Patent Strategy for Growing Tech Companies: A Practical Guide

Most tech founders think about patents the wrong way. They assume a patent protects a clever invention, a technical breakthrough, or a line of code. But that framing misses the point entirely. Patents protect your business: your margins, your pricing power, and your investors' capital.

My name is Ola Wassvik, CCO and co-founder of Lightbringer. Over the past two decades as a deep tech CTO, I have focused heavily on IP and patents. This guide shares the frameworks I have developed for thinking about patent strategy as a business tool, not just a legal one.

The Core Mindset Shift: You're Protecting the Business

The most important thing to understand about patents is this: technology without revenue or investment is completely unprotected. A patent with no business behind it is a nice plaque on the wall, nothing more.

The real goal of a patent portfolio is to protect investor capital, future revenue, and above all, your margins. When you hold a patent monopoly, you control your pricing and can maintain the 50 to 70 percent margins that make a technology company truly valuable. The moment a competitor enters the market with a comparable product, your margins erode, fast. Even if their product is inferior.

From my own experience: when we were selling for a million dollars a year, no one cared about what we were doing. They started caring when we hit 15 to 20 million. Then people approached saying we were infringing their patents, or started copying our products. It really took off once we hit the 30 million dollar revenue mark.

Patents do not just matter when you are already big. They protect you because you will be big.

Defensive Patent Strategy: Protect Your Freedom to Operate

For most tech companies, the right starting point is a defensive patent strategy. Its goals are twofold: prevent competitors from copying your products, and ensure you have the freedom to sell without being blocked by someone else's patents.

A practical framework is the 1 to 2 percent rule: spend 1 to 2 percent of your total investment or projected revenue on patents annually. Think of it as business insurance. If you raise a 10 million euro seed round, you should be allocating 100,000 to 200,000 euros toward your patent portfolio. According to a 2023 study by the EPO and EUIPO, startups that file patents are up to 10 times more likely to secure follow-on funding, underscoring just how much IP signals value to investors.

Crucially, this spend scales with capital and revenue, not with how technically complex your product is, or how many engineering hours went into building it. A product with relatively simple technology but 50 million dollars in projected revenue demands significantly more patent investment than a niche innovation targeting a much smaller market.

The biggest risk most companies face is not that someone steals their core technology. It is price pressure. The moment a good enough competitor enters your market, your pricing power erodes. A well-constructed patent portfolio makes entering your market costly and risky for competitors, buying you the time to grow and protect your margins.

Licensing Strategy: When Patents Are Your Product

Not every company should be building a defensive portfolio. If your business model revolves around licensing, rather than manufacturing and selling, patents are not just protection: they are your primary asset.

This is common in sectors like semiconductors and telecommunications, where production infrastructure is prohibitively expensive and partnerships are the default route to market. In these cases, the 10 to 1 rule applies: target at least 10 times the revenue relative to what you spend on patents.

If patents are your product, filing volume directly correlates with business value. For licensing companies, the patent budget is not a cost. It is the mechanism by which you grow.

Idea Supply Is Never the Constraint

One of the most common misconceptions about scaling a patent portfolio is that you will eventually run out of ideas. You will not.

You can patent improvements that are just 1 percent better than the competition, or 1 percent better than your own prior work. As long as your team is actively developing technology, there are always patentable ideas. The only real constraint is budget. Even the largest companies in the world rarely exhaust their pipeline of patentable concepts. If you are worried about idea supply, it is almost certainly a process problem, not a technology problem.

Where to File: The 90% Revenue Rule

A question that comes up constantly: which countries should you actually file in?

Many companies get this wrong, spreading a single patent across 20 or more jurisdictions, including markets where they have virtually no revenue. A more disciplined approach: identify where 90 percent of your revenue comes from, and file there. The USPTO patent basics guide is a useful starting point for understanding US filing requirements.

For most Western tech companies, the US and Europe cover roughly 80 percent of revenue on their own. Adding Japan and South Korea typically pushes you past 90 percent. China is a special case: it can be an extremely powerful market, but domestic companies are treated very differently from international ones. If China is a meaningful part of your addressable market, consider partnering with a Chinese company and treating those filings as a separate strategic tool.

The underlying logic: a single patent can be invalidated. Multiple patents, each targeting your core markets, dramatically reduce the risk of your portfolio being circumvented. Bet on multiple horses.

Building Your Portfolio by Funding Stage

How you approach patents should evolve as your company grows.

Pre-seed: Your first patent is what I call the checkbox patent. File it broadly. It will not protect you forever, but it signals seriousness to investors and establishes a foundation of freedom to operate. The goal is to get from pre-seed to seed, not to build a complete portfolio in one step.

Seed stage: With roughly 5 million euros raised, target 50,000 to 100,000 euros in patent spend and work toward around five patents. The priority at this stage is demonstrating strategy and competence: conceptual patents, component patents, product patents, system patents. You are signalling to investors that you have a clear plan to scale the portfolio as funding grows.

Series A and beyond: A serious deep tech company at Series A typically has 20 to 25 patents and genuine protection for at least one core product line. This is when investors bring in technical experts to scrutinize your IP. If you cannot articulate your patent roadmap at this stage, you risk losing the deal. As you scale further, the CFO becomes increasingly involved, especially for licensing companies, where the patent budget is a direct driver of company value.

Defensive vs. Licensing: It's a Spectrum

In practice, most companies fall somewhere between pure defensive and pure licensing. You might have high-margin core products in Western markets that demand full defensive protection, while other products, or partnerships in harder-to-enter markets like Japan or Korea, call for a licensing-oriented approach. You can apply different strategies per business area and per product.

One critical rule of thumb: never patent your secret sauce. If a competitor could not replicate your approach without direct access to your source code or proprietary manufacturing process, keep it as a trade secret. The goal is not to maximise the number of patents filed. It is to file the right patents, in the right places, at the right time.

Conclusion

Patent strategy is not about protecting technology. It is about protecting the business you are building: the margins, the revenue, and the trust of investors and customers who believe in it. Get the mindset right, scale your spend in proportion to investment and revenue, and treat your patent portfolio as the business insurance it truly is.

Want to go deeper? The WIPO Enterprising Ideas guide is a great free resource for startups navigating IP strategy. Or reach out to our team at Lightbringer to discuss what a smart patent strategy looks like for your company.