Invent It, Sell It, Bank It!: Make Your Million-Dollar Idea Into a Reality (20 page)

Under this new system, however, the burden is on
you
to file for a patent as soon as possible, or risk getting scooped. By avoiding the cost of filing for a patent for your new invention, you could potentially lose all the money you think you’re saving—and more, in the future, if someone steals your idea and simply files a patent for it ahead of you. That person could even come after you for patent infringement, and you could lose all rights to your invention.

We live in a world that thrives on knockoffs. It’s incredible how many individuals and companies make their fortunes copying other people’s ideas and products. They’re out there, looking for easy marks, certain that you won’t have the money, the backing, or the backbone to fight them if they steal from you. Sometimes, if your product has great promise, a company that wants to sell it will take up the lawsuit for you, but that’s a long shot. So with or without a patent, you are in for the fight of your life. But without a patent, you’re reduced to fighting with bare fists; a patent arms you with weapons and a shield.

If you have a patent and someone infringes upon it, you have options. Your attorney can send your competitor a cease-and-desist letter, giving the person the chance to willingly take his product off the market. (If that doesn’t work, you can alert your competitor’s retailers to the fact that they are buying from a seller who is willfully infringing on a patent.) Retailers really don’t like to deal with products that are involved in patent litigation. However, this can go both ways, so get advice from an attorney
first. Without a patent, there wouldn’t be much you could do about someone’s stealing your idea and selling your product. A patent puts the law on your side and gives you the leverage that you otherwise do not have.

TWO IMPORTANT THINGS TO REMEMBER:

1. The biggest mistake you can make is failing to learn from your mistakes, because that means you’ll commit those mistakes again.

2. The harder the battle, the stronger and smarter you’ll be at the end, no matter the outcome.

2. Conduct Due Diligence

It would be a tragedy to put your heart and soul, not to mention perhaps your life savings, into an idea only to find out once you try to start selling it that there is already something else exactly like that on the market. Now, if you’re like every other inventor I’ve ever met, you probably think this is highly unlikely. You believe without a doubt in the uniqueness of your product. And you may be right. Or you may be like those seven women I met when I was consulting for Oprah’s Next Big Thing event in Los Angeles, all unknowingly pitching the same diaper bag.

You’re already traveling a rough road; the fewer surprises you have to face, the better. You have probably already done some research yourself. The minute that idea popped into your head, you probably sat down at your computer to see if you could find anything out there that resembled it. I hope you left no online
stone unturned, trawling all the Internet vendors, search engines, and social networks, like Pinterest, Bing, Google, Facebook, Tumblr, Twitter, Flickr, and Instagram. You also should have looked at every retailer’s website that could conceivably carry your product, from the online shopping networks like QVC and HSN, to the large merchandisers’ websites like Amazon, Walmart, Target, and Bed Bath & Beyond; from the big general department stores like Nordstrom, Macy’s, JCPenney, and Bloomingdale’s, to the specialty retailers that cater exclusively to your market. This might mean Home Depot if you’ve invented a tool, or Academy if you’ve invented a new type of fishing rod, but it could also be the independent, high-end maternity and baby store in your area if you’ve invented, say, a diaper bag.

And of course while you’ve been out walking around, you’ve probably been keeping your eyes peeled. The thing is, just because you’re not finding a product like yours on the Web or on retail shelves, that doesn’t mean a competitor doesn’t exist, or even that no one will challenge you when you try to sell your product. If you start selling an item, and someone has a patent on it, you may be guilty of patent infringement. Your competitor would be within his rights to try to shut you down with a cease-and-desist order, or force you to pay a royalty should you continue to sell.

It’s smart to be well aware of the market so that you don’t set yourself up for problems. One good resource could be the patent application process, in which the first step is to mine the USPTO database for any information that could preclude you from getting a patent. If you have no funds and no way to budget for an attorney, you can do this search yourself. But if you can, it is better to hire an expert. Patents are notoriously difficult to read and understand—the legalese can be almost unintelligible.

Patent attorneys, also known as intellectual property attorneys, go to school for many years to learn how to read and write
them. These lawyers will simply know more than you possibly could about all the rules and subtleties within patent law. Their search will necessarily be more exhaustive than one that you could conduct on your own. Like you, they will search the USPTO website, and may search other online search engines. Unlike you, they will have a thorough understanding of the patent classification system and actually know what they are doing. They have years of experience that a beginner entrepreneur just won’t have. While you may not think something is similar or could prohibit you from getting a patent, they might know otherwise.

If you visit the USPTO website, you’ll find that, at first, the process doesn’t seem so daunting. The site even provides you with a seven-step guide to help you conduct your search. But although brainstorming keywords and investigating the class and subclasses in which your product could be categorized may not sound hard, if you’re doing it correctly and thoroughly, it will probably be a painfully slow process. And how will you know that you have thought of
every
keyword that could possibly relate to your product? What if it could be categorized under a certain subclass that you didn’t think to check? Your attorney can make sure that no details slip through the cracks, details that could come back to haunt you later.

The attorney will do two different types of searches: (1) A patentability search to check to see if there are already other patents (or “prior art”) in existence that could prevent you from getting your patent; and (2) an infringement search, which checks to make sure that by selling your product you are not inadvertently infringing on someone else’s patent. Though this step is not routinely done, I think it’s a smart thing to do and I recommend it. This comprehensive search alone can be worth the price of your attorney.

Based on the results of these searches, your lawyer will be able to tell you the likelihood that you will get your patent. If your attorney believes that you have a good shot, you can decide whether it’s worthwhile to continue. And if your attorney is doubtful you’ll get your patent, you can stop trying to get one. Either way, now you have done due diligence and possess important information about the competitive landscape, which will allow you to make an educated decision about the best way to proceed.

3. Investors Love Patents

A patent makes your product more appealing to investors because it reassures them of your ability to corner the market, which gives them a better chance of profiting from their investment. It also gives them something to sell if, for any reason, their investment in you doesn’t pan out. Even if they love your idea, they don’t really need you—they need your patent. You will have a much easier time getting funding and finding partners if you can claim that you hold a patent on your invention.

THE COST FOR FILING FOR A PATENT

Filing for a patent may cost you less than you think. Your initial layout for an intellectual property lawyer could be anywhere from $2,500 to $15,000, depending on the type of patent you are pursuing, the seniority of your attorney, what firm you use, and what city you live in. For example, if you are filing for a patent for a simple product, it might be less expensive than if you were filing for something in biotech, which is much more involved and costly.

There are steps you can take to minimize the cost of filing:

•
A relatively inexpensive junior attorney will still know a lot more than you do and would be well worth the investment.

• There are ways you can minimize your fees, too. A basic filing fee for a utility patent currently costs $1,600, but if you qualify as a small entity, which means you employ fewer than 500 employees, that cost is reduced by half. And as a result of the America Invents Act, as of spring 2013, you can also apply as a micro-entity if you qualify, in which case your fee would drop by 75 percent to $400.
Filing for a provisional patent could cost an inventor as little as $65. Filing for a patent does not have to be an exorbitant investment, especially if you can figure out a way to mitigate the cost of a patent attorney.

• You can file your patent yourself online. It’s called filing “pro se,” and it costs about a thousand dollars. It’s not easy—a patent is rarely granted after the initial filing and almost always requires some back-and-forth between the applicant and the patent examiners who believe they have found reason to reject a claim—but it can be done.

The USPTO online State Resources page offers lists of registered patent attorneys, resource centers, law clinics, inventor organizations, and pro bono services available in each state. Go to
uspto.gov/inventors/state-resources
.

While I strongly believe that it is a worthwhile investment to spend the money
on someone who can help you put your best foot forward, who knows the ins and outs of patent law and can increase the likelihood that you will get your patent, the last option sometimes works. I knew an inventor with a clever idea who filed for her patent for herself, and she got it. We wound up working together and her product sold well. For certain products, especially simple ones, it may be worth a shot if the alternative is not to file at all.

FIVE STEPS TO OBTAINING A PATENT

1. Hire a Patent Attorney

As I said, I advise inventors to file for their own patents only as a last option. If you wouldn’t feel qualified to go into court and fight your own case, you shouldn’t try to file your own patent, if you can help it. A patent application has to be written with extreme caution—every word matters. Attorneys understand the system, they know the pitfalls, and they are worth the investment. In addition, filing your own patent actually lowers your chance of getting the patent, because you just don’t know what you don’t know.
Some researchers estimate that the number of inventors who fail to obtain patents after filing pro se may be as high as 75 percent.

Not every lawyer is qualified to handle patent law, which is exceedingly complex and nuanced. Before hiring your intellectual property attorney, ask around, do your research, get recommendations. There are two things you want to find out at this stage:

1. Does this attorney specialize in an area relevant to your product? All registered patent practitioners have a technical degree, such as chemical, mechanical, or electrical; you want an attorney who knows your field as well, if not better, than you do.

2.
Is the attorney a patent prosecutor or a litigator? Unlike the prosecutors you’ve seen on television, patent prosecutors don’t actually try anyone in court. Rather, they are the attorneys who write the patents and submit them to the USPTO in Washington, D.C. A patent litigator, on the other hand, fights patent infringement cases.

Before hiring a patent attorney, make appointments with your candidates and meet with them in their offices. This is extremely important, and not just because you’re about to spend some money. As in every profession, there are good attorneys, great attorneys, and attorneys you need to avoid like the plague. It’s always going to be a mixed bag. You’ve got to meet your potential candidates in person and question them about your product. Do they seem to understand your field and the technology behind your idea? Do they seem confident that they would know how to prosecute a patent for a product like yours? The person you hire to file your patent will be taking your future into his or her hands. It’s crucial that you like and trust your attorney and that you feel confident he or she will successfully get you a patent.

It is possible that you could go through all the trouble and expense of filing a patent, and still be denied. Only an experienced, dogged patent attorney will, it is hoped, be able to help you get around that roadblock. You also want to hire someone who will be honest with you about the likelihood of your getting your patent, so that you don’t waste your money. But if all goes well and you bring more products to market in the future, this could be the beginning of a long relationship. You want to feel good about this partnership.