The Inventor Lady

The first thing the average inventor does when he or she first conceives of a new invention is to run off to a patent attorney.  This is done under the mistaken belief that the attorney is capable of producing all the “magic” that will culminate, eventually, in the inventor retiring to some tropical island and spending the rest of his or her days consuming My Tai’s with little umbrellas on top.  This approach is wrong on several levels.  This blog will deal with just one area, however: the patent search.

SHOULD YOU REALLY BE USING A PATENT ATTORNEY TO PERFORM A PATENT SEARCH?

The first thing an inventor should spend money on is a professional patent search, performed by a professional researcher.  It’s important to understand that not only must the person doing the research understand how to do an exhaustive search (which actually requires more library science expertise than legal expertise), but the researcher must also expend whatever time may be necessary to ensure that the search is as comprehensive as is reasonably possible under the circumstances.

Patent searching is a difficult and time consuming business.  It requires staff that are well-trained in general research, have a natural curiosity and inclination to “go the last mile” and, yet, do not demand a king’s ransom in order to do a good job.  While capable and competent patent attorneys can certainly do, at least, as good a job as a professional researcher, there is a significant disparity between what professional researchers charge (or the level at which they’re compensated) and what a typical, qualified patent attorney would charge.  Assuming an average of six hours per search, and compensation level for a professional researcher at $25.00 per hour (not including overhead and other operating costs) versus a professional fee level of $250.00 per hour for a qualified attorney, you can easily see that the cost of having a good patent search performed by a professional researcher versus one performed by a qualified attorney is considerably less expensive (i.e., $150.00 versus $1,500.00).

Some attorneys will claim, however, that they can perform a search for $500.00 to $750.00.  If so, then you need ask yourself the following question:  who’s actually performing the search???   What will the search include (more on that point below)?   Is it the attorney, who normally bills at $250.00 per hour, or is it some low-level, lower-paid subordinate (e.g., a paralegal, secretary or even, junior lawyer in the firm) that’s actually doing the research.  If so, then what are you actually getting?  Remember, a professionally done patent search requires three things: expertise, a willingness to be exhaustive and a lot of time.

WHY IT MAY BE BETTER TO SEPARATE THE PATENT SEARCHING PROCESS FROM THE “PATENTABILITY OPINION” PROCESS

A professional searcher merely performs the patent search and issues a patent search report; it’s not his or her job to provide an opinion as to whether or not you should proceed with a patent application.  Rather, it’s the patent attorney who then gives you an “opinion” as to whether or not you should try to file for a patent.  These are two distinct processes that should not be blended together; first the patent search and its’ results, then the patentability opinion.

An important point to consider here is if an attorney performs a patent search, what will the search include?  Will it include an international search as well as a product search?  A comprehensive search always includes a complete search of the U.S.P.T.O. databases, an international search and a product search.  This can take hours.  When the search is done, you have the chance to review it yourself.  Depending on your skill level, you may be able to determine if you should talk to an attorney or not.  There are times when the results of the search clearly indicate that there is just too much prior art to move forward.  Some engineers and serial inventors are very capable of going through their own search results and drawing conclusions.  If you have paid for an attorney to do the search and the “opinion” at the same time, you have wasted a lot of money (possibly thousands of dollars).

Second, while ethical attorneys will never engage in anything so reprehensible, from past sad experience with clients, we do know that there is the potential for a conflict of interest when you use the same attorney to both perform the search as well as to write the patent application.  A professional researcher has nothing to lose by finding prior art that could dissuade you from continuing to pursue a patent. 

IMPORTANT STEPS AFTER YOU’VE RECEIVED THE RESULT OF THE PATENT SEARCH

Once you’ve both received and reviewed the search results yourself, you should organize your questions and decide which Intellectual Property attorney you want to use.  A good attorney will ask whether or not you’ve had a search done and if so, he or she will want to review it.  The attorney will also ask you whether or not you intend to have a prototype produced and, if so, who will be building it.  Lastly, a good attorney will also ask you whether you’ve determined that you can make your product at a price the consumer will pay.  It’s important to remember that, once you’ve selected an attorney, you should have that attorney both review the results of the search and, where there does not appear to be a problem with proceeding, write your patent application as well.

Last but not least, in spite of what many people believe, neither attorneys nor search companies are infallible when it comes to “turning over every rock” i.e., uncovering every single imaginable relevant patent.  Intelligent attorneys and well-managed patent search firms have the same disclaimer about not being able to guarantee that every relevant patent will be found.  Paying more to have an attorney search doesn’t eliminate this standard industry disclaimer.

Inventors frequently want to hire one person who can do everything for them.  Bad idea.  Hire the right professional you need to do the right job at the right time.

One of the questions I frequently hear is “How long will it take to get into the marketplace?”  My answer is “It depends”.

My last blog was about creating a timeline that would help to keep you on track, but here are five circumstances that can impact your timeframe:

1. Most inventors still have a day job (good idea—you will need the money), but this impacts how much time you have to work on your product.
2. If you have family members to help with the work, you don’t have to bear the work load yourself.  You also have talent to draw on.
3. Inventors who jump the gun without proper testing of the product not only cause delays, but can destroy the venture all together.
4. Not all inventors have a good sense of business and this can also destroy your venture.
5. Take some time to educate yourself on the industry you’re trying to enter but keep in mind that some industries have more competition and in those industries products enter the market faster than in others.

Let me share some stories:

Inventor 1:

This inventor had a cute, simple gadget that was well received by the focus group.  There was a big box store that was interested in getting the product onto the store shelves.  The problem was that the product didn’t have adequate testing, and it never did the job under the conditions that it was advertised.  By the time the problem was detected, the inventor had lost credibility in the marketplace and with the big box buyer.  It would have been wiser to take the time to do the proper testing rather than rushing to market.   Remember, you only get one chance to make a bad impression.

Inventor 2:

This inventor has been working nearly thirty years on his venture.  It has taken this amount of time to do the testing and analyze the results and test again when necessary.  He also had to be aware of his working relationships so that there would be no conflict of interest with a current employer.  Once he retired, he was able to finish up the testing and get ready to file a patent.

Inventor 3:

This inventor also had a simple gadget that was well received during early sales.  She took her time to make sure the product really worked as it was suppose to work before contacting any major distributors. She also took her time because she had a day job that was funding the venture so that she didn’t have to take on any investors.  It took three years to get from “I have an idea” to having dry ink on a major licensing agreement.

Inventor 4:

This inventor seemed to be doing everything right.  He had the patent search done early and evaluated by an Intellectual Property attorney.  His invention was an electronic gadget so he went to a tradeshow to learn as much as he could about the new products entering the marketplace.

What he didn’t take away from the tradeshow was the speed at which new electronic gadgets are developed and introduced into the marketplace.  He had someone lined up to write the program but couldn’t decide whether or not to make the commitment to spend the money.  By the time he decided to move forward, there were new products in the marketplace that were very similar to his original concept.  Keep in mind that if you identify a problem or conceive a new process, others are out there doing the same thing. 

I share these examples with you to aid you in understanding that circumstances, industries, proper testing and money will dictate how fast you can get into the marketplace.  Different products and industries have different elements and aspects that you need to understand and with which you need to contend.

Most independent inventors can’t drop everything to focus on their invention. Inventors have jobs, kids, a spouse (maybe even more than one, if you’re slow in getting your invention off the ground). Simply put, inventors have a life other than just being an inventor. The problem is that life can get in the way of inventing.

Getting a concept out of your head and onto a store shelf is a time consuming endeavor. Tomorrows come and go. And before you know it, you either see a similar product in the market place or you just lose interest altogether and, in the process, waste thousands of dollars.

So after helping many of you manage this problem, I have some tips.

• Make sure you understand the time commitment and have time to commit.
• Set a budget and know that you can access the funds when you need them.
• Make a list of the steps in the process.
• Set time each week to get something accomplished.
• Get qualified people (not your drinking buddy) to help you do what you don’t have time for or don’t have the skill to do yourself.
• Check in with someone who can hold you accountable for your progress.
• Expect that you will make some mistakes (everyone does). Get help to get back on track and move on.
• Set a launch date for your product. This is important. The launch date may be a professional tradeshow. It is this target date that will help keep you on track.
• Create a timeline with all of the necessary steps and the launch date.
• Now, figure that it will take twice as long (adjust your timeline) and cost twice as much and you will have a reasonable timeline and budget.

From time to time, life will intrude but if you have a reasonable timeline it will be easier to get back on track. Your idea and your money won’t silently slip away because you were busy living.

What is a reasonable timeline? Read my next blog.

I just got back form taking 10 new products to the National Hardware Show.  What a wonderful experience for the inventors.  We had garden products, snow shovels, fun new home gadgets and even something for the swimming pool. 

After attending the show a few times, the only thing I can’t remember seeing is women’s fashion (as long as flip flops don’t count) and baby products.  This show is perfect for inventors with new products.  There is a lot of attention paid to new products and inventors.  Our booth was in the Inventor Spotlight section and we were busy all of the time.

The inventors were able to work the floor for their product and bring potential buyers to the booth.  It was a very successful experience for our inventors and their products.  I always tell inventors that a professional tradeshow is the best way to launch a new product.  All of the people you need to meet are at the professional level shows.

We are busy planning for next year already.  We learned how to better present the products in the booth for the various awards that are given.  We had a good show on two months of preparation.  With a full year of getting ready, I am sure we will have an absolutely incredible experience.  We already have six products reserving their spot in the booth under our affiliated organization, The Inventors Roundtable.

A few weeks ago someone commented on one of my blogs.  I was about to reply, indicating that I strongly disagreed, but instead I decided to wait, to think about my reaction, and to ask some of my seasoned inventor friends (and a few patent attorneys) before responding.  After considerable deliberation, I decided it was important enough to write a new blog about the subject of the comment.   

Here is the comment that was sent to me:  “A decent patent attorney should be able to see if a product is marketable and profitable and he should be able to offer advice on this. If he simply writes claims to collect your cash then you need to work with a different attorney and not use him again”.

In my opinion (and the opinion of everyone I polled) not only is the advice in the first sentence of this comment wrong, it is completely WRONG!   Most decent patent attorneys wouldn’t presume to offer you marketing advice; and, if they do, in most cases you’d be best advised to find another attorney.  Patents attorneys go to school first to study some type of science or mathematics-related course, and, then subsequently, an education in the law with, where possible, a specialty in patent law.  For most attorneys, nowhere along the way are they taught about marketing.  In fact, most attorneys are not good at marketing even their own business, let alone yours.  When I told my seasoned inventor friends (and patent attorneys) about the comments, they were all amused by the naivety of the writer. 

Marketing is an illusive concept.  The first part is market research.  Do you have a market?  What are the demographics pertaining to your product?  What industries and markets do you need to be concerned with or target?  Why would you want to pay an attorney his/her hourly rate to do this research?  If you need to hire someone to do this for you, hire someone who’s knowledgeable and who knows how to obtain the necessary information.

Next, there is the actual marketing/selling part of the invention.  How are you going to make your target market aware of your new product?  This is way out of most attorneys’ area of expertise. 

It is NOT your attorney’s job to tell you if you have a good idea.  It is your responsibility to make this determination with the help or others. 

I do agree with the last part of the statement about when to find another attorney.  A good attorney should ask you whether or not you’ve had a professional search done (you shouldn’t have an attorney do your patent search for you, either), who your engineer is, and whether or not you’ve established that you can make the invention at a price that the consumer is willing to pay.  If you don’t have this information yet, talking to the patent attorney at all, is premature.

You should expect to hire a variety of experts to help you.  Your attorney is only one of these experts.  If you are looking for a “general practitioner” who can do everything, you are setting yourself up for lots of disappointment and as well as buckets of wasted time and money.

A number of you have asked how to subscribe to The Inventor Lady.  While I’m no web maven, my web guy, Peter Bell, has advised that it’s actually very simple.

First, you need a default RSS Feed Reader.  For most of you, that’ll be whatever web browser you customarily use (i.e., Internet Explorer, Mozilla Firefox, Opera, Safari, etc.).  Your web browser will have an option that enables you to subscribe to RSS feeds.  Make sure that plugin is enabled.  Each web browser is different, but all of them have that capability built in.

As long as the RSS Feed Reader plugin is enabled in your web browser, you’ll be able to subscribe to The Inventor Lady simply by clicking the “RSS Feed” link under the heading “Subscribe” on the right side of the first page of my website (http://www.inventorlady.com/).  Doing so will bring up your browser on the subscription page for the website.   Once there, just click on the  ”Subscribe to this feed” link near the top of the resulting page.  Voila!   Your web browser will then bring updates to you on your RSS Feed-enabled web browser function.

If any of you would prefer to receive updates via e-mail, instead of through your RSS Feed-enabled web browser plug-in, let me know and Peter will put you on my subscriber list for periodic updates.

Good luck and happy blog viewing.

Regards,

Rita

I had a client call me last week for the sole purpose of venting.  It seems that she had received an office action from the USPTO and was upset over how much it was going to cost her to have her attorney answer the office action.   Her telephone call caused me to reflect and resulted ultimately in my feeling that I needed to blog about this particular issue.

First, it’s important to always bear in mind a simple truth: inventing is expensive.  There is no way around it.  If you are going to pursue your invention, it is going to cost money.  The exact amount of money varies from case-to-case depending on the complexity of your invention.

Second, it’s important to keep things in perspective: obtaining a patent for the invention isn’t the most costly part of the process.  However, it does seem to be the one that draws the most ire.  It will cause you less stress if you keep in mind that these fees are paid over a period of years not all at the same time. 

To give you a better sense of how involved the process actually is, here’s a list of the most obvious costs in the patenting process:

1. The first step is to have a professional search done.
2. Second, you need a review of the search by an intellectual property attorney before you meet with an engineer or make final adjustments to your design.
3. Third, have an intellectual property attorney draft an application for a utility or design patent.
4. Fourth, when you’re ready to file, there are filing fees that have to be paid to the USPTO.  This is in addition to your attorney’s fees.
5. After you’ve waited anywhere from 14 to 36 months, you should receive your first office action.  You will be charged for the attorney’s time to draft a response to this first office action.
6. Additionally, if you’re not diligent and you fail to file your response before the appointed deadline, you’ll have to pay a penalty to get your patent out of “abandonment”.  This is what it is called when you don’t respond in time.
7. Next, if there are no further office actions (generally not the case) and you get this far, there is a “Notice of Allowance”.  This means that the USPTO will issue your patent if you pay them the next fee which is around $800.
8. Once your patent issues, however, you’re still not done:  there are maintenance fees that you have to pay periodically during the life of your patent.  All of the fees are listed on the USPTO website and your attorney can give you a list so that you know what to expect.

Don’t be caught off guard.  Always ask “what is this going to cost”.  Educate yourself on the patenting process.  There are plenty of resources out there.  We try to make sure every inventor knows what to expect, but you have to pay attention.

I recently had a call from a patent attorney who wanted me to introduce him to my clients so that he could offer to buy their intellectual property from them. He has, what is called, an “Intellectual Property Holding Company” or “IPHC”.

IPHC’s come in essentially three different flavors.  The first category consists of those whose purpose is essentially malevolent; they buy up IP, lie patiently in the grass and wait until a major company introduces an arguably infringing product, and then they pounce on that company with a lawsuit, demanding extraordinary damages.  The purpose of the lawsuit is not to pursue the actual litigation; rather, the purpose is to use the litigation to force a settlement in which the IPHC extorts a lucrative contract for licensing the patented technology to the infringer.  These types of predatory IPHC’s are commonly referred to as “patent trolls”.

The next category are tax-advantaged off-shore subsidiaries of major industrial corporations with significant amounts of IP.  These types of IPHC’s are set up principally as a tax dodge.  As a category, they consist of off-shore holding companies in tax-friendly jurisdictions that are set up exclusively to hold the parent corporation’s IP and therefore secure for the parent, favorable tax treatment when the earnings are repatriated to the U.S.

The last category consists of groups of individual inventors who decide to band together to better position themselves to ultimately monetize their IP.

I always approach IPHC’s, particularly the patent trolls, with a measure of caution.  And, while I do not know the type of business model being pursued by the company represented by my attorney caller, my antenna were up.  Nevertheless, I do believe that there are circumstances when selling one’s IP to an IPHC might be a good option for an inventor.  And, there are even some situations when I might actually recommend an IPHC to a client.

As a general rule, however, it’s my opinion that you have other options that will prove more lucrative for you and should be considered first. You will get a much better offer if you do the work that is required to get a good licensing agreement from a company that will manufacture and sell your product.  It’s hard work, it takes time and money, but the pay-off is much more satisfying.  Therefore, in most situations, selling your intellectual property to an IPHC should be considered only as an option of last resort. 

Remember: always be careful and get help.  When it comes to selling, licensing and otherwise monetizing your intellectual property, it’s complicated and the price of a qualified, professional advisor is miniscule compared to the amount of money you might end up leaving on the table.

I get asked this question all the time, “Can I patent it myself?” Technically, yes, you can. However, my answer is always No. No! and Absolutely NO!! Doing your own patent work is like doing your own brain surgery. By the time you realize you’ve made a mistake, it’s too late to fix it. Let me explain.  I do recommend that you read about the patent process.  The book “Patent It Yourself” is a good one.  You don’t want to pay the Intellectual Property (IP) attorney to educate you.  That you can do yourself.  However, that said, there is a reason why these professionals go to school for years and take several exams.  Writing a good patent is a unique and specialized skill set.

I had a gentleman call me last week and ask about filing his own provisional patent application and then his own utility patent application.  If you’re going to bet your financial future on an invention, why wouldn’t you get the very best help and follow the steps that will give you the best opportunity for success?  Why would you risk everything on doing something that you are not trained for or had any experience doing. Would you really do your own appendectomy?

Honestly, unless you have the money to pay for a professional to file that patent application for you, you shouldn’t be going down this path at all.  Inventing is expensive and hard work.  Don’t cheat yourself by cutting corners on the important steps.  There are other ways to “bootstrap” that won’t put you at risk.

Inventors frequently swing to two extremes when it comes to their business plan.

The first one is simply: have idea – get patent – make money.  I can’t even tell you how many ways this is a flawed plan.  This plan is relevant only in fantasy land and real inventors can’t afford to live in fantasy land.  You have no proof of concept, no numbers, no packaging, nothing to sell and no customers.

The other extreme is equally flawed:  have idea – buy a piece of business plan software – go to a class – fill in the blanks – make money.  It doesn’t matter how much dreaming you do at this extreme, you can’t have accurate numbers without doing the hard work up front.  Again you have no proof of concept, no numbers, no packaging, nothing to sell and no customers.  With this plan all you are doing is guessing.  Real inventors don’t guess.

Honestly, the first stages of inventing do not require a business plan.  You have to do your homework first.  In fact, unless you are presenting to a bank or an investor, you don’t need a business plan until you are in business.  And then, a business plan serves as a road map for you. 

A more useful exercise is to develop a marketing plan after you know you have a product.  After all, if you can’t sell the product to a consumer, it doesn’t matter how good your business plan is.

The first inventing steps require your time and energy.  Do you own searching for like and similar products.  Search online, in stores and on the USPTO website.  Build a cheap version of a prototype.

The first thing you have to pay for is the professional patent search.  All of your business decisions will be based on the results of this search, but that is discussed in another blog.

FYI: You are still a long way from needing a Business Plan.