Ideas are everywhere. But protecting them? That’s where the real story begins.
Welcome to The Patent Room, a space where innovation meets insight. Whether you are an aspiring inventor, a founder building something extraordinary, or just someone curious about how the world of patents works, this series is designed for you. We are not here to throw legal jargon or heavy handbooks your way. Instead, we are pulling back the curtain on the patent world one story, one myth, one question at a time.
Understanding IP is not just for lawyers and corporates; it is for anyone who dares to create.
So, grab your curiosity. Take a seat. The door to The Patent Room is already Open. Come explore with us.
1. The Innovation Illusion
Imagine you have invented something groundbreaking. Your patent application is filed, but the grant is still months, maybe years away. You start wondering:
“Does my patent even have value until it’s granted?”
It’s a question we hear all the time from Inventors, founders, creators, and even investors.
The short answer? Yes, pending patents can hold value. But that value looks different from a granted one.
Let’s explore how.
2. The Legal Backbone
Under the Indian Patents Act, 1970, there is a clear legal distinction between a patent application (pending) and a granted patent.
2.1 Pending Patent Application
As per Section 11A (7) (Publication of application), once your application is published (after 18 months unless early publication is requested), you gain provisional rights.
What does that mean?
- You can start using “Patent Pending” to alert the world.
- If someone uses your invention after publication and your patent is eventually granted, you can seek compensation, but only for acts done after the date of publication.
- You cannot sue for infringement while the patent is still pending.
2.2 Granted Patent
Once your patent is granted, Section 48 (Rights of Patentees) kicks in.
This gives you exclusive legal rights to:
- Make, use, sell, or import your invention.
- Stop others from doing the same without your permission.
- Sue for infringement and claim damages.
- License or assign your patent to others.
This is where your idea becomes enforceable property protected, tradable, and powerful.
3. The IP Valuation Perspective
So, we understand the legal side. But here’s the part that often drives real-world decision-making and valuation.
How much is your patent actually worth? And does its status pending vs granted change that?
Yes, it does. But not in the way you might think.
Let’s break it down using the three main valuation methods recognized globally.
3.1 Cost-Based Valuation
What it means: The patent is valued based on the money spent developing and protecting it.
- For a pending patent, this includes R&D, prototype development, attorney fees, and filing costs.
- For a granted patent, it also includes prosecution expenses, office action responses, and sometimes opportunity costs.
Strength: Useful for startups to show investors how much they have invested in innovation. Limitation: Does not reflect future earning potential or market value.
From a commercial perspective, you spent ₹10 lakh to create and file this innovation. So that’s its current value base.
3.2 Market-Based Valuation
What it means: Value is calculated by comparing similar patents that have been sold, licensed, or acquired.
- For a granted patent, it is easier to find a comparable because it is officially recognized.
- For a pending patent, market-based comparisons are rare unless in a hot sector (e.g., AI, MedTech).
Strength: Good for mergers, acquisitions, and licensing deals. Limitation: Market data is often confidential or scarce.
From a commercial perspective, other companies paid ₹50 lakh for similar patents, so mine may be worth something close.
3.3 Income-Based Valuation
What it means: Estimates the future income (royalties, sales, exclusivity gains) the patent can generate.
- For a granted patent, actual or projected revenue streams can be modelled.
- For a pending patent, this becomes speculative, depending on the chances of grant and market success.
Strength: Most realistic for mature businesses or commercialized inventions. Limitation: Relies on financial forecasts and assumes success.
From a commercial perspective, if I license this patent at ₹5 per product and sell 1 million units, I earn ₹50 lakh. Discounted for risk, that’s my IP value.
4. So, does a Pending Patent Have Real Value?
Absolutely. While it may not have the same enforceable power as a granted patent, pending patents bring strategic and commercial value, especially when you’re raising funds or showcasing innovation leadership.
Strategic Advantages of Pending Patents
- Signals innovation: Investors love to see active IP development.
- Early filing date protection: Ensures you are first in line if disputes arise.
- Deters copycats: Even a pending status can discourage competitors.
- Builds deal pipeline: Startups with patent filings get higher attention in due diligence.
- Boosts market perception: Shows you are serious about protecting your tech.
5. Myth vs Fact: A Quick Reality Check
Many people believe that a patent holds no value until it’s officially granted. But that’s a myth. Even pending patents can offer provisional rights and carry strategic value, especially when you’re positioning your invention in the market or attracting attention.
Another common misconception is that only granted patents impress investors. In reality, many early-stage startups raise funding based on a well-drafted pending application that shows serious intent and innovation potential.
Finally, it’s often assumed that patent valuation is purely legal, but that’s far from true. Strong valuation involves a blend of finance, market potential, and narrative strategy. It’s not just about what’s written in the claim; it’s about how the invention fits into a broader business story.
6. Final Words: What Should Clients, Founders, and Inventors Know?
- Pending ≠ powerless. A pending patent is like a seed full of potential.
- Granted = enforceable. It’s your legal sword ready for court, market, or negotiation table.
- Don’t wait for the grant to build value; your IP strategy starts from Day 1 of filing.
- For startups: Patents are not just legal protection; they are business assets. Investors don’t just fund ideas; they fund protected ideas.
So, whether your patent is pending or granted, don’t wait for a certificate to believe in your invention. Protect it, position it, and let it work for you. In the world of innovation, timing is everything, and strategy is your edge.
Your idea deserves more than a shelf; it deserves a strong IP plan. Let’s build it right, from the START.