---
title: "The value of a patent to a startup"
description: "Learn why startups should view patents differently than Fortune 500s - key insights on patent strategy, enforcement costs, and maximizing value as downside protection."
categories: ["startups","best practices"]
keywords: ["Theory Ventures","startup patents","venture capital","patent strategy","intellectual property","legal costs for startups","downside protection","patent enforcement","startup best practices","Vlingo Nuance case"]
ai_summary: "Startups should view patents as downside protection rather than offensive tools, focusing on strategic value and legal feasibility."
date: 2012-10-11
lastmod: 2026-07-23
canonical_url: https://www.tomtunguz.com/what-is-a-patents-worth-to-a-startup/
author: "Tomasz Tunguz"
---

<p>For Fortune 500 companies, patents can be offensive and defensive weapons generating billions of dollars worth of royalty and licensing revenues. </p>
<blockquote class="large">
<p>…if someone at Apple can dream it up, then we should apply for a patent, because even if we never build it, it’s a defensive tool,”
<em>Nancy R. Heinen, Apple’s former general counsel</em>  </p>
</blockquote>
<p><a href="http://www.nytimes.com/2012/10/08/technology/patent-wars-among-tech-giants-can-stifle-competition.html?pagewanted=3&amp;_r=1&amp;hp">The Patent, as a Sword</a>: </p>

<p>But startups shouldn’t approach patents the same way large companies do.  Instead, founders should view patents as downside protection - an asset to be valued during a fire-sale of the business. </p>

<p>For startups, patents are specious barriers-to-entry. Unlike large corporate patent owners who wield patents in defense of their businesses, founders can’t afford to enforce patents. Startups simply don’t have the legal budgets to bankroll lengthy legal processes. </p>

<p>Vlingo fought Nuance for 3 years in court to defend their patents - only to win a Pyrrhic victory. The legal battle exhausted the company’s assets and Vlingo sold to Nuance a short while later for the value of the patents. </p>

<p>File your patent, mention it on a pitch deck slide, and then tuck it in your back pocket as a trump card to play when your startup has amassed the legal war chest to enforce it.</p>