I read with interest Steve Murchie’s recent blog, “Patently Absurd,” on software patents. It's very topical and should be required reading for small startup companies as they navigate their way through the early years.

It is specifically relevant as the small startup will often be asked by investors, “What is your intellectual property strategy?”

“I don't know” is probably not the best answer. At the same time, responding, “I intend to spend $100,000 to pursue a patent" that may not be granted and "budget another $2 million to defend against patent infringement” also seems a bit sketchy.

In a Larry Dignan’s recent blog, “Jonathan Schwartz: How to play patent games with Steve Jobs, Bill Gates”, one quickly learns that these industry giants have NO PROBLEM threatening others with their vast patent portfolios. What small software start-up is capitalized to face a patent litigation threat from one of these giants that could cost $2 million?

The truth is the small software company does not have a “patent arsenal” and, operating with limited resources, is very vulnerable to the type of threats described in Mr. Dignan’s blog. This leads to Mr. Murchie’s conclusion: “The reality is that for small companies—startups and even established SMBs—patents are an ugly trap.” So what's the right answer?

Here's my strategy. I don't get caught up in the patent games by wasting valuable time developing incredibly complex (thus expensive) patent portfolios. I keep my focus on innovation, developing and shipping great product, and satisfying the customer. A small company is nimbler and more adept than larger companies and needs to build on these values to its advantage.

Think this sounds overly simplistic? My approach has merit. The small software company—like yours and mine—gains very little by entering into a “mutually assured destruction” patent litigation battle when a larger, better-funded competitor attacks. The big guys have lots of lawyers, it's true. But they also have lots to lose. If the big company is not careful and skillful in litigation, it could expose itself to claims against, and big losses within, its own patent. Moreover, the big companies have no interest in attacking small companies as we are generally of little threat.

There are ways to patent your idea for as little as $10,000. While $10,000 is a lot of money, it's much better than the alternative. I'm not suggesting that you shouldn't retain a good patent attorney. But do your homework and find a good patent attorney who will work within your budget. This way you'll have to do much of the initial patent authoring work yourself and spend a goodly amount of time doing research using the PTO’s online tools. You can do it.

No one wins in a long, protracted legal battle—other than the attorneys. Brad Feld posted a great blog recently on this subject: "Why the Decks are Stacked Against Software Startups in Patent Litigation." His advice is as good as it comes. The bottom line is this: When a big company unleashes its unlimited resources on you, it's best to find an early settlement, if possible.

The small software company will have many opportunities to be distracted in its early days. Your time is one of your greatest resources. It's important to stay focused. The best advice I can offer is to build great product and make your customers happy. And don’t get caught up playing the patent games.