Friday, December 22, 2006

A Terrific New Resource from Google

These days it seems Google has its hands into everything on the web. In addition to the great search engine, they provide an image database, GoogleEarth with presents incredible images of the earth from above and blogger.com through which we bring you this very blog.

BUT their most recent offering is perhaps the most exciting (well, at least to inventors and patent attorneys alike). Introducting Google Patent Search. Now over seven million patents are available through the incrediblly simple and easy to use Google interface. And it is not keyword search limited like the USPTO search interface.

Try it out and tell us what you think.

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Monday, December 18, 2006

Colorado SBDC Network

A recent Forbes.com article (http://www.forbes.com/home/entrepreneurs/2006/12/15/shopzilla-adozu-vonage-ent-fin-cx_kw_1215wharton.html) discussing topics addressed at the 2006 Wharton Entrepreneurship Conference got me thinking that I needed to do another blog post. Specifically, the article discussed how too much emphasis is placed on venture capital these days when historically business have been funded using friends and family, credit cards, second mortgages, and Small Business Administration (SBA) loans.

It was this SBA snippet that got me thinking I needed to do some shameless plugging of the services provided by Leyendecker & Lemire, LLC. No, we don't fund companies, but we do work with an organization, the Colorado SBDC Network, that can provide you with information on how to do so. The SBDC is a great organization as it provides, free of charge, a seemingly endless supply of information on how to get your start-up off the ground and running.

The SBDC recently asked us to provide our services for an intellectual property seminar. So, ON JANUARY 24, 2007 FROM 3PM - 5PM, MYSELF, KURT LEYENDECKER, AND PETER LEMIRE WILL BE HOLDING AN INTELLECTUAL PROPERTY SEMINAR AT THE SOUTH METRO DENVER SBDC OFFICE. To sign up for this free seminar, click here: http://www.smallbusinessdenver.com/events.cfm. Specifically, we'll be discussing patents, trademarks, and copyrights. However, if there's a question on how to fund your business, we'll give it our best shot. Hope to see you there.

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Tuesday, December 12, 2006

Jolly Rancher Soda Revisited - the "Taste Test"

Well, its been over a year since Kurt initially cited Jolly Rancher Soda as a product that had "apparently failed miserably" while illustrating the point that even large companies with multimillion dollar research and marketing budgets have failed products now and then and that there is really no way to absolutely predict whether or not your product, invention or startup business will be successful. The illustration was not meant to be a slam against Jolly Rancher or Elizabeth Beverage in any way, we believed the product was being closed out and liquidated. However, our good hearted intentions did not stop the president of Elizabeth Beverage Company (the Licensee of the Jolly Rancher Trademark from Hershey) from calling us to inform us in no uncertain terms (and in our opinion a quite heated discussion) that the product had not in fact failed miserably and was in fact quite successful. According to Elizabeth Beverage the product Kurt saw was in Big Lots due to a labeling issue.

Since we know people from Elizabeth beverage routinely search the web for references to Jolly Rancher Soda - I'd like to take the time to give them a big shout out.

Presumably in response to Kurt's statement "the thought of Jolly Rancher Soda pop kind of turns my stomach" the President offered to send us a case of soda to try - we said sure we'd try it out.

Well its been a year now and guess what - our free case never arrived. So while at a shopping trip to Sams Club the other day we stumbled across a variety case of you guessed it - Jolly Rancher Soda! Being the last one in the store, we snatched it up and decided to do a taste test just for kicks.

First Impressions:
The soda in our case had four flavors (From Left to Right): Blue raspberry, Green Apple, Grape, and watermelon. As you can see from the photo they did a good job of replicating the colors of the actual Jolly Rancher candies. On additional note: If you mix the Green Apple and Blue raspberry, you get a really cool fluorescent green color that seems to glow in the glass - this could provide some good fun a Halloween or college parties. I wonder if it would glow under a black light. Sadly enough, we do not have a black light in the office - so I am relying on one of our dedicated readers to try it out and report back to us.

The Test:
Kurt, Shane and I each taste tested a sample and recorded our opinions of how we liked the drinks. On the outset, I should caveat the results with the fact that none of us are admittedly fans of fruit favored soda in general. We rank the taste on a scale of 1 to 10 with 1 being comparable to urine and 10 being your favorite soda. Therefore water would be a score of 5 (presumably 5 is a neutral score). The results with selected comments can be seen in the following table available below (I apologize for the quality of the table - its the best I can get at the moment - if anyone is really curious I can e-mail it to you).


As you can see by the rankings we found that the Blue raspberry flavor was liked best of all (average score of 5.83) and actually would receive a slight edge over just drinking water. In fact, I have had several at lunch over the past few days and have actually enjoyed them, I don't know that I will buy any more once our supply runs out, but they have been pretty good. Grape also faired fairly well (average score of 5.33), and also just edged out drinking water (none of us are big grape soda drinkers, but we found it to be on par with Welches Grape soda and the like). If you like grape soda, you will probably like this one. Unfortunately we found the watermelon (average score of 2.17) and green apple (average score of 2.50) to be, in our opinion, quite disgusting, and in our opinion wouldn't drink it unless we had no other alternative.

So there you go, if you are going to take that leap and see what a Jolly Rancher would taste like as a soda - we are of the opinion that the Blue raspberry would be the one to try, and more than likely you will come away with the feeling that it wasn't half bad. We would personally stay away from the apple and watermelon, however for those risk seekers out there it may be a good thrill. Additionally we would suggest serving them really cold - it seems to make them be a little bit less sweet tasting and more drinkable - but hey that's just our opinion - I'm sure a lot of you could slug them down at room temperature.

Lessons Learned from the Experience
Anyway, the point of the original blog post still stands true - no one can predict for sure whether something will be incredibly successful or fail miserably. Almost a year and a half after we incorrectly announced the demise and failure of Jolly Rancher Soda - it is still on the market today and you can purchase your very own case and have a taste test of your own. Who knows, you may even like it.

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Inventhelp and Davison - the truth behind the polish

Anyone who has read this Blog knows my opinion concerning invention promotion companies: I don't like them and I believe that they offer little if any value for the amount of money they charge. And you also know some of these companies do not like me (see my Sola posts).

One of the largest players in this field is InventHelp, who can be found at www.InventHelp.com. They were formally known as the Invention Submission Corporation. You can learn more about these guys and other promotion company's at www.inventored.org. Anyhow, InventHelp has a new (at least it is new since the last time I looked) website that is very polished and inviting. In perusing it, I can across this statement pulled directly from their site:

"From 2003 to 2005, we signed submission agreements with 6,592 clients. As a result of our services, 119 clients have received license agreements for their products, and 15 clients have received more money than they paid us for these services."

See www.inventhelp.com/story-weed-thrasher.asp.

Let's do the math: Only 0.23% of all clients who paid money to InventHelp between 2003 and 2005 actually made more money than they paid into InventHelp by way of licensing agreements presumably obtained through InventHelp services: that is 1 in 439 clients. Also interesting is that another 104 signed license agreements but, at least when InventHelp reported these statistics, the licensees had made less from the licenses than they had paid InventHelp.

Truth be told: making it in the invention game is always difficult and success numbers are never going to be extremely high, BUT 0.2% is, in my humble opinion, really low. I believe I have seen surveys and statistics at various locations that indicate that anywhere from 5-10% of all patented inventions are successful (I will try to find some of these stats and publish them in the future). In reality, I believe the true figure is even a bit lower than 5-10% but I suspect it is much higher than 0.2%. One would think that using the services of an invention promotion company would actually improve the chances of an invention being successful but InventHelp's own statistics appear to indicate otherwise. I welcome a comment and response from InventHelp explaining their statistics.

And while I am on the topic, let's take a look at another player in the invention industry, Davison, who can be found on the web at www.davison54.com.

Here are their stats taken from their website current as of 10.26.2006:

"The AIPA requires the disclosure of "the total number of customers who have contracted with the invention promoter in the past 5 years, not including customers who have purchased trade show services, research, advertising, or other non-marketing services from the invention promoter, or who have defaulted in their payment to the invention promoter." As of the date of this disclosure, the number of applicable customers for Davison is thirty six thousand nine hundred fifty four (36,954)."

They continue...

"The AIPA requires the disclosure of "the total number of customers known by the invention promoter to have received a net financial profit as a direct result of the invention promotion services provided by such invention promoter." Because the AIPA defines "invention promotion services" as "the procurement or attempted procurement for a customer of a firm, corporation, or other entity to develop and market products or services that include the invention of the customer" the company may exclude fees paid for services such as design and construction of prototypes from the expenses incurred by its customers and may report that twenty one (21) customers received a net financial profit since the company was founded in 1989. However, if design and prototype expenses are considered as part of the customer's expenses for determining net financial profit under the AIPA, the number of customers who received a net financial profit over the company's history is twelve (12)."

See http://www.davison54.com/disclosures/aipa.php. So since 1989 and the Davison's inception, 12 customers have made more than they paid to Davison. But we do not know the total number of clients since inception since the number of customers reported pertains only to the last FIVE years. However, if we for sake of discussion divide 12 by 36,954, we come up with a whooping 0.03% success rate or 1 in over 3000. And we can conclude the real number is much worse since Davison must have had a few clients from 1989 through much of 2001. Actually, Davison makes InventHelp look good. By the way, I welcome comments from Davison as well.

Why do I think the success rates for these companies are so low. Perhaps I will comment in a future post. However, as I stated above, I would really like to have someone from Davison and someone from InventHelp post explanations as comments to this post.

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Monday, December 11, 2006

Will Individual Inventors Lack the Capacity to Enforce their Patents?

On August 3, 2006, Senators Orrin Hatch (R-UT) and Patrick Leahy (D-VT) introduced Senate Bill 3818, the Patent Reform Act of 2006. Although it remains to be seen what effect a Democrat-controlled House and Senate will have on the bill's progress, recent discussion has arisen regarding what effect the fee-shiting provision of the bill would have on individual inventors (see Dennis Crouch's "Patently O" patent law blog article at http://www.patentlyo.com/patent/2006/12/ipo_supports_at.html).

If passed, federal law governing the distribution of attorney's fees in a patent infringment lawsuit would change. Currently, the federal law governing attorney's fees states that a court "may" award attorney's fees, but only in "exceptional cases." The bill would change the language to requiring a court to award attorneys to the previaling party ("The court shall award, to a prevailing party, fees and otther expenses...").

Why does this matter? Well, this practice may enable deep-pocket defendants to bully indvidual inventor plaintiffs. Essentially, the argument is as follows:

Little Inventor wants to sue Big Infringer, but doesn't have the money to fund litigation. Today, a law firm may take such a case on a contingency basis (a percentage of any settlement or judgment received), financing the litigation costs out of it's own pockets. In this scenario, although Little Inventor only receives a portion of what he is actually due, with the rest going to the law firm, he is able to receive some of the compensation that Big Infringer has essentially stolen from him. Plus, simply filing a lawsuit many times increases the chances for settlement.

If Senate Bill 3818 were to pass, patent litigation firms may be less likely to represent Little Inventor on a contingency basis due to the increased risk of paying opposing counsel's fees. When Big Infringer gets sued, Big Infringer can easily run attorney's fees up in excess of $1M, (between 2 large companies battling over a patent, attorneys' fees can easily be in the $10M or even $100M+ range). $1M+ is a huge liability for a law firm to take on, especially given the unpredictability of judgments in patent infringment cases. Therefore, if passed, the new Senate bill may kill the ability for any Little Inventor to take on a Big Infringer. Result? Chalk up one more win for Corporate America.

However, all is not lost at this point. First, Senate Bill 3818 is simply that - a bill. It is not law, and with the change of committe chairs from Republican to Democrat, the direction of congressional laws may shift from a pro-corporation stance to a pro-individual inventor stance. This means the bill may be amedend prior to passage, or killed altogether before a vote is taken. Additionally, other options such as insurance have been discussed. Under this scenario, it is possible that law firms would continue to take on contingency cases under the new law, but would purchase insurance to help cover the costs of any loss where attorney's fees were required.

Given the potential windfall for a lawfirm who takes on a patent infringement suit on a contingency basis, it is likely that some firms will see the upside as too good to pass up. Let's keep our collective fingers crossed. One thing I am certain of, however, is that even though this is my first blog article as Leyendecker & Lemire's new associate, it won't be my last blog article on this subject.

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Tuesday, December 05, 2006

Duracell or Not!!!


Our new associate was given a small gift of a desk clock from the University of Denver School of Law upon successful graduation: Hey, it's the least they can do after he gave them about $90,000 over three years. The clock has a thermometer and as such the clock has been repeatedly moved from office to office as we try to get the HVAC in our new office dialed in.

Anyhow, we began to question the temperature readings off of the clock. So I opened up the back to check the batteries. I was extremely surprised to find that the batteries were
Duracells as usually these types of gifts have no name powercells. But were they?





I turned around the batteries and they were not Duracell brand batteries! Can we say Trademark infringement, baby. Trademarks are not only words, logos, slogans but can also include distinctive nonfunctional product features (i.e. tradedress). Clearly, a black battery with a copper colored top is recognized all over the United States as a Duracell brand battery.

So folks keep it in mind that you can trademark your products tradedress as well as associated names, slogans and logos. And if someday, your mark is counterfeited by a no name company from the orient, consider your self lucky: they only steal from the best!


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My Top 10 Tips for Commercial Leases In Colorado Part 1

As you probably know from previous posts, we have recently moved and consequently negotiated and signed a new lease. It was one of those times where I get to sit on the other side of things and view things from a view that my clients usually get. It dawned on me that I should write a blog article about negotiating commercial real estate leases and some broad major things to pay attention to.

At the outset, I definately recommend having a lease reviewed by an attorney. Quite simply attorney’s who have reviewed leases before are in a lot better position to identify items that are not quite standard and can spot potential pitfalls that may cause issues down the line.

With that being said, let’s dive into the first 5 major issues you should be thinking about.

1) What Type of Lease is it?

First of all you need to determine what sort of lease and rental relationship you are dealing with. This will be a major factor in determining your rights and responsibilities as a tenant. The major types of leases are the following: Full Service Gross, Modified Gross, Net or Triple Net. While there really aren’t any strict guidelines as to determining what type of lease it is, there are some general. Basically a Full Service Gross price will include everything –ie landlord pays taxes, insurance, utilities and provides. Modified Gross will usually include most of the above, but may not include janitorial or the tenant will pay some portion of the utilities. Triple Net is the other end of the spectrum, in which the tenant pays their share of the landlord’s taxes, insurance, utilities, and maintenance on the building. Everything else being equal (location, quality of building, square footage etc.), for the same amount of base rent a Full Service Gross lease will be a better deal than a Triple net Lease.

2) Personal Guarantees.

This is often one of the biggest sticking points between tenant’s and landlords. From the tenant perspective I would suggest that you try to avoid a personal guarantee if at all possible. By personally guaranteeing an obligation of the company, you are basically doing an end around the liability shield that a Corporation, LLC, or LLLP create for the owners of the entity. If the landlord stands firm on their request, there are some strategies that can be employed to reduce the time the guarantee is in effect.

3) Insurance.

Insurance requirements are a big one that business owners often overlook. Attention needs to be paid to what types of insurance are required and the amounts of coverage. You don’t want to get in trouble by binding yourself the insurance that you don’t have or can’t afford. Not having the appropriate insurance coverage and supplying the landlord with the appropriate documentation could violate your lease and make you in breach. Landlords usually will negotiate on this point.

4) Landlords Right to Relocate Tenant.

These provisions show up from time to time in leases. Basically it allows the Landlord to relocate your business to a “comparable” location in the same building/complex. Several questions arise such as what is a comparable space? If the new space is larger does your rent increase (this could be a big deal if you could barely afford the place in the first instance)? If the space is smaller does your rent decrease? And what happens if the new space does not meet your needs? Careful consideration of these provisions may be crucial for your business (e.g. retail space) – especially if you have clients or the public regularly visiting your place of business.

5) Expense Stops

Expense stops are also common with Full Service Gross and Modified Gross leases. Basically, the concept is that tenants will be responsible for a pro rata share of any increases in the expenses to maintain the building and any common areas, and will be assessed the amounts as extra rent. Special attention should be paid to these sections, as they have the potential of increasing the amount you pay per month in the future.

Well that’s it for now, I will discuss the other 5 tips in a future post.