A startup’s patent portfolio can be thought of in two distinct patent types: prophetic patents and non-prophetic. Non-prophetic patents can also be thought of as “data-driven” patents. Prophetic patents are a necessary evil, but they can be very damaging to a startup when used badly.
Prophetic patents are those that are almost purely forward-looking. These patents are filed prior to raising funds or at least before going to market. They are prophetic in the sense that there are guesses about how the technology will work and how the market will adopt the technology.
Non-prophetic or “data-driven” patents cover things for which data exists. The data may be performance-related test data, or market-related data that comes from customer behavior. The patents that come from market-related data tend to be some of the most valuable patents in a portfolio.
The idea of “data-driven” patents is that there is substantive data that supports the business proposition of the patent. The substantive data can be test results, but the most important data are market results. When the patent captures a deep market insight, such as a customer pain point, that patent has strong commercial value.
In general, data-driven patents will have much more value than prophetic patents for two reasons:
- There is less guesswork about the technology, which means the claims will be more meaningful.
- The decision to protect something has real business value, meaning the money is well spent.
The data-driven patents can also be thought of as risk-reduced patents. The risk of a patent is the technology risk and the market risk. When data exists on either the technology or market risk, the overall risk of a patent goes down. 
A startup needs prophetic patents at the very beginning to get started. These will protect the basic idea of the business’s product, but it is critical to avoid creating downstream problems with these patents. As the startup grows, it will understand the markets better, and it will solve technical problems on the way to realizing its goal.
These two elements – understanding the markets and solving problems along the way – are where the real gems of a patent portfolio lie. However, these assumptions cannot be verified when the first patent is written. The discussion below provides solutions to handling this dilemma.
Filing the First Patent
The first patent is typically filed prior to entering the market. This prophetic patent might have several different ways a product may be designed and capture a couple different ways the product may go to market.
At the point that the patent is filed, there are only guesses about how the market will respond. These guesses may be risk-reduced by doing market research, testing landing page conversions, or just talking with potential customers. However, the real market response comes when customers break out their credit cards and pay money for the product.
The purpose of the first patent application is to clear some space so that the company can keep competitors away. This patent application is done with the highest degree of uncertainty about both the technology and the market. It is critical to note that not only is the entrepreneur just beginning the journey at this point, but so is the patent attorney. Neither player knows which elements of the invention will turn out to be important.
The first patent will NOT be the most important patent in the portfolio, so do not treat it like it is.
Conceptually, the first patent might be merely a placeholder or framework into which other patents will follow. Practically, this patent application must capture the one or two points of novelty that differentiate the product – and nothing more.
The claiming strategy for the first patent should cover the points of novelty of the product as it will be introduced, and the claims should be somewhat broader than normal. The strategy is to get some feedback from the examiner (i.e., a rejection) and get a better lay of the land for what could be patented in this area. 
Do NOT put too much information in the first patent.
Far too many inventors and entrepreneurs file gigantic, self-written prophetic provisional applications. These are a very bad practice.
“Kitchen sink” patents – where everything is thrown in – can cause endless problems down the road. These patent applications are brain dumps of as much information as possible. Some people even copy pages from their lab notebooks and stuff them into a provisional application, mistakenly thinking that somehow they are protected.
This is one of the worst practices.
Disclosing too much information prevents getting a patent on the actual invention when the research is actually invested to figure out how to do it. 
Everything in a patent application is prior art which will be used against the company down the road. This includes provisional applications, which are publicaly available once their non-provisional cousins become public.
When a provisional application states that something is possible but does not explain how to do it, an examiner can still cite it as prior art.
The scenario: An inventor of an artificial sponge product writes and files a “kitchen sink” provisional application and happens to mention that fibers could be included in the product. The inventor had a guess that fibers could be added, and the concept was on the long list of things to explore.
Three years later, there is a huge need in the market for stronger sponge products. In fact, several customers were offering to pay an enormous premium to have the stronger products.
So, the inventor tries adding fibers to the product. It turns out that adding fibers was very difficult, and there was a lot of development to determine how to distribute the fibers in suspension and how to keep the fibers in the product while it cures, and the length of fibers really made a big difference.
Proud of the accomplishment, the company submits a patent application for the fiber, unaware that there was a mere mention of the fibers in the original patent application.
The examiner rejects the claims stating: “The inventor said that it was possible to add fibers to the mix in the provisional application three years ago”.
Now the company is stuck. They cannot argue with their original patent without weakening it completely, nor can they argue that their new patent application deserves broad coverage.
Even if the company is able to save the second patent by claiming priority to the first patent, the company loses all international rights to the second invention.
The purpose of the first patent is to cover the “big” point of novelty of a business, but the next batch of patents are where the real protection begins.
EDITORIAL NOTE: This is an excerpt from “Investing In Patents” by Russ Krajec, CEO of BlueIron IP, a patent investment company that finances patents for startup companies. “Investing In Patents” is available on Amazon in paperback and Kindle.
 One of the fascinating aspects of patents is that they must have inherent risk. If all of the risks are removed, the invention becomes more “obvious” and it becomes more difficult to be allowed by the examiner. Every patent has to have an “inventive step” or “ah-ha moment”.
 Often, this is done by having both relatively broad and relatively narrow claims. The narrow claims are designed to be allowed quickly, giving the startup a patent it can use for business, and the broad claims force the examiner to give a landscape of the allowable subject matter.
 Making unnecessary public disclosure of trade secrets is also damaging to the company.
 This is one example of why it is a good idea to keep continuation applications open on early patents.