Intellectual property (IP) is one of the most important assets many technology companies will ever own. Patents are a key part of a company’s IP portfolio. Investors often view a company’s patent portfolio as a signal of innovation, defensibility, and long-term value. Yet patent strategy is rarely at the top of a founder’s to-do list in the early stages of product development.  Understandably, the focus often is on getting a product to market, finding customers, and raising capital. Seeking patent protection can fall down priority lists. But overlooking patents and other IP assets can leave a technology company exposed, sometimes fatally so, if competitors copy a product or if disclosures prevent future patent protection.

This post outlines some of the fundamental decisions every tech company should understand, including whether to start with a provisional or non-provisional patent application, how to weigh patents against trade secrets, and the practical cost and timing considerations that shape a technology company’s IP strategy.

Provisional vs. Non-Provisional Applications

For technology companies, this decision often ties directly to product roadmaps and investor timelines. A provisional can align with beta releases or funding rounds, while non-provisionals may be timed to coincide with major product launches or strategic partnerships.

An early-decision technology companies may face is whether to begin with a provisional patent application or jump directly to a non-provisional filing.

A provisional application is often compared to planting a flag in the ground. It can be prepared relatively quickly, entails less formality, and requires far less expense. By filing a provisional application, a tech company secures a priority date, the all-important timestamp in patent law that establishes who invented something first. Provisionals allow companies to mark products as “patent pending” and give them a 12-month window to test the market, refine prototypes, or secure funding before deciding whether to invest in the full non-provisional application.

A non-provisional application, by contrast, is the complete application that gets examined by the U.S. Patent and Trademark Office (USPTO). It must include formal claims, supporting drawings, and a thorough written description. If granted, it confers enforceable rights for up to 20 years from the filing date.  In addition, a patent’s term is measured from the earliest non-provisional filing date. That means filing a provisional can extend the ultimate life of a patent, and it defers some of the cost until non-provisional filing. This gives technology companies financial breathing room, especially during their startup phase.

Timing is critical. Public disclosures, product launches, and even investor presentations disclosing an invention can start the one-year statutory clock to file a patent application. If a provisional or non-provisional is not filed within that year, the invention may be barred from patent protection altogether. For technology companies moving quickly, it is often better to file a lean but adequate provisional than risk losing rights entirely.

Patent vs. Trade Secret

Technology companies should carefully consider how customer-facing versus backend innovations are protected. For example, user interface features may be better suited for patent protection, while algorithms and data processing methods may be more valuable kept as trade secrets.

Not every innovation should be patented. Some are better kept as trade secrets. The distinction often comes down to one question: Can your competitors reverse engineer it?

Patents are powerful because they create a legal monopoly. For up to 20 years, no one else can make, use, or sell your invention without your permission. They allow owners to license and commercialize the patent to others. But the tradeoff is disclosure: The patent application must explain the invention in enough detail that someone skilled in the field could replicate it. Once that information is published, competitors can learn from it — even if they wait until the patent expires.

Trade secrets work differently. Trade secret laws (e.g., the Defend Trade Secrets Act of 2016) protect confidential information that gives a company a competitive edge, so long as it remains secret. Crucially, this protection can last indefinitely. Examples include formulas, algorithms, or manufacturing methods. Coca-Cola’s recipe and Google’s search algorithm are classic trade secrets. Unlike patents, trade secret protection can last forever. But there are risks: If someone independently develops the same idea, or figures it out through reverse engineering, the protection vanishes.

For technology companies, the decision often hinges on how the innovation reaches the market. If the product will be sold widely and its workings can be discovered, a patent may be the safer choice. If the innovation is embedded in internal processes or software code that is not publicly exposed, keeping it as a trade secret might make more sense.

Timeline and Cost Considerations

For technology companies, budgeting for IP protection is often weighed against software development, cloud infrastructure, and customer acquisition costs. Integrating patent filings into overall financial planning ensures that IP does not become an afterthought but a deliberate part of the growth strategy.

Every technology company operates with limited resources, and patent strategy must be realistic about cost, especially early on. A provisional can often be prepared in a matter of days and filed for a few thousand dollars. This makes it attractive when a company is racing toward a demo day, fundraising pitch, or product launch and needs to secure rights quickly.

A non-provisional, however, represents a much larger commitment. The initial filing may cost tens of thousands of dollars, and the prosecution process, which can stretch three to five years, involves additional attorney fees and USPTO charges. Periodic maintenance fees must be paid once the patent issues. If a company plans to seek patents internationally, the costs multiply.  Managing those expenses while still funding product development presents a challenge for early technology companies.

Still, a thoughtful IP strategy pays dividends. Even pending applications can increase valuation during fundraising or provide leverage in partnerships. For companies considering acquisition, patents can be the crown jewels that make the deal attractive. The key is to align patent spending with business milestones — file provisionals to protect early concepts, convert to non-provisionals as funding allows, and prioritize inventions most central to the company’s competitive edge.

Final Thoughts

Ultimately, technology companies that view IP as an integrated part of their technology strategy, not just a legal checkbox, are best positioned to leverage patents and trade secrets for competitive advantage.

Patents and trade secrets are tools, not ends in themselves. The best strategy depends on a company’s product, business model, and growth trajectory. File too late, and rights may be lost forever.  File too broadly or too often, and scarce startup resources may be drained with little return. The companies that succeed are the ones that treat IP as a business asset, not just a legal requirement.

These are only some of the important issues technology companies may face when protecting their innovations, and every situation is different. Technology companies can navigate these challenges by working with legal counsel experienced in protecting IP rights in their technology. By understanding the basics and working with legal counsel to plan ahead, technology companies can protect their innovations, attract investors, commercialize their IP, and build long-term value around their ideas. In short, patents matter, and for a technology company, the right patent strategy can be just as important as the right product or the right team.