Why Your Patent Portfolio Isn’t Giving You IP Leverage

Authored by Babak Akhlaghi on February 5, 2026. We all like big numbers. A patent portfolio with hundreds or thousands of patents looks impressive on paper. It sounds good in pitch decks. It makes for nice PR.

But here’s the reality: companies with massive patent portfolios getting minimal competitive advantage from them.

The question shouldn’t be “how big is your patent portfolio?” The question is about leverage.

The Patent-as-Checkbox Syndrome

I teach my students that IP is one of the most valuable assets a company can have. But for it to be valuable, it needs to be developed strategically and deliberately.

You shouldn’t rush to file applications just for the sake of numbers or out of fear.

Most established companies have IP review processes and patent committees staffed with seasoned patent attorneys. They can identify which innovations are key to product success, which might be valuable to competitors, and which could work as blocking patents or licensing opportunities.

The problem? Most startups and smaller companies don’t have this resource.

They rush into filing applications without thinking through the strategy. Does it even make sense to file? Does it provide market advantage? Would it be better as a trade secret? What does the prior art look like? What and where should we file?

These questions need answers before you file.

Research analyzing top chemical companies found that DuPont’s patent portfolio had average technology relevance 20% lower than Dow Chemical’s and 10% lower than BASF’s. Size didn’t equal impact.

The Real Leverage Moments

Most founders think patents are about lawsuits. They aren’t.

Yes, technically patents give you exclusive rights to your invention. That exclusivity gives you the power to sue infringers.

But in practical reality, that’s not how it plays out.

Filing a patent infringement lawsuit is expensive. It takes significant time and resources. Patent litigation with more than $25 million at stake can easily exceed $10 million in attorneys’ fees. Startups don’t have that kind of money.

You shouldn’t think about patents as “I got a patent and now no one will copy me.”

You should look at patents in terms of leverage.

The question isn’t whether your patent helps you stop copying. The question is whether your patent changes how investors look at you, how competitors look at you.

Patents become important at funding, at exit, at partnership. That’s when people examine them to see if they’re relevant and provide strategic advantage.

If your patents were developed five years ago and your product has significantly evolved, they don’t give you the leverage you need.

I tell my founders: investors don’t care that you have a patent. They care about the strategy behind it.

Does your patent support valuation and acquisition? If it doesn’t protect your key product, the answer is no.

What Investors Actually Look For

I don’t want to discredit litigation entirely. That option exists and can be lucrative. Look at Masimo’s patent, which generated over $600 million in a verdict against Apple.

But that’s really only viable for big companies with deep pockets.

There are litigation funding companies that can support startups in monetizing their patent portfolios. They act on a contingency basis.  They fund the litigation, and if you win, they get a percentage of the profit. If you don’t win, they get nothing and you don’t carry the burden of expensive litigation.

But for most startups building their products and IP portfolios, the true value of patents comes at funding, exit, or partnership, not litigation.

Here’s what seasoned investors look at when evaluating your IP portfolio:

1. What was the strategy behind filing the application?
2. Does the application provide market advantage?
3. Does it protect the key product?
4. Was a patentability search conducted to determine likelihood of allowance?
5. What are the risks and exposures in implementing this product?
6. Was a freedom to operate investigation conducted to assess these risks?
7. What does the competitive landscape look like?
8. What are the technological trends?
9. Does your patent fall within a crowded area or within white space that could be strategically valuable to competitors?

Startups that are ready to answer these questions have a better chance of success.

To be clear: I’m not advocating that every startup should file a patent application. I’m advocating that you should only file if the strategy supports it.

If it doesn’t, avoid it. It’s expensive, and working with startups, I know every dollar matters.

The Due Diligence Gap

Freedom to operate investigations and patentability searches sound like basic due diligence. Yet most startups skip them.

Why? Lack of proper understanding. Expense. Likely both.

I tell my founders: there’s no reason to spend thousands of dollars on a patent application without doing at least a focused patentability search first to see what’s out there.

A search helps you identify where the landmines are so you can draft a better application around them.

Alternatively, the search might identify prior art references too close to your invention that don’t justify moving forward. The result may be disappointing at first, but it’s much better to find this now than a few years down the road with thousands of dollars spent in legal fees only to hear it from an examiner.

Same issue with freedom to operate investigations.

My practical recommendation to founders: focus on protecting your invention first, then do a focused, cost-conscious freedom to operate investigation. When the question comes up with investors, you can confidently say yes instead of no and having to explain yourself.

Strategy First, Filing Second

IP strategy has two parts: strategy and thinking, then filing if justified.

Most founders skip right through the first part into the second. Those patents usually result in weak protection.

I’m saying put stronger focus on the first part.

Identify whether you even need patent protection. Is it even available to you in light of prior art or your own public disclosure? Even if it is, focus on what to file and where to file before jumping into drafting applications as a checkbox for investors.

Investors are smart. They don’t want to know you’ve just filed an application. They want to make sure there’s a strategy behind it.

The Diagnostic Conversation

When I work with a founder who has something innovative, the first question I ask is about their business objectives in obtaining a patent.

Is it to corner the market? Attract investors? Scare competitors? Generate possible licensing revenue down the road?

This helps us determine if a patent is even a viable option. Assuming it is, we ask about their technology and product roadmap. We ensure their IP strategy aligns with their product roadmap.

Timing is another significant factor. Many of our clients practice at the very edge of technology, and securing a filing date quickly is important for them.

If that’s the case, a provisional application may be preferred. Provisional applications can also be prepared if the product isn’t fully developed.

For an application to be effective, you need to envision what the final product will look like. If you can’t, a quick provisional that captures that vision as best as possible with potential design-arounds may be preferred.

This helps you secure a filing date while getting more time to perfect the product.

Another important element: identifying competitors and looking at their patent activities. If white space can be identified in their portfolio, it may make strategic sense to file in that area even if it’s not directly aligned with your product development.

It gives you leverage over that company.

The Budget Reality

Your IP strategy has to be realistic and aligned with your budget.

I’ve seen founders tell me they want to protect everywhere. I often recommend against such broad filing because just the filing fees alone can be fatal.

My recommendation: if the budget is tight, focus on your key primary market and protect your invention there.

Same recommendation goes for more offensive filings. If the budget allows, file in white spaces where your competitors operate, even if it’s just a provisional application.

You never know, that provisional may open doors to additional investments or licensing opportunities.

The key is planting seeds now to enable your licensing team in the future. Strategic filing early in key technology spaces provides you with this opportunity.

Deliberate Speed

Move quickly but deliberately.

Think before you file. If that thinking and strategy dictate quick filing, then do a quick filing. If it says don’t file, then don’t file.

If it says the invention isn’t ready for filing and needs more technical detail to provide meaningful protection, wait for those additional technical details.

The Enforcement Weak Link

Enforcement is often the weakest link in IP strategy.

For startups, I don’t recommend expensive comprehensive monitoring services right out of the gate. What I do recommend is strategic awareness.

First, keep tabs on your direct competitors. Follow their product launches, their patent filings, their press releases. You’d be surprised how often infringement happens in plain sight.

Second, set up basic alerts for your key technology terms and your patent numbers. Google Scholar, patent databases, even LinkedIn can give you signals when competitors move into your space.

Third, build relationships in your industry. Attend conferences. Join industry groups. Often you’ll hear about potential infringement through the grapevine before you’d ever catch it through formal monitoring.

But here’s the most important part: you need to decide upfront what you’re willing to do if you find infringement.

Are you going to send a cease and desist? Are you open to licensing discussions? Will you actually litigate if necessary?

Because if you’re not willing to act, monitoring is just an expensive way to make yourself angry.

The enforcement strategy has to be realistic about your resources and your risk tolerance.

Sometimes the best enforcement is simply being known in your industry as someone who takes their IP seriously. That reputation alone can be a deterrent.

Building That Reputation

I wouldn’t jump into litigation. Lawsuits are expensive, time-consuming, and the outcome is never certain. They should be the last resort.

Sometimes a cease and desist letter can be effective. If that’s not effective, potential licensing may work. If that still doesn’t answer the call, you have to seriously consider how much they’re taking away from your market.

If it’s minimal, it may not be worth a lawsuit. If it’s significant, I would consider filing an infringement action.

There are options. Litigation funding is a hot topic these days. With patents becoming stronger through actions of the USPTO, for example, effectively eliminating IPR (the grant of IPR petitions has significantly reduced under new USPTO leadership), many are looking to invest in this area.

You can involve them to mitigate risk.

Plaintiff patent firms are also becoming increasingly active, even among more established firms. I recently met an attorney from a well-known law firm that focuses on plaintiff litigation on contingency.

However, these firms usually have very strict requirements on cases they’re taking. They go under severe vetting, which is only natural given that they’ll be fronting all expenses and only get paid if they win.

The Integration Imperative

Here’s the mistake that kills most IP strategies: founders file an application and then forget about patent strategy entirely.

Your IP strategy should be a living, breathing thing. Your company evolves. Your product evolves. Your IP strategy needs to evolve with them.

IP strategy should be aligned with your product roadmap, not divorced from it.

Patents are static. They capture the invention at a certain point in time. Even well-drafted patents that anticipate future implementations have limits. No patent attorney has a crystal ball.

A product that’s valuable today may not be valuable tomorrow. The trajectory of your company may completely change. You need to revisit your IP strategy to determine whether it still covers your new direction.

At every turn where your product evolves, you should ask: does this justify updating my filing? Does this provide me with competitive advantage?

If so, revisit the original application and see if it adequately covers the improvement. If not, consider a new filing.

If your patent doesn’t track your product development, it will lose its power. It won’t be useful when you need it.

That’s how leverage is lost.

The Fundamental Shift

Strategy first, file second.

That’s the one fundamental shift in mindset that would transform how founders think about patents.

Stop treating patents as a checkbox exercise. Stop accumulating them for the sake of impressive numbers.

Start asking whether each patent filing serves a strategic purpose. Start aligning your IP strategy with your business strategy and product roadmap.

Start thinking about leverage, not just protection.

Because at the end of the day, a patent portfolio that doesn’t give you leverage is just expensive paper. And in a world where intangible assets make up approximately 90% of the market value of the S&P 500, you can’t afford to get this wrong.

Your IP should be working for you, at funding rounds, at exit, in partnerships, and yes, sometimes in enforcement.

But only if you build it strategically from the start.

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