, USA and Japan.
Recently, MgShell concluded a €1,140,000 round of funding from a group of investors.
This capital infusion is expected to catalyze the acceleration of MgShell’s innovative technological development and pre-clinical validation processes, while concurrently covering the expenses associated with the maintenance and prosecution of the patent portfolio.
Conclusions
Patenting is crucial for success in the biotech industry. For biotech startup companies, it is of paramount importance to possess at least one patent within their portfolio. This is crucial for safeguarding new inventions and implementing a leveraging patent strategy, which can serve as a key asset in attracting investors.
The key factors that contribute to the success of a startup are the composition of the team, the characteristics of the market, and the technological framework. A patent can confer a further competitive advantage; however, this is contingent upon the commercial success of the protected product and the effective enforceability of the patent itself.
Figure 1. Schematic representation of the decisional process.
Figure 2. Proposed sequence of actions for the establishment of a patent portfolio.
Figure 3. Schematic view of patenting costs.
Table 1. List of fees associated with the filing of a PCT application.
Table 2. List of patents licensed to MgShell.
References and notes
- Rafael Fazzi Bortolini, Marcelo Nogueira Cortimiglia, Angela de Moura Ferreira Danilevicz, Antonio Ghezzi; Lean Startup: a comprehensive historical review.
- Management Decision 23 August 2021; 59 (8): 1765–1783. https://doi.org/10.1108/MD-07-2017-0663
- Massimiliano Granieri. Intellectual Property for Managers (Law, Practice and Corporate Strategy). Luiss University Press, October 2024. ISBN 9788861051874
https://www.tdcommons.org; https://ip.com - USPTO fee schedule: https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule#Patent%20Fees (Available online, accessed on 20 August 2025)
- PCT Member States: https://www.wipo.int/en/web/pct-system/pct_contracting_states (Available online, accessed on 20 July 2025)
- MgShell website: https://www.mgshell.com/about-us/ (Available online, accessed on 20 August 2025).
