I have been granted a patent by the United States Patent Office. I am seeking funds to help with the manufacturing in China.

Congratulations on your patent.

By obtaining a patent, you have obtained Intellectual Property (IP) protection for your product. In order for a competitor to directly compete with your device, they must either pay you a licensing fee for the use of your patented design or create an alternative design that accomplishes the same purpose.

In a broad sense, you have erected a barrier to entry for competitors. Barriers to entry can be created by a dominant brand position, capital resources, unique product capabilities, proprietary sales channels, vendor and customer relationships, etc. All of those barriers to entry are market based.

A patent is a legal barrier to entry in a specific market. In your case, you have a U.S. patent, so your design is protected in the U.S. market. A country specific patent protects products in that country. An International Patent protects a design in all countries who are party to the international patent agreement.

The burden of any legal barrier to entry such as a patent or copyright is that it is incumbent on you, the patent holder, to enforce your rights. That means you must police the marketplace to discover infringing products and file (and pay for) legal action to stop the infringing product’s sales.

The upside of a patent is that it provides legal and enforceable IP protection. The downside is that you need the required capital and legal resources to enforce your patent.

For instance, if a multinational corporation decided to duplicate your device, you would have very little recourse against their comparatively unlimited capital resources and buildings full of lawyers. The same is true if a company in China duplicates your device and floods the U.S. market with knock-offs. In both cases, you are legally in the right but practically without recourse.

In your case, the biggest upside for you of having the patent is that it makes your pitch for startup capital much stronger. There is a big difference between pitching an idea and pitching a patented product that you have in production.

With any pitch, lead with and emphasize your strengths. Feature your patent and your in-production status. At the same time, realize that those are merely two factors of many in the potential investment. You still need to present a compelling story of unmet market need, a growing market that is appropriately sized for the investment you are seeking and a team capable of fulfilling your vision for the company.

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More information on patents is available here:

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