IP for femtech startups: why securing rights early matters

The term ‘femtech’ is generally understood to refer to solutions that address women’s health needs, whether through apps, devices, diagnostics, or pharmaceuticals. These needs may be specific to women, or may relate to conditions that affect women disproportionately or in different ways to men.

In 2024, the UK femtech market’s revenue was almost $1.5 billion, whilst the market in the US approached $13.5 billion. Both markets almost tripled in size in only five years, and rapid growth is expected to continue; from now to 2030, compound annual growth of around 16% is forecast, with revenues projected to reach $3.8 billion in the UK and $32.3 billion in the US by 2030.

Investment in femtech is enabling companies to develop new products, diagnostic methods and treatments that are tailored to women’s symptoms and their bodies.

During their early days, startups have multiple tasks to juggle. As they focus on developing a product that is safe, effective, reliable and user friendly, whilst seeking and attracting investors and engaging with customers, it’s all too common for intellectual property (IP) rights to fall down the priority list.

However, for many femtech startups, and for the larger companies that invest in them, giving close attention to IP early on can deliver significant rewards down the line. This article explores why it is important for founders of startups, and particularly those in the femtech space, to secure their IP rights early.

Some of the most noteworthy advances and successes in femtech have originated from modest beginnings. In 2024, Flo Health became the first femtech company to reach unicorn status (as a privately held startup valued at more than $1 billion) thanks to its women’s health, menstrual and ovulation tracking app.

UK FemTech companies have raised £477.6 million in equity to date, with almost 90% of that funding raised since 2020. Flo Health accounts for 43% of that funding. However, there are many other successful startups in the space. Peppy, an employer-provided benefits platform specialising in women’s health support that improves wellbeing and performance at work, has raised £46.4 million. SheMed is another success story, having raised £37.5 million to fund the provision of its female-focused weight loss programme.

Despite the significant growth of femtech, startups in the femtech space have received less than 2% of total global VC funding. Barriers such as gender disparity in the leadership of tech companies, reduced and limited funding for female founders, the historic underfunding of research into women’s health, and algorithmic biases conspire against femtech startups. It is therefore essential that they do everything they can to improve their chances of securing that elusive funding and ultimately succeeding.

A recent report from the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) found that, on average, startups that have applied for both patents and trade marks during their initial seed or early growth stage are up to 10.2 times more likely to successfully secure subsequent funding than those with no IP rights.

A similar picture emerges when it comes to successful exits, with startups that have filed for both patents and trade marks having a more than three times higher likelihood of an initial public offering (IPO) or acquisition.

The report also presents data comparing IP usage at different funding stages for startups in the biotechnology, healthcare, and AI sectors. This data indicates that having IP rights (and particularly patents) in the healthcare and AI sectors gives companies a significant advantage over competitors when securing funding, the proportion of companies with patent rights having increased by a factor of 3.5 between seed and late stage in the healthcare sector, and by a factor of 4.7 in the AI sector. Since the femtech space spans multiple sectors including both healthcare and AI, patent-holding startups in this space can have a real advantage over their competitors in securing funding.

Startups typically have few tangible assets at the initial stage. Instead, their intellectual capital represents the vast majority of the value of their business. As discussed above, formal IP rights, such as patent and trade mark applications, can be key to securing funding and collaborations. They also provide substantial legal safeguards which offer many benefits to a startup’s business strategy.

In particular, the monopoly conferred by patents can reduce competitive pressures, improving the profitability of the startup and securing higher returns for investors. Having one’s own patents can also be a defensive deterrent against patent lawsuits being filed by competitors, whilst licensing patents can provide an income stream. Patent rights can also help enable startups to enter joint research ventures with larger firms, enabling them to accelerate their own research and development.

Out of all of the IP activities that a startup can undertake, obtaining a patent is one which can require significant investment in resources, in terms of both cost and time, and there can be many thousands of pounds of expense in the first few years of a patent application’s life.

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With limited resources available, and a very strict requirement for an invention not to have been made available to the public prior to the filing of a patent application, it is crucial for startups to consider the overall strategy behind their patent filings.

If innovations are not identified at an early enough stage, or are disclosed to third parties, opportunities to file a patent application can be lost. On the other hand, as the company’s business strategy develops or the scope of a patent application is restricted during prosecution before a patent office, patent portfolios may become less well aligned with the commercial needs of the company.

In order to build an effective and valuable IP portfolio, startups should focus their initial attention on innovation capture. Innovation capture is a systematic approach which maximises the chance of patentable inventions and other IP being identified and protected at an early stage, whilst allowing resources to be deployed in the most efficient and effective manner. It involves working through the technical information arising from a project to identify potentially patentable subject matter. Innovation capture is best achieved by a collaborative approach in which patent attorneys and development teams work together, uniting technical and legal expertise early in the process. The output of the exercise can be commercially evaluated and subsequently converted into one or more registered IP rights if appropriate. Those IP rights might include patent applications, but also design filings, trade marks and copyright protection. Alternatively, the decision may be taken to keep an innovation entirely confidential and treat it as a trade secret.

This collaborative innovation capture approach brings commercial benefits both during any later patent application process, and from a wider perspective. Because the patent attorney understands the commercial context of the innovation, they can implement a prosecution strategy which is aligned with the product and commercial objectives for the application, achieving best protection in a cost-effective way. Even if innovations are not taken forward to the grant of a patent, the output of the innovation capture process should still be recorded, thus giving companies a full picture of their IP so that it can be regularly audited and appraised. This, in turn, allows companies to maximise the value from their IP budget, to ensure their IP strategy matches their commercial objectives, and to readily identify their IP assets for valuation and funding purposes.

The upfront investment in early engagement of patent attorneys who can draft high quality patent specifications that are capable of enduring patent examination in multiple jurisdictions, and which provide commercially valuable patent rights, will pay dividends in the longer term. Cutting corners at an early stage will often result in problems during the patent prosecution process which may be unresolvable, or result in patents with no useful commercial scope. To avoid this, it is worth introducing a patent attorney to the research and development team at an early stage. It is also important that appropriate internal resource is devoted to managing the innovation capture process and the management of any resultant IP applications.

The IP right procurement process can be a critical, but expensive, exercise for startups. By implementing an innovation capture process, and taking legal advice early on in the invention identification process, startups can maximise the return on investment from their patent portfolio, and significantly improve their likelihood of investment and positive commercial outcomes. This is particularly important in a space like femtech where competition for funding is so high.