Speaking directly to inventors and people with ideas, patent attorney Richard Goldstein explains how different types of protection are available for different types of ideas.
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Before your idea or invention can be eligible for a patent, it must meet two important criteria. Find out if a patent is appropriate for you. Play Video >>

You already know that to patent something, it needs to be different. But how different does it have to be to qualify for a patent? Play Video >>

When it comes to whether something should be patented or trademarked, the question is: are you building a brand, or protecting a concept. If you are protecting a product concept or design, patent law is the clear choice. Assuming a patent is available for the subject matter of your concept, it is the way to prevent others from pursuing the same product concept.

A trademark, however, is useful and often crucial when you are building a brand for your product or service. After taking the appropriate steps to protect the product concept itself, and as you prepare to launch the product into the world, it is important to understand and consider the role trademark law and branding will play in launching your product and helping your business grow safely.

Trademark law is designed to prevent consumer confusion between branded products. For example, when you walk into a grocery store to buy a soft drink, and you see a familiar red and white can, with a familiar writing style that says "Coca-Cola®", and has a wavy line underneath the name -- you know what to expect from that product. In fact, you can trust that it is from the same company as the last time you purchased a soft drink in a can like that. So in essence, trademark law protects your expectation that when you see that soda can, you are able to trust that you are getting the product that you think you are getting, and not another company's soft drink.

Trademark law will actually protect all of the distinctive elements found on the Coca Cola® can, including not only the name, but also the color scheme, the writing style for the name, and even that wavy line symbol. Consider that even if the can didn't actually say "Coca-Cola®", but contained some or all of those other elements, you might be confused into thinking it was "The Real Thing®".

When this type of confusion exists between a branded product and a competitor, there is a trademark problem. If it gets to court, the way the court will determine if there is trademark infringement is to apply the "likelihood of confusion" test. That is, would a consumer likely be confused as to the source of the product based upon the circumstances?

In sum: a trademark, also known as a "mark", or a "brand", is the thing that you use to distinguish your product in the marketplace, so that people who have used or heard of your product will end up buying your product, and not instead buy a competitor's product - mistakingly believing it is your product.

In general, the more distinctive the mark, the more protectable it is.

On one end of the scale, generic names such as "soda" or "cheese" are not distinctive enough to be protectable. They are not protectable because these are the common names people use when asking for such products, and so it would not be fair to allow one company to stop other companies from using these common words when describing their own products.

On the other end of the scale, 'arbitrary' or 'coined' names, such as "Apple" for computers or "Nike" for sportswear, are among the most protectable, because there is no need for competitive sneaker companies to use the made-up word "Nike" when talking about their own products. Similarly, because the word apple is arbitrary in the computer field, there is no need for competitive computer companies to in any way use the word 'apple' when promoting their own product. And how about "Amazon"? What does this region in South America have to do with selling books? Absolutely nothing! Therefore, choosing Amazon® as a brand name created a wide territory that prevented other online booksellers from coming anywhere close to their brand name, and helped Amazon.com to create an online selling empire.

Choosing the RIght Branding For Your Product

When you are picking a brand or mark for your product, two things are very important: avoiding confusion, and being distinctive.

First, to avoid trouble with others, you want to avoid branding your product in any way that would create a likelihood of confusion with existing product brands. You need to find out what are the closest trademarks, and determine whether your intended mark would create a likelihood of confusion. Of course the best time to do this is before you invest substantially in developing your brand. At that early point, it is easiest to change course and pick a new name without losing substantial resources that would otherwise be invested into a problematic brand name. Clearly, being forced to change the name of your company or product after it is experiencing success would be an absolute nightmare!

And of course, if your intent is to make your product appear or sound like a famous product so that it will remind your customers of the famous product, you are asking for trouble! It is kind of like speeding past a police station. Chances are you are going to have a problem.

Second, you want to make sure that you pick a name that is inherently distinctive, so that it stands out to consumers as something that naturally seems like an exclusive brand name. You want a brand which has enough uniqueness, so that you could easily show that consumers would be confused, if a competitor were to later come out with a similarly branded product.

As an example of how to pick a strong brand, let's imagine we are launching a package delivery service, and want to pick a distinctive mark. We might naturally start by thinking about what characteristics people are looking for in a delivery service. That might lead us to a name like "Fast Delivery Service". Hey, it sounds like a name that would be attractive to consumers wanting the delivery to be fast, doesn't it? But from a trademark standpoint, it would be a poor choice, because 'fast' simply describes a common sought after aspect of a delivery service. You could even say - 'fast' doesn't sound like a brand name, just a characteristic. For example "Red" licorice, is not protectable, because "Red" simply describes a characteristic of the product. Accordingly, laudatory terms, such as "Premium", "Best", "Reliable", are typically considered descriptive. Generally, descriptive words are not protectable. Under certain circumstances, however, you can protect descriptive phrases, but this is relatively rare, as it involves proving that the public already thinks of it as your brand (example, "Holiday Inn"). But this is a difficult path and not recommended - unless you have are already heavily invested in a descriptive company name, and you want to do what you can now to protect it.

Moving up the ladder of distinctiveness, a better choice might be "Cheetah Delivery Service", because 'cheetah' doesn't actually describe a characteristic of delivery services, but by referring to the fastest animal, it is suggestive of speed. Suggestive marks can form strong trademarks.

As it turns out, however, a quick search reveals that there are several companies in the delivery industry already using "Cheetah". When several companies are already using a name, it is not distinctive. In such cases, there is little likelihood of confusion - because none of these companies can prove that consumers view the name as being associated with any one particular company. This highlights the importance of "policing" your mark. That is, once you have established your brand, it is important to watch for any potential infringers. When you spot one, you must take immediate action to stop them. If you are not paying attention, and then wake up one day and notice that five other companies are using the same name and have been doing so for some time, it is probably too late to do anything about it, because your mark will have lost distinctiveness.

An even better choice would be to pick an 'arbitrary' word, a word that has nothing to do with package delivery. For example, "Rock Star Package Delivery" would probably create a strong trademark. If we established this as our brand, there would be no legitimate reason for a competitor to use anything similar to "Rock Star". Clearly if they try, it would be easy for us to establish that they are trying to confuse consumers and take advantage of the good will we have built up among our customers.

An even stronger choice would be to invent a word. A so-called 'coined' or 'fanciful' mark has the greatest distinctiveness. Continuing with our hypothetical example, I came up with "Airnillo Package Delivery". From a trademark standpoint this mark is extremely distinct, because "Airnillo" is a made-up word. I admit, it might not be the best name, but to be honest: I had a hard time coming up with a word that doesn't exist! I tried numerous combinations of syllables, and came up several words that I thought I had invented. But when I did an Internet search, I found that they were already existing words! The point is, when you create your own a word, you are laying the groundwork for the strongest trademark protection. Then, creating strong branding is a matter of making investments in promotion of the brand.

Sometimes, a strong brand starts naturally and immediately when you find a clever combination of words, and you and others say "hey, that's a great name". Such a brand might be inherently strong from the beginning. More often, however, strong brands are created over time - through promoting your product. Ebay®, Google®, Amazon®, Gucci®, and the like - have strong brands because of the effort they spent launching and promoting a product or service that people want, and thereby building recognition for their brand names among relevant consumers.

In sum, it is best to focus on branding that is not confusing with existing brands, and is distinctive enough to be worthy of your advertising, marketing, and promotion budget.

At this point, you should have a general understanding of what trademarks are about, and what potentially makes a good brand name. It should also be clear that before launching any branded product, you should seek the advice of an attorney well versed in patent and trademark law. I have seen too many people skip this important step, and pay for it dearly later. In particular, it is important to have the right research conducted to find out about similar marks to your intended trademark. It is equally, if not more important to get the advice of someone who can interpret this research and advise you regarding your particular circumstances - about how to avoid conflicts with existing marks, how to pick a strong mark, and how to effectively establish trademark protection.

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What is the relevance to patents and inventions?  One of the most common things I am asked is whether a person is safe to pitch their idea to a company if they get them to sign an NDA.  If you are wondering that as well, let's take a look at how things might play out if you did tell a company your idea, and then later saw your product on the market.  Not a fun thing to imagine, but when it comes to ideas and inventions, following this scenario is probably the best way to understand what NDAs are good for and what they are not good for.

First, it is important to note that a Non-Disclosure Agreement is a contract.  And contract law is an entirely separate field from patent law.  In fact, how contracts are interpreted is a matter of state law, and thus will vary state to state.  So while I am fully qualified to discuss matters of patent law (which is federal, and thus the same throughout the United States), depending on where you are located, I might not know the details of how a contract would be interpreted by your state courts.  And as always, my purpose in writing articles is not to give legal advice, but to inform.  When you need legal advice, seek the competent advice of legal counsel who is fully apprised of the facts and circumstances in your situation.

Fortunately, the principles we are going to discuss here are not about the details, or about specific advice. What will be discussed are the general principles and strategies that will help you understand when NDAs are useful, when they are not, and when relying on an NDA could be downright harmful.

First, let’s consider the possible outcomes if you used an NDA versus patenting your concept. Let's imagine you have a new concept/idea/invention today, and a couple of years from now you see that someone else has put it on the market.  I know - you don't want to think about that.  But let's use it as an example to understand the difference between using an NDA and patenting what you have.

First Scenario: You go to XYZ company and have them sign an NDA.  In the NDA they agree to keep everything you show them about your concept confidential.  They agree that they will not use this information for their own benefit, but solely to evaluate the possibility of working with you.

Then, imagine that two years later one of these two things happen:

1. You find out that XYZ has put out the same product idea you discussed with them.  Now assuming that you can prove what you showed them after the NDA was signed, and assuming the NDA was written so that it is clear they violated their agreement, you can sue them - probably in state court - for "breach of contract".  That is, you would have the opportunity to prove that they broke the contract by not keeping your idea confidential.  Assuming you are able to prove this, the court would probably wrestle with the question of what damages are owed to you.  What you would get, would just be whatever damages you can prove resulted from them breaking the contract.

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2. You find out that ABC company (who you never told your idea to), has put out the same idea that you had.  Unless you can somehow prove that someone at XYZ violated your contract by leaking your idea to ABC, you won't have any grounds to go after ABC.  And imagine how difficult it would be to prove that the ABC product was the result of some wrongdoing at XYZ.  In reality, however, we live in a very connected world, where people have contacts in a lot of diverse places.  Colleagues, family members, former co-workers, etc might be at one of the two companies.  Especially in the same industry, it is very possible that people in different companies know each other.  Proving that ABC pursued the product idea AS A RESULT OF someone at XYZ violating their confidentiality agreement, however, can be next to impossible.  If this is the way it plays out for you, you are likely out of luck!  There is a concept in contract law know as "privity".  Because of privity, under most circumstances you can only sue people who were a party to the contract.  Except in some very specific circumstances, you cannot sue third parties.

Second scenario: You file a patent application that covers your product idea/invention.  You go to XYZ company and show them your concept.  Some time later, the USPTO (United States Patent Office) approves your patent application, and you are issued a United States Patent that covers your idea.

Then, imagine that two years later, one of these two things happen:

1. You find out that XYZ has put out the same product you discussed with them.  Your patent attorney agrees that the product they are producing is covered by your patent.  You can bring an action in federal court for patent infringement, to stop them from producing the infringing product and to seek damages.  Federal courts are well versed in deciding how to account for the money you are owed for cases of infringement.  The measure of damages can include what a royalty should have been if you had licensed the product to the company, lost profits, etc.  In addition, in this situation you might be able to prove that the infringement was willful, and the court might award you triple damages.  The bottom line is, patent law provides a very clear path for you to recover your losses.

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2. You find out that ABC company (who you never told your idea to), has put out the same idea that you had.  You cannot prove how they found out about your idea, but it doesn't matter!   If it is clear that your product is covered by your U.S. patent, you can sue them in federal court for patent infringement, to stop them from producing the infringing product and you can seek damages.  The bottom line is, patent law will provide a clear remedy, where as simply relying on an NDA would not.

Lesson learned: an NDA can be useful when the same person (or company) that signed the NDA goes ahead with the idea.  When you have a patent, however, and someone replicates whatever is covered by your patent, your prior relationship with that person (or company) matters very little.  When you have a patent, even people who innocently and coincidentally come out with the same product could be held liable for patent infringement.

So when are NDAs Bad?

They are bad when you attempt to use an NDA as your sole protection, especially when disclosing your idea to people you don't fully know and trust!  If patent protection is available, having even just filed for a patent prior to disclosing the idea to a company will put you in a much better position.  Filing the application will establish your priority and can prevent them from attempting to patent it themselves.  

The question typically is - whether what you have is patentable.  If what you have is valuable, and losing it would be devastating or even detrimental to you or your company, it is worth having an evaluation performed to find out if it is patentable.  Over the years, I have helped many people get patent protection. Many clients I was able to achieve patent protection for, had previously thought an NDA was their only option.

So when are NDAs useful, helpful, or good?

Here are a few instances where having an NDA is beneficial:

1. They help honest people to keep things quiet.  Imagine that in the absence of an NDA, even an honest but somewhat careless person might tell a friend about the cool idea you told them about.  When an NDA has been signed, however, they are more likely to remember that this is supposed to be confidential information, and therefore remember not to blab out it.  So even between people that trust each other, a simple NDA is a reminder that keeping this information confidential is serious business.

2. They are a great back up for other forms of IP protection.  Sometimes there may be doubt about whether your former joint venture partner is infringing your patent.  When an NDA was signed, it can provide additional grounds for showing that their later activities stemmed from early confidential discussions you had with them, and therefore can provide you with additional remedies.

3. They can be helpful in establishing trade secrets.  Trade secret protection is used under certain circumstances to protect a company's valuable secrets.  When information is stolen, it is important to establish the steps that the company took to keep the information confidential.  So having employees sign NDAs obligating them to keep corporate information confidential can be extremely important, if for example, a competitors product can be linked to a leak (whether intentional or inadvertent) from one of your employees.

4. They are helpful when the concept/idea is not patentable, and not easily protected with other forms of IP protection.   For example, certain business concepts, marketing or advertising ideas, and the like might not qualify for patent protection.  In those cases, signing an NDA might be the best you can do. It will provide a basis for a working relationship, that will help keep the parties honest.  Be careful, however, not to jump to the conclusion that the NDA is your only option.  Having your idea evaluated, to determine the best available strategies for protection is essential - if what you have is valuable to you.

Final word regarding NDAs and patent attorneys:  I am sometimes asked to sign an NDA.  My response is that if you have one already prepared for me to sign, I'll sign it.  The truth is, both federal and state laws require patent attorneys to keep clients and potential clients' information confidential.  So when a patent attorney signs such an agreement it only duplicates an obligation that the law has already imposed upon us.  Some patent attorneys are insulted by being asked to sign an NDA.  My opinion - if it makes you more comfortable so that we can move the action forward, I have no problem with it.

The Two Most Common Mistakes that Can Make You Lose Your Rights to an Idea or Invention.

The patent process can be quite costly.  The fees from the Patent Office are only the beginning, and quality representation from an experienced patent attorney will run into the thousands.  So wouldn't it be great if there was a way to save thousands on patenting?  Well of course it would be.  The important question is: how might your attempts to save money in the short term actually end up costing you heavily further down the road?

Let's face it - when it comes to a costly or time consuming project, any short cuts that save time or money are highly desirable.  We all like short cuts, and this is not a bad thing.  Some of the best inventions arose out of this desire to make something simpler, easier, cheaper, or more convenient.

Even though this is true, when it comes to securing legal rights to an invention, there are no short cuts worth taking.  That is of course, if what you have is worth protecting.  If  something is not worth patenting, trying to protect it (even by taking a short cut) makes no sense.

I've heard many crazy ideas from inventors over the past 15 years, about how to circumvent, or avoid the patent process.  Every one of these people are sure they have found a loophole.  It is a lot like the people who believe that there is some secret loophole that they can use to avoid paying income taxes.  I often wonder about these people -- haven't they heard the saying about "death and taxes"?

In any case, this article will focus on the two most common short cuts people try to take in order to circumvent the patent process.  While these short cuts clearly cost people millions in wasted money and lost ideas, thousands of people still believe they work and try them every year!

MYTH/MISTAKE #1

The "Poor Man's Patent"

I don't know the origin of the urban legend of the so-called "poor man's patent,"  but it is a myth that is about as durable as the cockroach.  No matter how many times it is dispelled, or how many authoritative attempts are made to stamp it out, it lives on.  People want to believe it, and so this myth continues to cost thousands of inventors the rights to their inventions.  I often ask myself, why do people continue to believe it to be true? Perhaps it is their hope that it could actually be that easy (and cheap) to protect an idea.

So, like many have before me, I will explain the myth. And please, DON'T TRY THIS AT HOME:

Here it is: you describe your idea, put it in an envelope, and send it to yourself by certified mail.  The thought is, the postmark will serve as proof of the date that the idea was invented.  Right? Wrong.

The truth is, a postmarked letter an inventor mailed to himself/herself, has never been accepted as proof of inventorship.  People often ask me, why not?  Some people say it’s no good because the envelope could be steamed open and resealed, making it unreliable as proof of invention.

I think the answer is much simpler - the government has gone to the trouble of setting up a Patent System, which includes the United States Patent Office, a network of patent attorneys, and the court system.  By doing so, they have effectively declared, that this system is THE way to protect an idea.  When a person tries to protect an invention by mailing it to themselves, they are effectively trying to get around the system.  Why would the courts ever encourage people to try to get around the system?

But, whatever the reasoning is, a sealed envelope will not protect you.  If you rely on it, and delay starting the patent process because of a false sense of security - depending on the circumstances - you can lose the rights to protect your invention entirely.

MYTH/MISTAKE #2

Misused Provisional Patent Applications

Before you jump out of your seat, I am not going to say that all provisional patent applications are bad!  In fact, I often prepare and file provisional patent applications for my clients.  The problem is, since the provisional patent application procedure was created by an act of Congress in 1996, people have misunderstood and misused the process (literally throwing away their rights) because of a few common misconceptions.

The original idea behind provisional applications was to give inventors an option to preserve their priority, before filing a full utility application.  When a provisional application is filed with the United States Patent Office (USPTO), it gives the inventor priority rights to the invention for a period of one year.  The USPTO will not review the provisional application.  But if the inventor files a utility patent application within a year, they will maintain priority from the original filing date of the provisional.

Sounds great, right?  Just throw together a description, file it now as a provisional application, and have a year to bring it to a skilled patent attorney to do it the right way.  Well, not exactly!  Even though no one will “reject” your description, because the provisional application is not going to be examined, there are two problems with this approach.

1. The priority you get is only as good as your provisional application is well written. Since effective patent writing requires a great deal of experience and skill, it is easy to file an application that does not fully connect the dots and adequately portray your invention.  It’s possible that you will be vulnerable even if someone else files AFTER you with their own well written patent application.

2. When creating the provisional patent application procedure, Congress specifically maintained many of the formal requirements of a utility patent application.  Most notably all provisional applications must still meet the "enablement" requirement under 35 U.S.C. § 112.  In English, what this means is that it is easy to draft a provisional application that doesn't have what it takes to really establish priority for you, and because your provisional will not examined, you won't find out until it is too late.  That is, even though the provisional application will not be examined by the Patent Office now, you better believe it will be scrutinized by teams of attorneys and by the courts if there is ever big money at stake.  Your provisional patent application can be the deciding factor in a dispute over whether someone else owns your idea!

All this being said, a provisional application is most likely to let you down most when you try to write and file it yourself (or even if you use some cheap service to throw one together).

In my experience, the reason people frequently do such a poor job of writing provisional patent applications is simply that they know it is not going to be examined.  It kind of feels like no one is checking, so it is o.k. to writeup and file whatever.  The fact that the application is never examined also has another important implication for the inventor.

Many companies (frequently non-lawyers) try to sell their 'provisional patent preparation' services, with little fear of customer dissatisfaction.  Because there is no chance the application will be rejected when filed, there is no need to file a well written provisional patent.  Few consumers who utilize these services will ever know they have been ripped off until it is too late.

From my perspective, spending anything at all to have one of these “cheap” provisional applications prepared is a waste of money.  It is not going to help you.  In fact, the biggest problem is that having this provisional patent filed gives individuals a false sense of security.  As stated before - you just won't know if it's good enough, until it is too late to do anything about it.

Everyday my staff and I talk to people who are boldly out there in the world, openly showing people their invention,s while believing they are safe to do so because they have filed a provisional.  When I take a look at many of these provisionals, however, I become scared for them!

On the other hand, a well written provisional can be a very effective tool in establishing protection for the idea, at a generally lower cost, while leaving room for further development of the idea.  There are different philosophies about how much is enough when writing a provisional.

My approach is - when I write a provisional, I give it the same care and thought as if I were writing a utility patent application.  The key to writing any good patent application is an ability to pay critical attention to the essential core elements, and make effective distinctions about them using language that is simultaneously broad and precise.  This applies equally to provisional and utility patent applications.  In the provisional, however, it is often possible to save money by sticking to the essentials, while perhaps eliminating some of the overkill that is customary and even expected in utility applications.

So back to the original question: is there a way to save thousands on patenting? The answer is yes - you can do so by having a patent evaluation conducted. Paying to have proper research performed and getting the right advice in the beginning, can save you thousands that would have been spent attempting to patent something that could never be patented.  Spending some money (and time) to save larger sums of money (and time) is the only effective short cut I know of.

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Even if you already know what you are willing to spend on this project, however, before you begin spending it you should confirm if your concept/idea is patentable. This will help you see if it is even worth trying to take your product to market.  To figure that out, it is necessary to see what aspects or how much of your product is patentable (if it can be patented at all). While it might not be the only factor - knowing if you can make the product yours by patenting it should play a big role in your decision-making, so no one else can attempt to sell it and profit for the life of the patent.

Naturally then, this budget should provide for legal fees to have the appropriate patent applications prepared and filed for you, as well as costs associated with business planning and manufacturing/production. Obviously these costs will differ dramatically from circumstance to circumstance, but here is a general idea of what you can expect.

The average recommended budget to allocate towards legal fees for small businesses, or for individual entrepreneurs, is anywhere from $8,000-$20,000. For these types of individuals and businesses - which are our typical clients - this is a reasonable amount to expect. Of course this will depend on your project, and what is at stake. Just like it makes sense to purchase more insurance when the property being insured is of greater value, it makes sense to budget more for protection when the overall project is going to involve larger investments and thus there is more at stake in gaining as much IP (Intellectual Property) protection as possible.

Therefore, paying a patent attorney to conduct an evaluation is an important initial investment to make. It's importance should be gauged in terms of what you have to gain if it is protectable, and also what investment of time, resources, and even credibility you stand to lose if you jump into a project without having the right information in hand. You should expect to pay anywhere from about $1000 to around $2,500 to figure this out.

After the evaluation helps you understand what your options for protection are, and of what value the available protection would have for your business plans, then you can begin putting together a budget for the project.

If you do not expect to bring the product to market initially on your own, then you intend to license your patent rights to a company interested in producing and selling it, in return for paying you royalties. In such circumstances, your budget might not be greater than the legal fees in gaining protection and minor expenses in reaching out to such companies. However, I recommend that you budget for building a prototype, or perhaps designing a more finished project. While not completely necessary, having a more polished item to demonstrate during a presentation will help such a company visualize and appreciate the product as something they want to sell. Prototypes can vary tremendously in cost. Simple items can be made at home with materials purchased at a craft or hardware store. More polished prototypes, built by a professional, can run into the thousands. But before spending money on building a prototype to potentially sell your idea, you need to understand whether the concept is as unique as you think it is. Because remember, whether a company is willing to license your project will depend heavily on the strength of the patent you have.

If you are not personally going to be responsible for the general business operation, then you might attempt to hire someone to manage the initial phases of planning, manufacturing, and then sale (and possible marketing) of the product. Typically, a budget for this can start at $10,000 upwards (depending on the project), and skyrocket depending on what they will need to do. In my experience, while certain tasks can be outsourced to others, it is not possible to delegate too much of this to another person. You need to be willing to be the main force behind your project, and remain in charge of coordinating the efforts of those involved.

If you plan to manufacture the product on a contract basis, you must add the costs of manufacturing to the initial business operation, you can assume you will have to spend anywhere from $20,000 for an initial order of an easy to manufacture product that uses off-the-shelf components. Of course, this number can be astronomical if your product is complicated, and requires custom parts to be fabricated prior to assembly.

Obviously in many cases there are alternatives on a smaller scale that would not cost anywhere near as much, but that often depends on the scale at which you would like to get started. Sometimes a limited production run can be made to produce sufficient samples to gain orders from distributors and retail outlets, at a higher per unit cost, but at a much lower overall investment.

Clearly whatever path you take, there will be a significant investment of time, money, and other resources. The value of finding out finding out accurately whether your project is viable - at an early stage - can easily be measured in the time and money you will invest (or not invest) later on, depending on what you learn about the feasibility of your project.

One thing we focus on here at our firm is offering you creative steps you can take, unique to your particular circumstances, when it comes to taking your product from patent to licensing agreement, or to market. We’ve seen every type of arrangement, and we can recommend which path will best fit your own circumstance and needs.

If you want to get direct information on what your options are, a patent evaluation with us can help you figure out what the next best steps are. It will also help you determine if patent protection is available for you idea or concept, what the scope of that protection looks like, and what value it would be for you; either in seeking a licensing idea or personally introducing your product to market.

To schedule your evaluation today, call us at 800-728-8166 to speak with a member of our team now.

The next step is to make some type of agreement between you and the company. The purpose of the agreement would be to give them the right to manufacture and sell your invention, in exchange for them paying you royalties. This type of agreement is commonly called a “licensing agreement”, and it is an essential part of getting paid for what you have created.

Precisely because it is such an essential step, it is also a step that must be taken very carefully.

There are many traps or pitfalls that can occur when making a licensing agreement, that we can help you avoid. In this article, we discuss one of the most common traps, so that you are ready to enter this phase of commercializing your invention with the proper amount of caution.

There are two main types of licensing agreements: exclusive and non-exclusive. In other words,. If the company you are dealing with will be the only one you allow to produce your invention, then you are talking about an exclusive licensing agreement. On the other hand, a non-exclusive license agreement means that when you are finished making a deal with this company, you can turn around and look for other companies to also make deals with.

Non-exclusive license agreements can really help a product spread. For example, when Phillips invented the compact disc, they licensed their technology to many different companies who were then allowed to produce compact disc players. This allowed the compact disc to virtually replace phonograph records within a few short years.

For an individual, however, it will usually be the case that the company you are dealing with will want an exclusive license. For this reason, you must be aware of the biggest trap that inventors fall into: what if the company to whom you have given an exclusive license decides to “shelve” your idea?

Consider this example. You are talking to XYZ Corp. about licensing your invention. They love the idea, and they project $10 million in sales over the next three years. It all sounds great, so you enter into an exclusive agreement with XYZ Corp. to manufacture your invention. The term of the agreement is for the life of the patent. They agree to pay you a 10% royalty on all products they sell. This seems great. If all goes according to plan, you will rake in a cool million dollars in royalties!

But what happens if a year goes by and XYZ hasn’t produced or sold your product. How much do they owe you in royalties? Two years go by? Five years go by? The answer in all cases is zero. They don’t owe you anything unless they produce the invention. If they never produce it, they never owe you a single dollar.

Now if years go by and they never do anything with your invention, you are free to find another company to work on your invention or to do it on your own, right? Wrong. If you made the agreement described above, you would be effectively stuck. All of the rights to produce your invention would belong to XYZ, for the life of the patent – which is forever in the world of an invention. And XYZ would never have to pay you a penny for it!

To avoid this trap, there are several things you can do:

1. Limit the term: This is the most basic defense against a company that doesn’t follow through with producing your invention. If the contract is for a limited term, at some point the rights will revert back to you.

2. Get money up front: Sometimes money obtained upon signing the contract is called “good faith money.” That is because it tends to show that the company is serious, and acting in good faith. If they weren’t serious, they probably wouldn’t be willing to pay money up front. The only way for them to recoup their investment will be to actually produce your invention (which would begin generating royalties for you anyway). So the money they pay you is a strong motivation for them to get things moving forward, and usually demonstrates their genuine intent to do so.

3. An anti-shelving clause: Putting such a clause in the agreement will give you the right to cancel the contract if the company doesn’t perform certain agreed upon actions. Sometimes a timetable is created for moving the invention into production. Other times this clause is structured as a “minimum royalties guarantee” – requiring the company to either pay you a minimum royalty in a certain time period, or default on the agreement.

Clearly, the most important thing you can do is to have an attorney experienced with licensing agreements on your side! There are many more details that ought to be addressed in the licensing agreement that are beyond the scope of these article. A professional will make sure your best interests are considered.

And remember, when it gets to the point that a company is seriously considering entering a licensing agreement, they will have their own attorneys research your invention to determine whether you are likely to get a patent, and how strong such a patent would be.  

If you don't have a good sense of what they will find out in their research, not only could this be a deal-breaker, but also give them reason to move on with the idea without you! This is yet another reason why having done your homework ahead of time, with a proper evaluation, will help prevent surprises later.

Call us at 800-728-8166 to set up an evaluation with a member of my team now.

The process of selling an invention is simple, although getting results are no necessarily easy. Here are my 4 Steps to Selling Your Invention:

1. Make Sure Your Investment Is Protected: Do not do any of the remaining steps, or publicly disclose your invention in any way, until you are sure it is safe to do so. And that assurance should come from a registered patent attorney who is fully apprised of all facts and circumstances of your situation.

2. Find Prospects: Research companies that are an ideal target for your idea. The ideal target could be a company that makes products similar to yours, sells or distributes products similar to yours, and even companies that manufacture products that are manufactured using similar manufacturing processes as would be required to make yours. Of course the best place for you to do this research is on the Internet. Perhaps the best resource is "The Thomas Register". It is a directory of thousands of companies in as many different industries. This directory used to be contained in a set of about 30 heavy green books I used to keep in my office library. Today, it can be found simply at www.thomasnet.com. Otherwise, standard search engines will likely locate some good prospects. When you find a company that seems like a good target, find their address, in the “about us” or “contact us” tabs. Once you have a list with at least a few names and addresses, you are ready for the next step.

3. Write a Letter: The letter should be brief. Do not describe the details of your invention yet. Simply show them that you understand the type of business they are in, and tell them you have a patent pending invention (only say this if it is true), that you believe your product will enhance their current product line and allow them to increase sales and reach new customers. Then invite them to contact you for further details.

4. Mail the letters directly to a person, if possible: Do your best to find the name of a person at each company – if possible. If not, send it to the President or CEO of the company. Doing this will either get it to the top person, or it will be handled by a person within the company who knows it came from the office of the President (and it will be handled it with care).

There are numerous ways an inventor can transform a patent pending product or concept into profits. It is simply a matter of choosing and pursuing a route that is most suitable to your circumstances and goals. And as previously stated - the process is easy. It simply involves "leg work". You don't need to hire someone to do this. In fact the person most likely to care enough to be persistent enough to get to the right person, is you.

Remember, how interested any company will be, the deal they are willing to make, and what they are willing to pay, will be a function of how strong your patent protection is. Strong patent protection can also be the difference between smartly using a process like this to find a buyer for your patent, and recklessly exposing your valuable idea directly to the “wolves” with little recourse if they choose to do it on their own.

In order to figure out what route is most appropriate for you, and to understand how your product/concept can be secured by the most extensive legal protection for your project, you will want to set up an evaluation with us.

To find out what it would take to actually ‘get’ that protection, please call our offices at 800-728-8166 and speak to a member of our team. They will be happy to discuss the possibility of conducting an evaluation for your project. This evaluation can set you on the path to both securing your patent, and the possibility of monetizing it.

This is the battle cry of inventors and corporate executives alike, when they see a copycat product and find out there is nothing they can do to stop it. This statement also is the result of a limited understanding of how patents work.

It is perfectly understandable that someone would respond like this when faced with a copycat product. It can be enraging to know someone took your invention/product idea, when you thought you were protected.

The mechanics of what a patent protects can be rather complicated. Few patent attorneys explain what is necessary, so that their clients fully understand the boundaries of protection under their patents.

The question you need to be ask is: “Why doesn’t my patent give me the right to stop them from copying me?” - or – “I thought my patent covers the concept and they copied my concept--how is that possible?”.

The answer lies in understanding exactly what the patent “covers”.

First thing to understand, is that there are different types of patents and they offer drastically different types and levels of protection. The two main types of patents are design and utility.

Design patents only protect the ornamental appearance of a functional item. They are useful in preventing someone from directly ‘knocking off’ a product, by unimaginatively copying it’s appearance in full detail. However in protecting a functional concept itself, they are not valuable.

The above battle cry - “But I have a patent!” is very often heard from people who own a design patent, and don’t understand the limits of its protection.

Utility patents protect a functional invention. Generally, if you have a functional invention, the goal is to get a utility patent.

However, just because you have a utility patent, that doesn’t mean your invention is protected. Patent claims can be “broad” - protecting a whole concept that would be difficult for someone else to duplicate without infringing your patent. Patent claims can also be “narrow” - protecting only a very specific configuration of your invention. Having read many thousand patents written by various patent attorneys, I can tell you that I have seen patents having narrow claims far more frequently than patents having broad claims.

In other words, the “claims” in your utility patent can make the difference between having a patent for the three legged chair, and having the patent for a very specific configuration for a three legged chair. The latter, would require a person to copy your very specific configuration in order to infringe the patent. The value of such a patent then, would be quite limited. It would only be valuable to someone who believes that this very specific configuration would be important to consumers.

Clearly then, patent claims can make the biggest difference between a patent that is valuable and a patent that is worth very little.

It takes a lot of skill and experience for a patent attorney to draft a claim that is not only broad (protecting the concept), but will be approved by the United States Patent Office (USPTO).

Other than the skill of your attorney, however, the biggest factor in determining whether you get broad patent claims or narrow patent claims is the already existing patents that are closest to what you have, known as the “prior art”. The rule is, the claims can only be as broad as the prior art permits. It makes sense: the USPTO will not allow you to patent things that existed before your invention.

So, of course your patent attorney must be good at drafting broad claims. But to do so, the attorney must first locate and interpret the patents most similar to yours. A good understanding of the prior art then, is necessary for them to draft the claims of your patent around the prior art.

It is also important for your patent attorney to understand the practical aspects of your business. This way when they write the patent claims, they are taking into consideration what other people in the same industry might try to do, in an attempt to get around your patent.

So, can you get a valuable patent for your invention/product idea? The best way to find out if you can get a valuable patent is to find the closest prior art to your invention. And the best way to do that is to find an expert who is skilled at understanding and explaining the differences between your invention and the prior art.

Knowing that you can likely get a patent is certainly good news. However, it is more important to find out how broad your patent can be, because that will determine the value of your patent.

That first step in finding this out is to set up an evaluation with us. In this evaluation you will know if your invention/product is patentable, and how broad your patent can be, which determines how valuable it will be. Simply call us now at 800-728-8166 and speak with my team to discuss the possibility of us starting an evaluation.