How do you protect the key features of your product without a patent?

After doing some early research into patents, I concluded that:

• it was going to cost me $10k or so per patent
• it would be a huge amount of time and effort for me
• it would take at least a couple of years for the patents to be granted
• I wouldn't have the money to enforce them
• small companies would probably ignore them anyway

So I was confident in asserting that patents were a waste of time (for my needs).

In the 6 months since, a few things have conspired to change my mind:

• we're close to raising investment, and investors care about patents because they provide a hook on which you can hang a valuation
• concomitantly, they make you more acquirable
• I've started to realize that patents' primary value is as a deterrent against large companies who might otherwise lumber into competition

It's this final point - that patents provide a watered-down 'mutually assured destruction' kind of deterrent against incumbents and larger companies that seems most important now. If you can protect yourself with patents, you make it much more likely that larger companies will partner with, license from or acquire you, rather than compete with you.

Even if you were to get a patent ($5K-$10K investment), it wouldn't help you much. Are you really going to pay your legal team to fight their legal team?

The reality is, anyone with enough money and resources can always take any idea and implement it. There's no getting aound that, but the good news is... it probably won't happen.

And besides, I wouldn't worry about the bigger players for now. You already have an advantage over them: you're nimble and can offer better serivce at a better price. Use that to your advantage.

This will sound like a cop-out answer, but I think you just shouldn't worry about it at all.

In all software companies, there's always the chance that another company will copy you, or beat you. Existing competitors can and will copy your good ideas. New competitors will appear.

Google or Microsoft or Amazon can do anything they want at any time, and they have hoards of really smart developers and a massive sales channel.

And there's always the next lean-and-mean startup.

Oh, and there's open source!

So my advice is: Just be awesome. Do what you think is best. Explain exactly what pain you solve so anyone looking at your site knows you're it.

Act like: If I do this perfectly, people won't even look at competition. It's not exactly true (although that's true sometimes), but it's all you can do.

(Even getting that patent wouldn't help, but that's another story...)

Depends, Is your work really innovative, and worth a patent. Or just useless crap like 37Signals products?
If your work is novel, and involves a clever application of a novel algorithm, I would suggest you to get a patent.
A lot of companies buy smaller companies for their IP.

In my opinion a pretty good example is how www.mint.com was able to develop a viable business around the aggregation of accounts and provide substantial value to its users. Intuit could have easily copied what they were doing but chose to buy them instead.

Like Jason and Alex mentioned in their comments focus on developing the best product/service that you can without worrying about being copied or replicated.

Wishing you the best of luck in your venture.

Depending on when you file for a patent (if you do), you may not be able to get it anyway. In software, you've really got to be innovative - and presumably the old idea would have to be your own anyway.

I agree with the others - plan, prepare, then go go go! and don't worry about the patent or the competitors.

I also agree that if you do have a patent, it gives investors something to "touch and feel" and they like that. That being said, if the patent route is for you and you have multiple ideas to patent, try to boil them down to a single important one (the real secret sauce). If you get funding, you could eventually get the others (if they're still important). Investors like knowing there's more you could patent as well.

Good luck.

Chances are that big players will not notice you until it's too late. Just make sure that you constantly improve your product resp. service so they have a hard to catch on with you. Eventually, they might choose to offer you $$$ to buy your company, which might not be the worst possible scenario for you ;-)

I think that you must prepare and be extremely thorough with your competitive analysis, get your databases in order, your CRM or customer databases up to speed, get your website fully updated with a press kit, utilize Web 2.0 as much as possible, because it's a very strong tool now (have those campaigns mapped out, such as what you will tweet, gather your followers - that is, if you have a potential market segment on the social networks).

When your gate opens, you run, run like the wind!

Good answers here. Don't spend a millisecond worrying about patents or the big guys copying your idea. Put the pedal to the metal and build out your product the way you envision it, try to get lots of users, try to generate some revenues and keep iterating. Even if they make an identical version of your product, they will be marketing it to a completely different audience.

I'm no IT expert, but I do know that keeping software under wraps is almost impossible. Accordingly, there are only two possibilities here: First, the marketing approach: stay one step ahead - make your software smarter, more use-friendly, easier on the eye, and keep updating.

Second, the commercial approach: think about acutally working with the big boys, rather than running from them - if your product is a good fit with theirs, they may be interested in licensing it in to save development time.