As you begin your prototype development, you will no doubt run across areas of design and function that need improving. While this is sometimes a frustrating process, those areas give you a unique opportunity to dig deep into your creative toolbox and develop innovative solutions that may not only be time and money-saving, but that can also protect your product by way of patents.

A really good prototype will help your product development team with manufacturing cost estimates and is useful for your marketing team to get feedback from potential customers. Also a physical prototype will help the legal team understand the claims that can be made on your patent and streamline the filing process with the USPTO.

Other Helpful Information:

One thing that may benefit you is to do an initial prior art search to try to see what other patents, published patent applications or other prior art is out there that could negatively impact your ability to get a patent, and to avoid potential patent conflicts that could arise after you have built your initial prototype. You should realize, however, that prior art searches are never perfect, and that they cannot possibly find unpublished patent applications.  We always recommend to do a prior art search to find products like yours.  You can do your own initial search, it will save you some money and could help you find other ideas to incorporate into your product.

If you have specific questions about this topic “Patent or Prototype? Which Comes First?” feel free to leave a comment or ask us live during our live web show on the first Tuesday of everything month. Sign up for the newsletter to get updates on show topics, guests and the latest news.

Global teamwork in new venture creation is not an isolated situation anymore, with technology advancing so quickly today, working remotely from anywhere in the world is becoming a reality and has helped spawn some of the best companies to date.

Phone calls and time differences are minor annoyances, but perhaps one of the most pressing issues is patent filing and IP protection.

Recently the Patents And Prototypes team received an interesting question from students involved in a Stanford entrepreneurship program. We’ll summarize the question and see if we can provide some insight on how to navigate some very tricky patent and IP issues when dealing with a global team.

Question: We’re creating IP early on in the program, we could just declare it public domain, and be done with this. On the other hand, we are in 17 different countries. Many of our members may have this as their only chance to be recognized for their IP.. How do we best handle this and what are the options available to us?

Answer:

1. Business entity. Normally, in the US, when you have a number of inventors who all contribute to an invention, one of the best ways of making sure that everything is “in writing” is for all the inventors to assign their rights in the patent application (and all related patent applications) to a business entity, such as an LLC or corporation, and to have a written agreement signed by all the inventors detailing their expected contributions and compensation. With so many overseas inventors, you have added layers of difficulty. You should really consult with a business formation attorney familiar with such situations, but as a starting point, I would suggest considering having a US business entity that holds a US utility application and a PCT (Patent Cooperation Treaty) application, and most certainly have a written agreement between all the inventors regarding their duties and rights.

2. NDA. These do not offer the best protection since it can be quite difficult to prove that a potential licensee/investor/manufacturer “stole” your idea based on confidential information you provided. Have a pending patent is often a superior means of protecting your invention. However, it is a good idea to use an NDA when dealing with non-lawyers to prevent your discussion with them from becoming a “disclosure” under US such as 35 USC 102 and its foreign counterparts.

3. Foreign IP. When I advise clients on foreign filing, I urge them to look at several factors:

A. How many people live in the country?
B. Does the average person have enough money to buy your product?
C. Will the people of that country buy your product (cultural factors)?
D. Will that country enforce IP against its own citizens?
E. Is it a country where the product is likely to be made and/or copied?

Once you ask these questions, most of my clients are left with a list of a few target countries, with plenty of people, with enough money to buy your product, who will buy your product, in a country that will enforce IP laws. Here is the normal list:

Definitely: (Large countries) US, EU, Japan, (Smaller countries) Canada, Australia, South Korea.

Maybe (missing at least one of the key factors): Mexico, Brazil, Taiwan, China.

Perhaps: Russia, India

So, I would strongly urge your group, if they are going to invest in IP, to do a great job in a few countries rather than a poor job in many countries. Your own members should be honest about their countries in terms of IP protection. Many smaller, poorer countries have things like civil wars, famine, etc., and protecting IP is not a major consideration. All the inventors get their names on a patent application in the US, so if you only file in the US, at least that way everybody has a chance to be a “patented inventor”.

4. Cheapest way to get started? The cheapest way to get started is with a provisional patent application in the US ($3,000 to $5,000). This gives you a year of “patent pending” status, during which you can try to raise funding, do some more R&D, or perhaps even sell your invention and its patent rights outright. You need to understand the concept of “disclosure” of an invention, and “absolute novelty” countries (you can Google this). Within a year of the provisional filing date, you can file a PCT (Patent Cooperation Treaty) application off the provisional, or, better yet, off a utility patent application that effectively claims the filing date of the provisional. If the “appearance” of your invention is the important thing (and you are not likely to get a utility patent on the “function” of the product), perhaps consider a design patent application.

Troy talks about the show:

“I’ll be tapping into my network of some the worlds greatest entrepreneurs, consultants, and business minds for the guest line up. My time as the Global President of The Entrepreneurs’ Organization gave me such a great introduction to so many interesting business people around the globe, many of whom have become friends, these are the people you’ll see join us on the show! – They are real, interesting, authentic, and fun!”

The April 20th, 2012, show titled “The Next Big Thing” guests include Joe Donoghue, President and CEO, Leardon Solutions discusses the process to getting your idea or invention, make a prototype and get it into the market.  Also,  Jon Doogan, CEO, Aculiefe  is also an on air guest to discuss his invention.

Please tune in weekly to Gettin’ Down 2 Business.

The two biggest problems with “contingency fee” patents are, first, the need for a number of warning documents to the inventor regarding attorneys going into business with their clients, and second, you are “betting” on the inventor being successful.  With respect to the second point, betting on an inventor can be very risky, as so many times the inventor is some combination of the following:

• not business savvy
• underfunded
• will lose interest and enthusiasm,
• did not do a prior art search and/or USPTO finds additional prior art which requires additional,unexpected time to be spent on the invention
• tries to “DIY” on things he/she should hire others to do
• hires others to do things he/she should “DIY”

The odds of succeeding as an inventor are small, and the problem for most is not a patent. If patents were a license to print money, I’d be a full time inventor and not a patent attorney. Most of our clients who have succeeded have done so with help from IP, but not because of it. On the other hand, I have many clients who got a patent but did not make a reasonable amount of money (if any) off their invention.

A final problem is that many inventors have an overly inflated idea about the “worth” of their idea.  A good article on one entrepreneur Derek Siver’s opinion here.   So, the inventor thinks his idea is worth $10,000,000,000, so by offering the patent attorney 1% of the invention, he thinks he is offering the attorney many times the attorney’s normal rate for a patent application and prosecution. The patent attorney, on the other hand, probably sees things more along with lines of Derek, and thinks the idea is worth maybe $20 at most. So, the attorney is not enthusiastic about putting in $5,000 to $15,000 of time into a $20 idea, knowing full well that unless the inventor has what it takes to succeed, the attorneys may get their name on a patent but nothing more.

So, what kind of inventor will succeed? Briefly, here are my top characteristics in order of importance:

1.  Has an invention that works

2.  Adequate funding

3.  Good Luck

4.  Inventor tenacity

5.  Quality invention.

Patents and Prototypes is for the innovator, entrepreneur, inventor or startup ready to launch a new idea and product into the world.

Come watch the live show here and add our show schedule to your calendar.
We’re a community of folks that believe a combination of hard work, dedication and passion can build dreams and change lives.
Patents and Prototypes is not an invention promotion company. Patents and Prototypes was started with the intention to help risk takers understand the patent and product development process to hopefully lessen the amount of risk and increase the chances of success.

Our Show Features Joe Donoghue and Eric Hanscom discussing the basics of product development and the patent process. They will take your questions live. To register and watch the show please click on here!

Not too long ago, Apple Computer accused a Chinese company that produces flour and noodles of infringing Apple’s trademarked “Apple with a bite taken out of it”. The Chinese company, Sichuan Fangguo Food Co., Ltd., thinks that Apple is full of applesauce. The trademark in question is a stylized apple with two Chinese characters in the center, a stem and a leaf, with the lower left quarter removed. Apple is claiming that a red Apple logo it has already trademarked.

Here is a link that shows the two logos: At first glance, Apple’s claim seems ridiculous. Yes, both are red and both represent stylized apples missing a section, but to allege that a consumer would be “confused” over the two logos paints a very dismal picture of the average Chinese consumer. So, Apple should clearly lose, right?

Indeed, the noble Sichuan Fangguo Food company was only two days away from having its trademark approved when Apple started throwing rotten fruit at the application via the Chinese trademark office. The respective shininess of the apples, however, become less clear upon peeling away a few layers. It turns out the Sichuan Fangguo Food had applied to register this logo under 16 different classes – we beyond the flour and noodles it is known for. And, amazingly enough, they filed for protection on products such as “notebook computers” and “electronic game software”. Sounds like a certain company we know of, doesn’t it?

So, I wonder why Sichuan Fangguo Food wants to expand beyond, well, the last word of its name? Fangguo CEO Zhao Yi explained that he wants to expand his brand name into other types of products. Hmm, this apple is not smelling quite as fresh. Apple even offered Zhao the proverbial olive branch and offered to resolve the dispute by having Sichuan Fangguo Food remove the leaf and abandon prosecution of its trademark applications in categories which overlap with Apple Computer. Zhao countered by claiming that if he removed the leaf, his logo will look like a bomb.

Our advice: Go back to making noodles or change your name to Sichuan Fangguo Global Products; as for Apple Computer, you might want to realize that this little company called Apple Records was around well before you were.

The first change is that, as of March 16, 2013, we change from a “first to invent” to a “first to file” country. Under current law, if Inventor A invent something before Inventor B invents the same thing, but Inventor B files for patent protection before Inventor A, Inventor A can still be awarded the patent so long as he/she did not unreasonably delay in turning the idea into a patent application. What is “unreasonably delay”? The difficulty in determining this (and trying to sift through the often fraudulently mis-dated laboratory notebooks and phony meetings that were supposed to have taken place), has caused the shift in this aspect of innovation. Now, the first inventor to FILE for patent protection wins the race to the patent, and second to file loses the race.

OK, paranoid inventors*, take a deep breath. I know what you are thinking. That you will show your invention to an evil company that will steal your idea, file its own patent application and beat you to the USPTO. However, inventors must still sign a declaration that they are the inventor of the invention claimed, so an invention-stealer cannot legally take your idea and file their own patent application on it. Could this happen? Yes, it is possible. What is the solution? Diligence and an early provisional.

So long as you are going to enter a race to the patent office, our suggested vehicle of choice is the provisional patent application. A provisional is not a true “patent”, as it is not examined and does not give you any enforcement rights, but it can buy you a one year grace period during which you can more carefully prepare and file a utility patent application. OK, so why don’t you just go online, get one of the those “fill in the blanks” patent applications, take 10 minutes filling it out and then turn it in. You have a year, so then just figure that you can ask a patent attorney to prepare the utility patent application before the year expires and he/she can do all the hard work to take your 10 minute provisional and turn it into a solid utility patent application that will hopefully result in a strong utility patent. Right? Should be easy, huh?

Not so fast Mr. Cheapo. For a utility patent application to claim the filing date of the provisional, the provisional has to “support” the utility – and the USPTO examiner WILL check this – and if you have a garbage provisional, it is much less likely to support a utility application than would a well-drafted provisional. Well, so what, I just lose the early filing date, right? Yep, and what if someone else files a quality patent application, either provisional or utility, on the same invention after your provisional date but before your utility date? Since your utility cannot claim the provisional filing date, you have saved some money but you are now in second place in the race to the patent office, and under the new law, second place loses the race.

* “There are two types of inventors: the paranoid and the more paranoid” Ron Reardon, 2009 NAPP Conference. Brought the audience (mainly patent attorneys) to its knees with laughter.