Great news: The Oater is patent approved!

07-24-2025

On July 24th, 2025, The Oater received its final patent approval for its long standing patent application at the DPMA from January 26th, 2023. Furthermore, The Oater received approval at the EPO on August 27th, 2025. This feels big - however, it took 30 months from submission to acceptance. Multiple rounds of review, examiner reports, claim adjustments, and substantial costs were involved.

So why go through it? Why should startups — resource-constrained by design — spend time and capital on intellectual property? And could that money have been used more effectively elsewhere? We will investigate on that issue in this article.

Table of contents

  1. Context: Teece on innovation and appropriability
  2. Reviewing The Oater’s innovation, appropriability regime, and market power
  3. A different viewpoint: IP as a signaling device for investors
    1. The time to file was yesterday. Yesterday four years ago.
    2. IP is expensive, slow, and mostly optional
  4. Looking ahead
  5. References

Context: Teece on innovation and appropriability

Disclaimer

This blog post holds my individual views only. They are not associated with my work at The Oater. The Oater is a company with more than one opinion. We may pursue corporate goals that are not necessarily congruent with the individual goals of certain stakeholders.

To set the stage: David J. Teece’s work from 1986, Profiting from Technological Innovation, offers a foundational insight on innovator/imitator interaction and how and when up- and downstream suppliers may also benefit. Despite being written almost 40 years ago, the concepts remain shockingly accurate and can even be applied to today’s AI revolution.

Teece acknowledges that innovators rarely succeed through invention alone. In fact, innovators might even loose their market advantage, when the innnovation is generated without the possession of

  • A the required cospecialized assets, such as distribution or manufacturing capabilities
  • B presence of tight appropriability regimes, when the innovator does possess an ironclad patent or copyright protection and
  • C a product readiness that ensures a moderate design float from innovation to market readiness.

Teece also claims that process patents are usually weaker in their protection power as small changes to the upstream process (and thus e. g. to a molecule) usually bypass existing protections while a similar product with unnoticeable differences may be derived (e. g. generika).

Reviewing The Oater’s innovation, appropriability regime, and market power

The Oater patented its batch-container. The container holds integrated production and cleaning capabilities, including a mixing rod, cleaning nozzles and container inlets that may be rotated, opening during filling and closing during fermentation.
So let’s assess The Oater’s market position in Teece’s three dimensions.

  • A The Oater does not hold the cospecialized assets to make use of its product innovation. The manufacturing capabilities are held by suppliers. The machine is then sold on the market, possibly giving access to the innovation to anyone who buys a machine.
  • B The Oater holds a patent with a rather weak appropriability regime, as other production capabilities or product variants (both in terms of system design and process management) are not only conceivable, but are already being used by the industry. Nevertheless, The Oater’s patent applies to the production in a small space with only one batch (fed-batch process), which could hinder on-the-shelf competition.
  • C Lastly, the market readiness of The Oater Barista oat drink machine is certainly given, as The Oater has been selling the product since spring 2024. This is good news for The Oater.

We conlcude that only one of the three prerequisites for an innovator to benefit from its innovation are present.

Moreover, it is evident that The Oater’s financial limits significantly reduce the speed at which an innovation yields a market/revenue success. Teece notes that this “head start” phase is a one-time event for the innovator. Once it has passed, the market advantages shift to asset holders and imitators. Due to predominantly weak approvability regimes, imitators tend to replicate innovation easily and may exploit the set up on a stronger chain of upstream and downstream products and suppliers and consequently tend to offer comparable products at a better price point after the head start phase.

The Oater has been selling the product under patent protection since the beginning of 2023. The patent protection is retroactive but was not issued until August 2025. Hence, the head start phase has already begun, and is most likely endangered through the patent publication by giving imitators potential access to the technology that they otherwise would not have been aware about or would have had to get access to by buying/renting the product. The latter may be hindered by strong protection claims in leasing contracts.

Summing up, only one of the three prerequisites for innovation benefit are present, the head-start phase was not influenced by the patent process and, lastly, imitators might even benefit from the patent publication. That is a bitter pill to swallow. On the other hand the patent recognized The Oater’s right to use its technology even if imitators would copy it and would apply for a patent themselves. From Teece’s point of view, patenting would not have had any influence on whether The Oater could have converted its innovation into an economic advantage or not. Let’s now shift gears and focus on the patent from an investor’s point of view.

A different viewpoint: IP as a signaling device for investors

For institutional investors and VCs, patents matter not primarily for enforcement (which rarely occurs at the startup stage) but because of their signaling effect. Patents proof the degree of innovation that is most likely claimed in any pitch deck. They also serve as a third-party validation, where knowledgeable examiners approve the work outside of the two party startup - investor interaction. A patent therefore is a viable asset of a company and worth money.

In essence, IP is third-party proof-of-work. In ecosystems where due diligence is fast and asymmetric, patents lend credibility through an unbiased examiner. A patent-backed company is more likely to protect its technological edge and offer differentiated customer value.

The time to file was yesterday. Yesterday four years ago.

The Oater’s path—from initial submission through DPMA and EPO review cycles, to final approval—demonstrates the slow grind of patent offices. Founders who postpone IP until after traction miscalculate lead times. To have an impact on evaluation during Series A fundraising or exit negotiations, filing must begin 24–30 months in advance. Add another 6–12 months for invention maturity and drafting, and the full cycle reaches 3–4 years. As this process is mostly dependent on the lead time of authorities, there is no real way to accelerate the process for a company. This clashes with most startups’ 12-month planning horizons.

IP is expensive, slow, and mostly optional

Most patents are never enforced, often denied or narrowed and, even when granted, they do not generate revenue! Yet, process cost is unavoidable. Plan with a budget of around 50,000 EUR per full cycle, excluding recurring costs for upholding the patent in various states. Costs may include drafting, legal opinions, translations (three languages are compulsory for patents filed at the EPO), research fees as well as the continuous support of a law firm that helps to navigate the delicate process of patent application.

So what should startups do? With my limited knowledge from filing two patents at DPMA and the EPO for The Oater, I suggest to:

  • Think strategically – file only when core IP is your single source of revenue.
  • Start early – otherwise IP might not considered in the company’s evaluation in a fundraising round.
  • Budget realistically – account at least around 50,000 EUR for a full cycle with recurring costs after patent approval depending on the number of countries in which the innovator wishes to maintain its patent protection.
  • Know your audience – patents aren’t for customers, and they aren’t for you either. They’re for partners, acquirers, and VCs.

The Oater is proud of its patent! But prouder still that The Oater treated IP as part of its long-term value architecture, putting in the effort three years ago and now finally brining it to fruition.

Looking ahead

Want to read the patent? Look it up here:

But we are not done yet. For the next nine months to come, until April 24th, 2026 at DPMA and May 27th, 2026 at EPO an opposition may be filed against the patent. The patents will then remain valid for the next 18-something years to come. Stay excited!

References

David J. Teece, Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy, Research Policy, 1986. A foundational paper explaining why control over complementary assets and timing determines whether innovators capture value from innovation.