Tuesday, August 14, 2007

I was right.

Way back on April 19th of this year, I wrote about the potential for patent reform occuring this year, and stating my case for why I was against it (http://www.lld-law.com/2007/04/will-patent-reform-occur-this-year.html#links). Recently, the Wall Street Journal ran a commentary article on the Patent Reform Act of 2007. Although I missed this article, I was lucky enough to see the responses the article generated in the letters to the editor section that was published in today's (8/14/07) Journal.

I'm not sure if it was my blog article which paved the way for these reponses or not (I'd like to think it was), but thier sentiments echoed much of what I wrote about in my original article 4 months ago. For instance, David P. Vandagriff, the VP of IP for Helius, Inc. (www.helius.com), an IP broadcasting company, noted how interesting it was that the medical industry, universities, and most venture capitalists are all opposed to the act, which was somthing I mentioned four months ago. Mr. Vadagriff goes on to echo what I stated in April - saying "this reform bill is the brainchild of a small group of very large computer technology companies including Microsoft, Intel, and Oracle. It is not coincidental that each of these companies has been a defendant in an antitrust suit. They rely upon market power to maintain their dominant positions and are serial patent infingers."

I don't mention this article simply to show my view is commonly held. I'm writing this blog article becuase this Act is not going away unless you, the individual inventor, the small company with great IP, or just a member of the the general public who doens't want big business to win dirty yet again, contact your representative or senator and tell him or her why you DON'T want this bill to be passed. If we don't get this bill killed, the US patent system will essentially be "run" by the biggest technology companies on the planet.

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Wednesday, August 08, 2007

Is InventSAI breaking the law?

The post is wholly one attorney's opinion and in no way states the opinion of the firm, or attempts to establish any facts.

Today I learned that an Invention Promotion Company, InventSAI, may not be fulfilling their required duty, by law, of disclosing the profitability of companies using their services. In fact, there appears to be a question as to whether The InventSAI Network, LLC is violating not only the the letter but also the spirit of the Amercian Inventors Protection Act of 1999 (the "Act").

Under the Act, whose full text can be seen at http://www.uspto.gov/web/offices/com/speeches/s1948gb1.pdf, an invention promoter or an invention promotion firm must disclose specific information regarding their past business practices. These mandatory disclosures are required by law. Specifically, invention promotion companies are required to provide "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."

InventSAI states "An exact number of inventors commercializing their inventions can only be estimated because InventSAI clients are not obligated to disclose financial data. Nevertheless, based upon client feedback, of the 815 total InventSAI clients contracting for commercialization services, at least 152 have reported commercial success with hundreds of cases still active." Thier online post can be seen here: http://www.inventsai.com/AIPA.html

The law requires InventSAI to disclose "the total number of customers known... to have received a net financial profit.". It appears InventSAI is playing the ostrich game - what I don't "know", I don't have to disclose. However, I read the law differently. The law requires InventSAI to disclose "known" profitably customers. InventSAI by its own admission does not know of any net profitable customer since its customers "financial data" is not disclosed. Therefore, under my estimation, InventSAI is required, by law, to state it knows of zero profitable companies that have used its services.

Moreoever, stating that "at least 152 [customers] have reported commecial success" is misleading and potentially dishonest. If InventSAI does not know their customer's financial data, how can they know if they're commercially successful? I'd like to know what InventSAI's definition of commercial success is. Moreover, by simply providing "commercial succes" data as opposed to "net financial profit" data, InventSAI seems to simply be providing data they want to provide, instead of the data they are REQUIRED to provide, by law.

WHAT ARE THEY HIDING? I welcome a phone call from InventSAI to explain thier position and why they feel they can get around this law in this manner.

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Monday, August 06, 2007

DAVISON ROCKS!!!

OK, for thos of you who don't know me by now should realize that I'm sarcastic. Hence, the title of this blog article.

Addtionally, it would be remiss of me if I failed to say sorry. I'm sorry that we've been absent from posting any recent blogs - I suppose the summer blog malaise started to seep as the temperature outisde started to push 100 degrees on a daily basis. So, although this new blog article is waaaaayyyyy overdue, in the hopes of kicking off a new blogging season with the type of article we wish we did not have to post, but feel it is our job to so do...

Once again, an invention promotion company has reared its ugly head to show us just how inept they actually are. As our blog articles on InventHelp and Advent Product Development disclosed their inability to create profit for their clients, Davison's own website (http://www.davison54.com/disclosures/disclosure.php) states the same thing. Here's what Davison tells us about themselves:

(1) 41,128 consumers signed licensing agreements and purchased research services from Davison in the last 5 years.
(2) 11,598 consumers purchsed product design services from Davison.
(3) Of these, "THE TOTAL OF CONSUMERS IN THE LAST 5 YEARS WHO MADE MORE MONEY IN ROYALTIES THAN THEY PAID, IN TOTAL, UNDER ANY AND ALL AGREEMENTS TO DAVISON, IS EIGHT(8)."

So, you have about a .0002% chance at making money with Davison if you purchase their research services. That means, that about 2 out of every 10,000 people who purchase these services with Davison make more money on their product than they spend with Davison. And if you spend the big bucks with Davison and purchase product design services your chances at makign money with them go up to a whopping .0007%. Or, about 7 out of every 10,000 people who contract Davison to help design their product make more money off of their product than they spent with Davison. So, if you're thinking of using Davison, my suggestion would be for you to play the lottery instead. They appear to have better odds: http://www.coloradolottery.com/games/scratch/featured.cfm?FeaturedGameID=101 (please note sarcasm statement at beginning of post).

Oh, and one more thing. Davison also states "THE PERCENTAGE OF DAVISON'S INCOME THAT CAME FROM ROYALTIES PAID ON LICENSES OF CONSUMERS' PRODUCTS IS .001%." This means that for every $1 Davison makes from licensing a product submitted to it, Davison is making $1000 off of the people submitting the products.

Numbers don't lie - and these are Davison's own numbers! As we suggst to our clients, do not use these companies - you are more likely to succeed if you are willing to put in the effort yourself and use reputable marketing and manufacturing organizations, while protecting yourself legally along the way. Contact Leyendecker and Lemire (www.coloradoiplaw.com) and we can steer you in the right direction.

Numbers are current as of June 30, 2007.

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Monday, May 14, 2007

Business Method Patents - Are they worth it?

Good Question.

A recent article in the ABA Journal by Steve Seidenberg discusses the most recent group of business method patents to hit the PTO - tax patents. These patents cover useful, unique and nonobvious implementations of the tax law. Mr. Seidenberg's article takes on an anti-tax patent strategy theme in discussing whether tax patents in particular and legal strategy patents in general should be valid, mentioning that Congress may be changing the law to limit tax patents.

This got me thinking about business method patents ine general and whether they were worth the cost, given recent decisions by the Supreme Court. At Leyendecker & Lemire, we charge at least 25% more for business method patents, and one reason for doing so is to ensure that we take into account recent changes in the law so that your patent is as broad as legally possible, and sill retaining the likelihood your patent will issue.

The question to ask yourself is whether it's worth it for you (an individual or small company) to protect your unique way of doing business - be that providing tax services or otherwise? Well, maybe. Like other patentable areas, and likely more imprtant in the business method arena, you need to ask yourself how great your idea is as compared to what's currently being done by your competitors? Does your idea give you a competitive advantage over other persons providing similar services and products such that you will can forsee obtaining a return on your patent investment which is higher than the cost of the patent? As discussed on our new website www.coloradoiplaw.com, the answer to these questions ultimately come to whether you have the perseverence to see your idea to patent issuance and to subsequently enforce any patent that may issue. Although this process may cost more with a business method patent, the reward can be just as great or greater - allowing you to provide your unique service that no one else can provide.

If you can answer these questions positively, then you have what it takes to see your business method idea through to the end and should contact our office.

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Tuesday, December 12, 2006

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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Monday, November 27, 2006

Sweet & Low

In Sunday's Denver Post, Al Lewis wrote a column about Rich Cohen, the grandson of the inventor of Sweet & Low and his book about his family. The article is a book review of sorts of Cohen's book about his disfunctional family that disinherited his mother and her children. But the point of this post relates not to the topic of the article or the book but rather a particular statement made in the article.

Apparently, Benjamin Eisenstadt, Cohen's grandfather, invented the sugar packet in 1945. According to the article and the book, "Eisenstadt brought the idea to Domino Sugar, which promptly stole it." It is this quote that is the point of my article.

As best I can tell, Mr. Eisenstadt never patented the sugar packet and as such had no legal claim to the intellectual property related to the sugar packet. Simply, Domino Sugar could not have stolen his idea, because Mr. Eisenstadt did not own it. The only effective way to own the sugar packet invention would have been to patent it. Since he did not, once he disclosed it to the public he dedicated the invention to the public (the one year grace period notwithstanding). Domino Sugar could not have stolen the sugar packet. More correctly stated, Mr. Eisenstadt freely gave the invention to Domino Sugar.

The point of this post is instructive: think long and hard about approaching a company with your invention if you have not taken the proper steps to protect yourself. Learn from Mr. Eisenstadt's example. Her certainly did. He patented the formula for Sweet & Low and the result was the Sweet & Low fortune that ultimately prompted Mr. Cohen to write his tell all book. Hopefully, when you make your riches, your family will not fall apart the way Mr. Eisenstadt's family did.

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Friday, May 19, 2006

American Inventor Season 1 Final Post

Well it’s all over. Congratulations to Erik Thompson, Francisco Patino, Ed Hall and the winner of the whole enchilada - Janusz Liberkowski. The host seemed to hint that there was going to be a next season. Hopefully, in the down time they will make some improvements to make it a show of more substance and potentially tap into the great learning tool the show could be for the American public. As for Janusz and the spherical safety seat we will see what happens. As previously discussed, I still have serious doubts as to whether the product will ever make it to market due to the web of government regulation and laws surrounding child safety – but I have been know to be wrong on an occasion. Maybe I will be wrong and it will be the next great American Invention.

So if you found our little blog due to your interest in American Inventor, please check out the other articles – they are packed with a lot of useful information and interesting topics. Also you can follow the links to our website where we have a ton more information on things ranging from patents, trademarks, copyrights, entertainment law and business matters. And by all means if the entrepreneurial spirit takes a hold of you – give us a call and we can help you on the legal end of things.

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Thursday, May 11, 2006

My Final American Inventor Post

I hate to say it but our Blog might as well be entitled the American Inventor blog. It seems that Pete and I have written about nothing else for the past two months. We have to dispense words of wisdom to our readers in our posts but nonetheless I will be glad to get back to other topics.

In some respects I feel dirty: we let ourselves be dragged into commenting on what has to be one of the worst shows on TV today: I really do not expect to to be back. Peter Jones and Simon Crowell wouldn't have even made it past the first round of "American TV Producer" if a similar show existed concerning television shows. Perhaps the problem is both of these gentlemen are not from this country and they have sorely underestimated the sophistication of the natural target audience for this show.

Instead of making a show that was both entertaining and informative they decided to pander to the low common denominators: emotion and poverty. What does it matter how good the inventor feels his/her invention is or the financial difficulties that the inventor has suffered. For one to be named the American Inventor, the quality of the invention is all that matters.

We have talked to two American Inventors as chronicled here. I will tell you that the show does not do them justice. They are much more complex, savvy and intelligent then the show makes them out to be. They actually told the contestants to play up their poor financial situations. At least one we know of was not comfortable doing so.

Anyhow, tonight is the finale and I like all four finalists. Truly the show does them a disservice. Anyhow, may the best man win!

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Wednesday, May 10, 2006

American Inventor Heard From Again !

Lo and behold I arrived to my office yesterday morning and had a message from American Inventor Eric Thompson – the inventor of the receivers vest. From the beginning I thought he has a great combination of the inventor spirit and pure passion and confidence that it takes to win the competition.

Anyway, he was calling to encourage people to vote for him on thursday and to offer to talk about his experience thus far on the show. We were able to connect later in the day Monday and were able to speak Erik for a few minutes about his experience so far with the show and what's going on with him in general.

One of the most interesting aspects of the conversation was how much of a business sense that Erik has about him as well as a keen awareness of the other issues out there surrounding inventors and bringing a product to market. As with our discussions with Mark Martinez, it was apparent that the ABC show doesn’t really start to scratch the surface as to the real qualifications and personalities of the featured inventors. I learned that Erik has actually invented at least eight other products prior to the receivers training vest. As with Mark Martinez, the exposure has apparently been good and Erik is receiving a lot of interest in his other products. Additionally, the conversation seemed to support our theory that ABC doesn’t seem to be doing much in the way of patent searching to screen out the candidates. While, as we have previously discussed on the blog, you don’t need a patent to make and sell a product in certain circumstances, such as the case of an individual inventor, they certainly can be a valuable asset. However, with the name recognition of American Inventor and the supposed resources they will be throwing at the chosen product, they could probably do a successful first to market strategy - we'll have to stay tuned to see how it goes. More than likely, the scenario that could actually play a factor in the American Inventor contest is whether or not the product actually infringes on a patent that already exists. Erik seemed to have a good grasp of the different aspects of patenting and while he said that the decision as to whether the receiver’s vest will ultimately be patented us unknown (as is up to the show), he personally takes a strategic view and often chooses for a first to market strategy. I definitely think that the First to Market vs. Patent debate would have been a very beneficial topic for ABC to have at least minimally addressed and the pro’s and con’s of each.

The other interesting aspect seemed to be that the producers of the show are keeping the contestants in the dark about what is going on. At the time we spoke Erik had no idea what was going to happen on Thursday’s final episode. An interesting aspect of our conversation was the actual camaraderie that seemed to exist between the contestants. Erik mentioned that he really got along with Mark Martinez and Sheryl McDonald and the other people in his “team” as the shows producers called them. It was only later that the contestants found out that they were actually competing with their “team mates”.

Anyway, it was a pleasure to talk to Erik and we wish him the best of luck. He has setup a website for fan registration and a personal video message. As for any of the other contestants on the show - feel free to give us a call and we would be more than happy to discuss your experience.

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Friday, May 05, 2006

How A Product That Could Win American Inventor Could Possibly Never Make It To Market.

Kurt and I were talking the other day about the American Inventor series and how we had hoped that it was going to a bit more of a “how to” or a bit more educational for inventors or at minimum illustrate the types of issues inventors should be looking at when bringing their inventions to market. The reality is that getting a working prototype is merely the beginning – there are issues of intellectual property rights (most likely patent, and trademark), there are market and pricing issues and there are other challenges such as government and/or other sanctioning body regulation. The last issue is the one that I think ultimately dooms one of the final 4 contestants and is a point that has not been brought up on the show.

If you have watched the show, you undoubtedly are familiar with Janusz Liberkowski. His invention is the Spherical Child Safety seat and was inspired by the tragic death of his daughter some 7 years ago. The invention is a personal favorite of Kurt’s and I personally think its pretty cool too – the physics behind it make sense. However, even if he wins, I do not believe that the product will ever make it to market. Why, you may ask? Quite simply it comes down to government regulation.

Automobiles safety systems and child systems in particular are regulated by a huge body of federal and state regulations. 49 CFR 571 governs child safety seats and every state has its own laws concerning the placement and use of child safety seats. The one that jumped out at me first is that the car seat positions the infant in a forward facing manner. If we take Colorado as an example, the use of child safety seats is governed by CRS 42-4-236, which states in part “if a child is less than 1 year and weighs less than 20 pounds, the child shall be properly restrained in a rear facing child restraint system.” The issue here is that Janusz’s car seat has the infant facing forward. Additionally, all of the tests that they conducted concerning the safety of the seat were conducted with the infant facing forward. I assume that the laws of the other 49 states mirror the same conventional wisdom. Mr. Janusz is in the situation that his design, while it may actually be safer than the other products on the market may actually be illegal to sell and use because the states have all codified their own laws requiring an infant to be rear facing. Therefore, he is not only going to have to persuade the public to change their views on child safety, but his is most likely going to have to change 50 state laws and potentially federal government regulations for his product to go to market and be legally used by consumers.

This situation reminded me of a popular science article I read a while back. I was able to find the article from 2002 concerning a radical new style of car seat that was designed to work in the front seat of a car equipped with air bags. The seat was designed by Xportation Safety Concepts, Inc., which also happened to be a Colorado corporation. The company’s rationale was that studies had shown that locating the infant seat in the back seat was distracting to drivers, which may actually increase the risk of an accident. Therefore, they designed a rear facing car seat that will actually work with airbags. Immediately, the product received both support and opposition concerning the concept. Some of the people who didn’t want the laws and regulations changed stated that we have been telling people that kids need to go into the back seat for so long that they didn’t now want to make exceptions to that and possibly send a “mixed message”. This shows the resistance in this area to new or revolutionary product ideas or designs. Xportation petitioned the Department of Transportation to amend the air bag warning requirements, however the National Highway Traffic Safety Administration, denied the request. Sadly it seems from the brief amount of research I did, that Xportation has faded into the sunset. Their Colorado corporate filing have lapsed, their web site is gone and I could not find a reference to them on the web any later than 2003. If anybody knows anything else about the company please let me know and I will update the article. Regardless, it is an illustration of how an invention could be revolutionary and potentially beneficial to society, but it never sees the light of day due to a variety of reasons – government red tape being one of them.

If Mr. Janusz does win the competition, he will either need to change the invention to meet current laws and safety standards, if that is even possible, or embark on a nation-wide crusade to change federal law and the laws of all 50 states. Given his deep personal commitment to the design, he may view it as the perfect way to spend his $1 million in royalties. The question is whether the show is willing to wait potentially years to go to market with the product. Only time will tell as to whether his car seat saves the world or is reduced to the long list of other products killed by the bureaucratic machine.

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Saturday, April 29, 2006

American Inventor - A Conversation with Mark Martinez

You will notice that I did not provide live commentary for last Thursday's episode of American Inventor. Why? Several reasons: first, I a becoming more and more disillusioned with the show. We just do not get the whole story of what is going on. In short, I have it on reliable information from and about clients of the firm that participated in the show (but never made it on the air) that there are other audition rounds and elimination rounds outside of those that were aired.

Case in point, in Denver an inventor with off-road inline skates was passed to the second round, BUT for one reason or another he never made the second round. And how about numerous contestants that won a place in the second round that were never seen again. What happened to them? There most have been secret unbroadcast elimination rounds. What was the criteria and basis for these elimination rounds? Will we ever know?

And then there is the complete failure to address anything relating to the protectability of the inventions or whether the inventions have been invented before. Peter Lemire suggested to me that perhaps the show doesn't care about patents because they know that patent or not they can produce and sell the product and make millions just based on the promotion for the winning invention. This is probably true but the reality is for the gross majority of inventors, who have not had their inventions promoted week after week on a national television show, their only chance at success against more well heeled competitors is a patent. You would think that the show would endeavor to inform and help the inventing public by giving them pointers and such on how to do things right, BUT I suspect the producers really don't care about anything but ratings maximization.

Enough ranting...

I was really glad to see the dual traction bike advance to the next round. I believe it beats the Receiver's Training pole if only because of its broader appeal. It would probably sell well in an infomercial to be later transitioned to toy stores and national retailers, such as Wal-Mart.

Anyhow, I received a call Friday. I didn't immediately realize who it was. He was talking a mile a minute and was obviously very excited. He mentioned his name was Martinez, but that did not ring any bells as I have at least one client with that surname and have had consultations with several Martinez’s. But then something he said clicked in my brain and I realized it was none other than Mark Martinez of the Sackmaster 2000.

I will not reveal specifics about he told me because I imagine that he is still under a confidentiality agreement with ABC and the show but I can say he wanted to give his side of things concerning what really happened and how he was portrayed on the show. SUFFICE IT TO SAY: everything you see on a reality show is not in fact REALITY. Things are presented certain ways through editing and only telling part of the storing that can drastically change how a person, such as Mark, appears to the TV watching public. To a large extend this appears to have happened to Mark.

Anyhow, based on my conversation Mark Martinez seems to be a good if not great guy. I have had people call me or email as a result of a blog articles I have written about them, their company or their products and just spew anger and hatred.

I might have suspected that of Mark considering how critical I have been of him in my posts. BUT Mark just wanted to give his side of the story and didn't appear to be at all angry with me. I don't know if I would have been as civil and genteel as Mark if the situation was reversed. So kudos to Mr. Martinez's high character.

I did ask Mr. Martinez how things have been going since the show, and he told me the phone is ringing off the hook. So good luck to you, Mr. Martinez. I hope to hear that you have made millions for you and your family in the coming years and that the Sackmaster 2000 has helped save lives and property as you hope it will.

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Thursday, April 20, 2006

The First Three Finalists LIVE COMMENTARY

Mark Martinez (sackmaster 2000): He is not going anywhere. He refuses to listen to professionals that can help redesign his invention. Short sightedness will kill an inventor. Succeeding is often knowing when to let go and lets others take your vision and remold it as necessary. He lost when he fired the Designers and spent some of the 50k on a suit. How would you feel if someone you invested in spent some of the money you gave him/her on himself or herself?

Erik Thompson (Receivers Training Device): I don't know about this products potential. I think it can sell well to a small consumer base but it probably is not the Great American Invention. Nevertheless, I really like this guy's drive and attitude bith concerning his invention and his dedication to convincing inner city kids go to college. And he doesn't whine! IF personality was the primary consideration this guy should win this round if not the whole thing. Frankly, even if he loses, there will be plenty of people willing to invest in him and his product.

Sheryl McDonald (un-brella): I like the invention but the design may need more work. Sheryl doesn't have the same drive as Erik and although her invention has greater potential than Erik's I think Erik will win this round in a squeeker.

We will see in about 25 minutes....

UPDATE: The winner is ERIK!!!! I called the first one, but I am realistic and I don't expect to go four for four. Erik won't win the million (the invention just does not have the mass appeal) but I suspect in the end nothing will keep this great competitor in like down.

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Wednesday, April 19, 2006

American Whiner

Well after weeks of watching, I thought I should chime in on the American Inventor escapade. Additionally since I will be commenting a lot on last weeks double episode, I figured I should post it before this week’s episode airs (sorry I’ve been a bit busy this week). Sadly, I have become a bit disillusioned with the whole thing – the idea seemed really cool – but the reality has proven to be less then spectacular. As Kurt has already commented on the producers do not seem to really be concerned as to whether the “inventions” are truly novel or can be protected. While you do not need a patent to sell a product in the market place, you need one if you want to prevent competition from coming in and selling the exact same product. If I was going to pay someone a $1,000,000.00 advance on royalties, I would make damn sure that no one else was going to be able to copy the product 6 months after we go to market. In fact, the #1 watchers of American Inventor should be R&D people for major corporations – I’d be looking for ideas that we could pick off (because they are not eligible for protection, or they are not protected) and flood the market with the goods as soon as possible.

The second and possibly most annoying aspect of the show is that it has degraded into this whine fest about which contestant has the best sob story to tell. After watching the 1 minute presentations and then the personal statements I was about ready to chuck my TV out of the window! I mean come on - is this what America has degraded into – that these people believe that they should be the winner not because their invention will revolutionize the world, save lives, or make life truly better for people– but because they are penniless and all they have left is a dream?! These people don’t need to win - they need counseling – or possibly My Therapy Buddy!!! I have to tell you folks but thousands and thousands of people are in the same boat. Over 80% of all businesses fail in their first year and you can bet your house that all of those people gave it everything they had. Probably 1 in 4 of the companies I form for clients in a given year will go belly up by the end of that year. Tons of people out there put everything on the line and loose. Did anyone notice that 25% of the semifinalists were essentially destitute – one lady even brought in her last unemployment check! This pandering to the lowest common denominator is not what I expected when I first heard of the concept for the show.

The other interesting observation is that the inventors were really lousy at relaying why their product should be chosen as the best or would be the most successful in the market place. The most common answer was – “Because I believe in it”. Great, you believe in your product – so does everybody else who stood in line for hours trying to get onto the freaking show! How about providing basic market information concerning the industry your product is in – how many kids across the US play football and what is the dollar amount spent on football equipment each year, what’s the umbrella market doing these days, or on average how many women that have breast cancer actually loose their hair (and no its not all of them) and end up wearing wigs.

But I guess there is always hope. Hope that the contestants will get their acts together and stop playing the charity case, hope that the producers will give us a more in depth look at the process instead of the superficial crap we have been fed so far, and hope that America hasn’t degraded into a society that is just looking for a handout based on the best sob story. There’s always hope – but I’m not holding my breath. Call me cynical.

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Sunday, April 16, 2006

American Inventor - Why he shouldn't have received 50k

I am speaking of Mark Martinez, the man with the sand bag scooping apparatus. Frankly, I think his invention is one of the best of the final 12 BUT I wouldn't invest a dime in it.

Why? Simply, it isn't protected. Sure, Mr. Martinez has a patent but his patent will not prevent any serious competitor from essentially copying his invention without fear that they would lose an infringement suit.

You see, Mr Martinez's patent is a DESIGN PATENT. Design patent protect only the aesthetic aspects of an otherwise functional article. And here is the important part: when the functionality of a device merges with its aesthetics, the design patent drawn to the aesthetics is INVALID. This is precisely the case here!

So if a client came to me and asked me if he could make Mr. Martinez's invention legally without infringing the Martinez patent, I would tell him to change the look a little but not in a fashion that hinders the products functionality and he should be home free.

It is really a shame, because whether or not Mr. Martinez wins American Inventor, he would have had a significant amount of investor interest and more importantly investment following the show IF he had a good quality utility patent. Instead with no real patent protection, no serious investor will give him a dime.

Who is to blame? I wonder if his patent attorney told him about the negative aspects of design patents. Perhaps, he did, but the design patent route was chosen because of its low cost relative to a utility patent.

Please understand the following comments are not directed at Mr. Martinez's attorney: I don't know anything about him, and would not presume to draw any negative conclusions about this particular attorney.

No matter Mr. Martinez's attorney's actions, many patent attorneys improperly sell design patents as a cheap alternative to utility patents. Historically many of these patent attorneys have been associated with Invention Promotion Companies. They are more concerned with keeping the invention promotion companies happy rather than advising the client/inventor what was in the best interests of the client.

Frankly, if you ask me, attorneys and agents that don't act in the best interests of their clients by fully informing them of the limited scope of protection should be disbarred.

In the next installment, I will comment on the patent protection held by another finalist. Here is a hint: he has a utility patent but the claim protection is so narrow that designing around the device would be a piece of cake. In fact, I suspect the redesign that results from spending the 50k may not even read upon his own patent.

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Thursday, March 30, 2006

This Week's installment of American Inventor Commentary

The thing missing on American Inventor or at least the segments broadcast is any discussion of the patentability of the inventions. Many of the inventions that have got through to the second round are just not patentable.

And the producers of the show are not going to give a one million dollar advance on royalties to an invention that cannot be protected. Why? Because if the invention is not protectable, any number of competitors will simply copy the device potentially undercutting the manufacturer chosen by the producers.

Actually, I shouldn't be so harsh; there is a chance that an unprotectable invention can be successful. But the chances are just so much smaller than with an invention that can be protected with a strong broad patent.

The panel of judges just don't seem to get the importance of protection. Tonight a nice old lady with paper sheets was passed on to the next round. I would be shocked if the product or the method of using the product could be protected. I suspect with a few minutes or the help of my expert patent searcher I could show that a significant portion of the inventions that advanced to the next round over the last three weeks are not even novel. In other words, they were likely invented by others before the new inventors decided to appear on the show.

What the show needs is a patent attorney judge to render an opinion on the protectability of the inventions. I really expected to see one among the panel. Instead they appear to have a businessman, a couple of marketing types, and a very successfully inventor/engineer. While Doug Hall, the inventor, comes close to filling the role an attorney would fill, he isn't a patent attorney and he just doesn't approach the decision of who to pass the same way a patent attorney would.

So Simon, if you by some strange coincidence you come to read this, I am available ;>)

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Thursday, March 23, 2006

American Inventor Take III - the thin line

Tonight there was one inventor featured in Chicago that had spent the last 26 years working on and promoting his invention, bulletball. 26 YEARS! And the invention a sort of cross between ping pong and knock hockey just wasn't that good. 26 YEARS!! He had quit his job; ruined at least one marriage; and lost his house.

What is even sadder than this guy's story is that it is all too common. I have known inventors who have spent everything they had chasing the dream. There is a fine line between the dedication and devotion needed to make an invention successful in the marketplace and going so far that you lose sight of all other aspects of one's life.

The one thing to always keep in mind is that an invention should merely be a means for an inventor to enhance his/her life not destroy it and often when an invention gets in the way of what's really important it should often be sidelined.

If your spouse is against spending tens of thousands of dollars on an invention; the question you must ask is this invention worth ruining my marriage over? By the way, marriages fall apart over these kind of things all to often.

Some inventors spend so much on their inventions, such as Mr. Bulletball above, that they will live in virtual poverty for extremely long periods of time. Even if they eventually make it, is a few years of wealth worth the years of poverty? Remember life is finite, no inventor should put all aspects of his/her life on hold to blindly devote everything to his/her invention.

I guess this brings me to my next bit of advice: enjoy the journey. So often we look exclusively to the future and the rewards that await us then and are out of reach in the present. Inventors are, of course, famous for this always planning for and searching out the next big break. And the sad truth is that in most cases the inventions will never be successful.

I do not suggest that inventors do not plan for the future. In fact, failing to plan is a recipe for disaster. However, inventors should reveal and take great joy in the journey and the mini successes along the way. When you first conceive the invention, revel in it. When you built the first prototype sit back and congratulate yourself. When the patent application is filed, go out to dinner and celebrate. When the patent issues, throw a party. When you get in to see a representative from a major company you would like to license your invention, realize that you have made it further than most inventors in just getting the meeting.

And perhaps most importantly, know when to say its over and let it go. Also realize that with ultimate failure, the process need not be so. You will have learned so much that can be applied later in life to the next great idea. The knowledge gained from the process can far outweigh the ultimate failure. Believe me, I have been there and done that.

In the early nineties, I founded a Mountain Bike component company built around a handlebar of my unique design. Luckily, I was single at the time so that I did not have to worry about family time and family finances. In the end, everything fell apart and I walked away owning almost nothing more than the shirt on my back. Some might be inclined to think the three years I pursued this venture was ultimately wasted. But the knowledge and experience gained during those three years has made me the person I am today.

For example, many people fear starting their own businesses because of the uncertainty in contrast to a regular paycheck and because of this they never follow their dream. I have not such fear; I have been to the bottom and while not particularly fun, it wasn't as bad as fear would lead you to believe. I know more about the practical side of startup businesses and bootstrapping than your typical MBA graduate. In short, my experiences in the early nineties have helped make my practice successful today. Always keep in mind failure can be the manure from which success grows (wow what a terrible metaphor).

So to end: Chase you dream but do smartly and try to enjoy the chase along the way.

Till next time...

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Thursday, March 16, 2006

American Inventor Take II

Yeah, I am watching the show. After all, I am a patent attorney. Hokey show? Sure, but strangely enjoyable. Hopefully, the show will inspire those on the sidelines to create and go for their dreams. After all, many of you can do better than many of these inventions.

One moment I would like to highlight was where the engineer/inventor judge told the African American inventor that her invention already existed. She informed the judges they she spent over $12,000 on the invention with one of those companies that advertise on late night TV and have an 800 number. All she got from the experience was a book (I have seen many of these books and they are essentially worthless) and a narrow patent. The engineer inventor basically told that those companies steal from people.

While I cannot definitively say these companies steal from people, I will say they give you very little for the huge sums of money. I will reiterate do not use invention promotion companies if you truly believe in your invention. I will not name names here, but if the company advertises on late night or low budget TV or the radio avoid them. If the company uses buzz words like "we will submit your invention to industry", avoid them. If they make the whole process seem easy, avoid them.

Enough said. Good Night!

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Tuesday, March 14, 2006

PATENT TROLLS!

The Denver Post had an article this past Sunday discussing the fearsome “patent troll” (you may want to read the article before proceeding). Apparently, a Patent Troll is anyone who (i) had a great idea, (ii) reduced the invention to practice, (iii) filed a patent application, (iv) received a valid United States Patent, and then (v) had the gall to request a giant multi-national company to pay for the right to use the invention. Oh, how terrible.

Doesn’t the enterprising, entrepreneurial, forward thinking and intelligent independent inventor know better than to THINK about how to solve problems that confront business, society and industry! How dare they?! After all this is AMERICA and how can we permit the small guy (or gal) to be on a level playing field with the multi-national corporation!

Is it really fair that one person (or a small group), who beat out a huge corporation with thousands of engineers and designers and a multimillion dollar R&D budget in resolving a problem of at least some significance (as evidenced by the fact the huge corporation saw fit to implement the invention), expects to derive a little wealth from his (her) ingenuity? Don’t these trolls realize that the multimillion dollar salaries are reserved for upstanding corporate CEOs that include such pillars of community as Ken Lay, Joe Naccio and Jeffery Skilling in their ranks?

This is AMERICA! We can’t expect the huge corporations to compete with the pitiful little troll. It’s like asking dinosaurs to compete against tiny pesky mammalian rodents. It’s like asking the King to grant independence to a bunch of silly men dressed as Native Americans parading around Boston Harbor drinking coffee instead of tea. It’s like allowing a few hundred ungrateful students to gather in a far eastern square and protest the oppressive policies of their government. IF these trolls are permitted to continue, what will become of this Nation?

(Huge Corporation): NOT FAIR, NOT FAIR, NOT FAIR! And if you don’t do as I want, I am going to shower Washington with hundreds of high paid lobbyists, I am going fill the campaign coffers of all the congressman and women I can buy, and I am going to wage a vicious PR campaign to paint you as Beelzebub’s minion and me as God’s angelic right hand. We must stifle competition at all costs!

And is this the one sided fight where David is killing the poor hapless Goliath. Not on your life! Some of the very corporations that complain about trolls are some of the biggest players of the patent game. Do you think they think twice about squashing a start-up that is infringing one of their thousands of patents? You just don’t hear about it; the squashed and penniless cannot afford to pay their PR firm.

OK, my sarcastic rant is over. Time to get back to doing some work. Who knows maybe the very application I am working on is one that will bring a corporate giant to their knees. Viva La Troll!

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Sunday, February 26, 2006

Low Quality Service Providers, Part II

Last month I wrote about "low cost providers". This month I talk about an even more insidious provider, "the high priced charlatans". I mentioned in the previous article that below market pricing was a pretty good way of identifying patent practitioners that as a general rule provide low quality patent applications and associated services. The high priced charlatan is a bit more difficult to identify and that is what makes them so insidious: they sell you on high quality and charge a price commiserate with that of a high quality provider.

Luckily, I only know of one of these type of practitioners, so they may not be all that common. On the other hand it behooves you to be aware and completely question an attorney or agent before hiring him or her.

One good way to check on any attorney or agent before you hire him is google him or her. Look at least a few pages of results. Is there any indication the practitioner has been sued or disciplined by the Patent Office or his/her state bar? If so, move on. OR if the infraction doesn't seem so bad, make a note to ask the attorney or agent about it during an initial consultation.

Check inventor education sites, such as www.inventored.com, to see if there is any negative information about the agent or attorney. There are so many attorneys that are reputable: why take a risk that has negative material written about him/her by a credible source?

When you meet with an attorney ask him/her very pointed questions. Most people have trouble repeatedly and consistently misleading others. If you continue to ask hard difficult questions of your patent attorney to be; most unscrupulous operators will break or at least show the strain. Those that are quality operators will answer the questions without hesitation or concern. After all, good patent practitioners understand you are potentially spending a significant amount of money on the patent process and that you owe it to yourself to investigate the expenditure thoroughly.

What sort of questions should you ask? I am not going to get into those here. If interested, visit our website and check out the FAQs in the Patent Section to get an idea. There is one question you should ask that I will discuss here. And it may surprise you or at least the correct nature of the answer should surprise you.

The question: What do you think of my invention?

The answer should not be too positive, too giddy, too enthusiastic. Those of us that have been around the block in this business know that most of our clients will never make it rich from their inventions and that it is nearly impossible to predict which inventions are winners and which are not. So for a patent practitioner to come off as though your particular invention is the greatest thing since sliced bread is disingenuous and often smacks as dishonesty.

And their is no right answer to the question. Some attorneys will honestly tell you they like the idea. Others will refrain from giving their opinion. The key to the response should indicate how difficult the inventing game is and how much work and energy is typically required from an inventor to make a success of their invention. They may not say ii in so many words but it should be clear from their demeanor.

One final way to check out patent attorneys: check out their affiliations. For instance, our firm is a member of the Troubleshooter Referral List. If we mess up with our clients we could find ourselves being exposed on a daily national radio show. Honestly that reality doesn't worry me. Why? Because we make treat our clients the way they deserved to be treated: honestly and forthrightly. We will tell you the way we see and we will not pull punches. We are your advocates and fiduciaries and because of that it is our duty to put our self interests second to your interests at least in so much as it relates to our representation of you.

But I digress, I don't mean to imply that my affiliation is the only one of merit. To the contrary, there are undoubtedly plenty of others: just do your homework and there is no reason why you cannot identify a quality patent attorney to draft and procure a patent to your invention.

Next up in PART III, I will write about invention promotion companies as I have done numerous times before. And if I can stop one inventor from giving their money to these predators, well, then the forthcoming entry will be a success.

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Sunday, January 29, 2006

Low Quality Patent Service Providers, Part 1

A while back I promised to write an article about low quality patent providers or perhaps I should say patent providers that provide low quality patent applications and other services. Well, here is the first of which will likely become a series on the topic. This installment discusses the dreaded “low cost provider”.

The first point an inventor should consider is a simple one that is often lost in the process of shopping for a patent attorney (or agent): Patent applications are not commodities! A patent application written to your invention by one attorney can vary from very poor quality to excellent quality.

Patent application quality is an easy thing for an inventor to lose sight of when deciding who to hire. It is extremely difficult for someone who is not intimately familiar with the patent process to judge the quality of one patent practitioner’s work versus another. So what the inventor does is choose on one the few aspects of the process he/she understands: price.

In about 25-35% of all the calls I receive from inventors inquiring about obtaining a patent, the first question is “how much do you charge to prepare a patent application?”. I actually know at this point that I will not be drafting this person’s patent application. I am not a “low cost provider” and I have no interest in competing with “low cost providers”. I tell the prospective client the general range I charge for a typical application. Often, I explain to them that they can find other practitioners that will prepare their application for less but I also explain that by and large the quality of patent applications prepared by “low cost providers” are in my opinion very poor. Almost universally with price first inquiries my explanation has absolutely no effect. It is too bad really as they will still spend a significant amount of money with a “low cost provider” and they will probably end up with a weak and essentially useless patent that will be (i) very difficult if not impossible to license to a company and (ii) extremely easy for a competitor to design around.

I have had a few applications written by “low cost providers pass” through my office in the last year or so generally for me to respond to an office action rejecting most if not all the claims. The initial rejections are not uncommon and the “low cost provider” is not to blame for the rejection. However, in responding to a rejection, I often need to reference the application’s specification to refute an argument or contention made by the Patent Examiner. With many of the low cost provider applications, there just isn’t any depth to the specification leaving me with little to draw upon. The inventor should keep in mind that in the great majority of cases, I cannot fix the situation because that would require adding new matter to the application and this is not permitted. And for the rare application I can fix, the process is not inexpensive and usually eliminates any savings realized by using the low cost provider in the first place.

I don’t want to imply with this post that I am extremely expensive. Rather, my rates are quite reasonable if you consider the quality of patent application you are receiving. The cost for having me prepare and file an application is usually 25-50% less than using a large national or international law firm. The quality is at least comparable. How do I know; well, I used to work for several large firms before forming my own firm.

I guess something some of you may be wondering is how much can you save using a “low cost provider” to draft and file a patent application for you over using me. Well, anywhere from a $500 to $2000, so if you really just want a patent to hang on the wall with your name on it, go ahead and use a “low cost provider”. However, if you are looking for a quality patent having as much breadth and strength that is available to you under the law, then give me a call.

Wait, wait, wait… there is a kicker: in most circumstances, while an average inventor will spend less using a “low cost provider” over me to draft and file a patent application, in a majority of the circumstances an inventor will spend more money overall going with a “low cost provider”. Confused? Let me give you a hint: it concerns the patentability search and opinion.

Stay tuned: the second installment will deal with patent searches but the third installment will discuss someone even more insidious than the “low cost provider”, the “high priced charlatan”.

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Wednesday, January 04, 2006

Client Spotlight #3

Tactical Video Solutions is the producer of video camera that mounts on the end of a semi-automatic pistol's magazine, and feeds video to a small LCD screen that is typically mounted on the user's wrist.

SWAT and other law enforcement personal can use the camera to see around blind corners expossing only their firearm and perhaps their hand. Some versions of the system include infrared illumination to permit the officer to see in the dark.

Yuriy Umanskiy, one of the camera's inventors recently won the INVENTOR OF THE YEAR award from the Divinci Institute as discussed in this Rocky Mountain New Article. Congratutlations, Yuriy!

The product has also been featured on the local WB2 news and Channel 4 news as can be seen on their distributor's site (Tac-Arts, LLC) under News, Video & Stuff.

We prepared the patent application for the camera system and formed the company, Tactical Video Solutions. Further, we drafted and negotiated the company's distributor agreement.

You can also check out the camera at Tactical Video Solution's website.

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Friday, December 16, 2005

Client Spotlight #2

The title of this entry, "Client Spotlight", is particularly appropriate for this client, Camerabright!, Inc.

The company manufactures a unique LED light that fits into the tripod mount of a camera. The light serves several purposes: (1) it can be used to illuminate a scene to facilitate video capture using a digital camera or a camcorder; (2) it can be used in place of the flash when taking portraits to help minimize or eliminate the occurrence of redeye that is common with strobe flashes; and (3) it can be used with macro photography where a high powered strobe flash would washout details of the subject.

The product is Patent Pending and we expect that a Patent will issue sometime in 2006. The company is also in the process of obtaining several Trademarks. Furthermore, the company is growing rapidly and is working on new lighting solutions particularly advantageous to digital photography.

Check them out at www.camerabright.com.

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Monday, November 21, 2005

Americaninventor.tv

Apparently, ABC will be broadcasting an inventor contest reality show in 2006, and you can be one of its stars. The grand prize is a one million dollar advance against royalties. Open casting calls are December 1st in Denver.

I reviewed the website for the show and it is honest and well written. If you got a great multi-million dollar idea, you may want to consider trying out.

But I would be remiss if I didn't give you a couple things to consider if you do not already have a patent application on file:

1. If you disclose your invention to the show, you will probably start a one year clock running in which you will have to file the patent application in the United States or lose your patent rights altogether. This, of course, assumes you have not made a public disclosure or offer for sale of the invention earlier.

2. Perhaps more significantly, if you make a disclosure of the invention, you will likely lose you right to file for a foreign patent in most major nations. Honestly, for most independent inventors this is not a big deal, but it definitely should be considered before proceeding.

3. The one way to overcome the potential disclosure and the negative effect on your foreign filing rights is to file a provisional patent application before December 1, 2005. As my clients are familiar, I am not a fan of provisionals but given the timing, there is no other alternative: utility applications take too long to prepare. And to be completely honest, I can't guarantee a last minute provisional will be sufficient BUT it may be better than nothing if you have any thought that you may want to foreign file and you want to try out.

Anyhow, if you read this and attend the audition, please give us an update here.

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Tuesday, November 08, 2005

How to choose a patent attorney

Below is an updated version of an article I had published about a year and a half ago at www.Troubleshooter.com. For those who have not read the original enjoy.

And in one of my future posts, I will offer some additional pointers on choosing a good patent attorney. Unfortunately, I have found that after leaving the big firm environment and working primarily with small companies and individual inventors that a significant portion of the practictioners who work with individuals do not provide a work product that I consider satisfactory.

So here is the updated article:

In this article, I will answer the question: How does one choose a good patent attorney who will draft a patent application that is more likely to issue into a good patent? Unfortunately, the question does not have a simple and easy answer, but I can provide you with a several pointers.

First, since even a high quality patent application for very simple invention takes about 18 hours to draft and file, be very wary of an attorney who quotes you a price that indicates he will prepare the application in less time. To figure how long an attorney will probably spend on your application divide the attorney's quote by his hourly rate. Remember that the claims, the most important part of the application, are the most likely to suffer if the attorney does not spend enough time writing the application. A general rule of thumb is to avoid attorneys who say they can draft your application for less than $3300.

On the other end, you probably want to avoid very high priced large firm attorneys. They are usually very good, but they bill at extremely high rates ($250-$420 an hour). A significant part of the premium goes to funding overhead services that a small company or independent inventor will probably not utilize. Another significant portion of the premium goes into the law firm partners' pockets as profit. Additionally, the large firm lawyers are not likely to give you very much personnel attention, as their primary focus tends to be on their large corporate clients. I speak from experience: until relatively recently, I was a large firm patent attorney. One of the reasons I left was so that I could work with more small companies and individual inventors. Many patent attorneys at the large firms recognize that working with individual inventors is not a good fit and they will refer you to good solo or small firm practitioners. I regularly receive referrals from my former colleagues. Ultimately, if you are going to error on one side or the other, I recommend you error in hiring a large firm attorney over a low cost provider.

You should also avoid invention promotion companies or anyone that works with them including attorneys. In my opinion, the primary purpose of the invention promotion companies is to part you from your money and not to help you maximize the potential of your invention. By Federal law these companies must provide you with certain information concerning their success at helping inventors before they can accept your money. This information is almost always provided in small print since their success rates are either zero or extremely small. If you are interested, get some information from one or more of these companies and read their promotional materials, and you might be surprised that they really don't offer to do much of anything for you in terms of commercializing your invention. But be careful when contacting them, because if you give them a phone number, they may call you several times to express great interest in your product and encourage you to proceed. Usually, the first step with these companies is to prepare what some of them call a "patent portfolio". In my opinion, the "patent portfolio" is essentially useless. The portfolio typically contains SIC codes for your invention, a drawing of your invention, a rather generic market study and a preliminary patent search. I have seen a couple of these "preliminary patent searches" and it seems to me that what they really mean when that add the term "preliminary" to the phrase "patent search" is "worthless". Now, given the questionable practices of these companies, why would an inventor ever use an attorney they recommend? Always remember that any attorney you hire is obligated to work on your behalf and to your benefit. However, I strongly suspect a patent attorney with a symbiotic relationship with an invention promotion firm probably has a greater loyalty to the invention promotion firm than his/her clients.

So what specifically should the individual inventor or entrepreneurial company look for when hiring a patent attorney? Look to patent attorneys that are either solo practitioners or are affiliated with a small firm. You should expect hourly billing rates between $175 and about $250 an hour. A good place to identify these attorneys is by contacting local inventor or entrepreneur support organizations in your area. Suitable patent attorneys may be members of such organizations, and if not, the members can probably point you to patent attorneys they have used. And, of course, you should always consult the Troubleshooter Referral list.

Once you have identified one or more patent attorneys, you should meet with or have a phone conversation with him (or her). Ask the attorney about the potential breadth of protection you can receive for your invention. Quiz him/her on how easy it would be for someone to copy your invention by making insubstantial changes to the invention. And here is a big one: gauge whether he/she truly understands your inventdoesn'tand if he doesn't after you have made a reasonable effort to explain it to him, move on. Ask him/her about the total cost to get a patent. Does he hem or haw? Typically, the cost to get a patent to issue is about as much as the cost to file the patent application in the first place. Ask him/her about Office Actions and whether he thinks most of your claims will be rejected by the patent office initially. The answer typically should be "probably" or "yes", because the Patent Office does not like to grant broad claims before the patent attorney clearly distinguishes them over the prior art by filing an Office Action response. In other words, if you attorney thinks the claims will not be rejected the first go around, they are probably too narrow and would not provide you with sufficient protection against infringers.

In the end, you have to gauge whether the responses to your questions are satisfactory. Believe me, if you go to a few attorneys, you will get an idea of who is likely to provide the best service and highest quality and who is just after your money. And perhaps the most important word of advice: if you are not comfortable with an attorney after you have interviewed, don't use him. In the end, if you choose wisely, you will have a much better chance of ending up with a valid, enforceable and sufficiently broad patent that will prevent others from making, using or selling your invention. After that, it is your job to market your invention with or without the help of a reputable marketing company and see where your endeavor may lead.

As an entrepreneur who has invented products and formed a company to manufacture and sell those products, the most important advice I can offer is to have fun and enjoy the process of bringing your invention to fruition. After all, life is the journey and not the end result. Good Luck!

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Tuesday, November 01, 2005

Client Spotlight #1

Every once and a while we will be spotlighting the products or services offered by our clients.

The first client we are spotlighting, Wheel Riders, has been with the firm since the beginning and with me since I went into private practice nearly 3 years ago.

Wheel Riders make bicycle wheel holders that mount to the frame of an associated bicycle. The primary use of their products is to hold the front wheel of a bicycle while it is secured in a roof top rack for transport.

The company is in the process of building an impressive and strong patent portfolio relating to their product line and hold several trademark registrations as well.

Check out there website at http://www.wheel-riders.com/.

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Thursday, October 27, 2005

Control Protect & Leverage Part V

It has been awhile since I wrote Part IV and since this last and final Part deals with leveraging patents, I suggest you go back and read Part II first which deals with protecting your IP especially as it pertains to patents.

This is perhaps the most difficult topic to write about (at least concisely) as there are so many ways to leverage patented inventions. And no one way is the end all or the best; it really depends on circumstances and resources.

For companies who are or intend to manufacture a product or offer a service, the ultimate goal is most desirably to keep any potential competition at bay, whereby they have the ability to charge a little more for their product or service and accordingly increase their profitability.
Many new and innovative products have more than a single point of novelty: that is they are unique in more than one way. Each point of novelty is often deserving of patent protection. One product can often result in more than a single patent. One of the larger clients I represented in the past has been known to obtain 5-1- or even more individual patents on a single product. For instance, they would protect the overall concept surrounding the product. They would protect the unique individual parts or components used in the product. They would protect the machinery used to manufacturer the product. And they would protect the manner in which the product was used. Ultimately, it would be very hard if not impossible for their competition to knock off their product without infringing one or more of the patents. Because of this, their competition hated them.

The forgoing is known as the portfolio approach wherein a company protects its products or services in as many ways as possible. This approach is obviously expensive, but if the associated products and services stand to generate substantial revenue for a company, it is often worth it.

The company is then free to leverage the patents in any number of ways. One, they can keep their competition at bay preventing them from making or using the new and innovative product or service and thereby increase their market share and profits. Two, they can license the patented technology to their competition for a licensing fee. Sure, this will increase competition but it will also help grow a market segment faster, and the licensing revenues extracted from the competition will give the company a competitive advantage in terms of the cost to produce the product or provide the service. Third, the company can use the portfolio as protection against being sued for infringing a competitor’s patent. For example, if a competitor charges the company with infringing one of its patents, the company may be able to turn around and assert that the competitor is infringing one or more patents in its portfolio. In the end, the two companies often end up cross licensing patents in their respective portfolios and they avoid the uncertainty of litigation. Finally, perhaps the least desirable way to leverage a patent, the company can sue infringers. Patent litigation is rarely entered into lightly: it is extremely expansive and extremely risky. You may go in thinking you will receive an award of millions and end up with an invalidated patent and millions in legal bills. So if litigation can be avoided it probably should be, but sometimes no other alternatives are possible.

For the entrepreneur or startup company, patents must be leveraged differently. Typically, the inventor can only afford at most a few patents. And unlike the big company, the patent(s) represent the majority of value for inventor. The inventor cannot afford to compete with big companies in terms of capital or distribution, so the patent is the thing that hopefully levels the playing field somewhat. In a big company, the product or service and its sales represent the greatest value and the patent is there only to help support the product’s value.

Considering the forgoing, there are really only two preferred ways for an inventor or entrepreneur to leverage their patent(s): (1) license the patent(s) to a big company typically for a royalty on sales of 2-10% of the associated products or service’s wholesale price; or (2) use the patents to obtain angel and/or venture capital financing to rapidly establish market share and presence for the product of service.

Notice that I did not mention wholly going it alone and building a company from the ground without an infusion of capital from the outside. It is just too difficult for the entrepreneur to succeed without significant and even massive amounts of cash. Why? Cashflow! Even if the product is widely successful and you have a great profit margin, you will not be able to meet the demand and the venture will go deeper into debt until it folds or you raise the necessary capital for expansion. But if you do not act fast enough, you will be knocked off your patent be damned and because of the cash flow problem, you will not have the several hundred thousand to a million to pursue patent infringement litigation.

Does this mean you shouldn’t manufacture and sell your product on a scale you can afford? Oh to the contrary, to interest the big company to license or to attract deep pocket investors, you will have to show that the product can be successful in the marketplace. Essentially, you have to reduce the perceived risk to the company or the investor associated with the venture. Just always realize in the end, you either want to be acquired or you have to raise significant capital. And understand that venture capitalists are going to want a controlling interest in your company. Usually, there is just no way around it.

I recommend before patenting an invention that you think about where you want to go with it. Write a business plan. Read everything you can get your hands on about inventing and bring a product to market. Take classes about entrepreneurship. Attend local venture club events. Take classes at the local college. The really hard work actually begins after the patent is filed, but the work and the outcome can be very rewarding and well worth it in the end. The experience is invaluable, and if your invention is a good one and if you put the necessary energy and determination into the invention, the financial rewards just might be incredible as well.

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Thursday, September 08, 2005

The 10% Rule?!

My wife sent me a link the other day to a brief story about the mominventors.com guidebook by Tamara Monosoff. The book was just recently published. After reading the brief article, I became quite steamed! What a bunch of misinformation. I was so mad I ordered the book from Amazon. Is this author really so dim? According to the article, she isn’t very pro patent and indicated that a rival only has to make their competing article “10% different from the patent” to render the patent useless! What! Once and for all, there is no 10% rule nor a 5% rule nor a 1% rule. I don’t even know how one would measure percent difference. Simply, for a competitor to get around your invention, they need only produce a product that does not read upon the claims in your patent. If you have nice broad claims, getting around your patent can be next to impossible no matter how much different. On the other hand, if your patent’s claims are weak, than a very small inconsequential change may be all that is required. To lay it out simply: a high quality patent with high quality claims is usually what is required to thwart your competition.

Anyhow, back to the author, Tamara Monosoff: after cooling down I realized the quotes and statements attributed to Ms. Monosoff may have been misrepresented by Mr. Steve Hargeaves, the staff writer who prepared the article. I have had that happen to me all too much. In fact, when I had my bicycle component manufacturing business and an article was run on the company or me, my statements were almost universally changed. Luckily, the gist of what I was trying to say was usually communicated if not in an altered fashion. So when the guidebook arrived, I quickly scanned it for the 10% rule reference and it was not there. In fact, the little of Ms. Monosoff’s book that I have read is very good and offers some very reasonable advice. Perhaps in the future I will provide a more complete review of the book.

What is the point to this post? Well, I suppose it is a rant on how the press constantly misrepresents patent law. They just do not understand it and they are trying to take a very complex body of law and distill it down to very basic principles. This is tough if not impossible to do. So be careful when reading articles in the newspaper, magazines and the internet about patenting and inventing. Unless the article is written by a qualified patent attorney (notice I said written because a written interview of a patent attorney can suffer from the same problem as the article that precipitated this rant), take what is being written with a grain of salt. In the end, you can always expect to find the truth right here and on the firm’s website.

And if you come across any mainstream press articles about inventing and/or patenting send them to me and perhaps they will be the subject of a new blog entry.

Till next time….

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Tuesday, August 30, 2005

The Ethics of Infringment

The Ethics of Infringement

Recently, I was visiting the blog of a law student/patent agent/soon to be attorney that Kurt and I know. He wrote an entry in response to a comment he received from one of his articles concerning a MythTV project of his (from what we could gather MythTV is somewhat similar DVR system to TiVo or Replay – details can be found at http://www.mythtv.org/ ). The comment asked whether he was concerned about whether or not he was concerned that he might be infringing any patents held by TiVo or any other companies concerning the technology. His response can be viewed

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Sunday, August 28, 2005

So you want to write your own patent application!

Can I prepare the patent application myself? This seems to be a very common question lately among prospective clients. I have addressed this issue in my FAQ page on the firm’s website, but I believe this question is deserving of additional consideration here.

First, let us start with a common misconception concerning patent applications: many people are under the false belief that a patent application is a form that is merely filled out and filed. Nothing could be further from the truth. There is no standard form that can be filled out with relative ease. Rather, a patent application is a multi-page written legal document that on average for a simple invention approaches or exceeds 5,000 words in length. The content of this document in whole or in part determines the scope of protection afforded the patentee, the strength of the patent, and consequently, its value in the marketplace.

Simply, a poorly written patent application, which issues into weak patent, will be easy for a competitor to circumvent without infringing while still taking advantage of the advancements and improvements described in your patent. And if the patent is easy to get around, then companies that make products or sell services related to the invention are not going to license it. Further, the patent may provide little or no deterrence effect to those who want to market products and services that will compete with your invention. To summarize: a weak patent resulting from a poorly drafted patent application is often no better than having no patent at all. In fact, it is often worse considering the time and money spent preparing the patent application and shepparding it through the patent office might have been better spent marketing and promoting the product or service.

So how does a poorly prepared patent application relate to an inventor drafting a patent application themselves? Well in my experience in all but a very few exceptions, an inventor drafted patent application and the subsequent patent issuing therefrom is usually poorly prepared and weak respectively. I would guess maybe 1 in 100 is halfway decent and that rare gem is most often prepared by an inventor that has had a significant amount of experience with the patent process. In other words, the inventor probably prepared a number of duds before he/she got it right.

Why are inventor prepared applications so poor? Sometimes the applicant is not a great writer but even very good to excellent writers have a difficult time of it. Why? Because patent applications are written differently from other types of writings. A good patent attorney always considers his/her knowledge and understanding of patent law with each and every word, sentence and paragraph he/she writes. As a good patent attorney becomes more and more experienced, the process becomes more natural and requires less and less of a conscience effort. But the inventor often does not have the knowledge or experience to apply to the effort and therefore will almost invariably make mistakes that effect the patent’s ultimate strength and desirability.

An aside: you notice I tend to use the phrase, “good patent attorney” and not “patent attorney”. This is on purpose. Stay tuned to this blog for future discussions and musings about good versus not-so-good patent attorneys. I wish I could say most are good, but the more and more stuff I see from other attorneys, especially those that deal with primarily with independent inventors and entrepreneurial companies, the more I realize there are a significant percentage of “poor patent attorneys” out there.

I guess an example or two is in order. On my web site I use the example of performing surgery on yourself rather than hiring a doctor. You could very well be more intelligent than your surgeon but I am betting no amount of reading and watching of surgery videos is going to prepare you for removing your own appendix. So you hire a qualified doctor. OK, this example is a bit extreme since surgery is a life and death situation and drafting a patent application generally only has monetary consequences. But if you are building a business around your invention or you are certain it is a million dollar idea that could be easily licensed to a major corporation, don’t you owe it to yourself to do it right? Incidentally, newbie patent attorneys have the same problems as an inventor in writing their first patent applications except perhaps they will have a bit better grounding in the law. Nevertheless, this is why patent attorneys fresh out of law school are closely monitored and their work is closely reviewed by their senior colleagues.

Ok, back to the question posed at the beginning of this now very long entry: can I prepare a patent application myself? You would think after reading this my answer would be a resounding NO! However, I cannot seem to say it. I merely tell a prospective client a shorted recitation of what is written here and send him/her on his/her way. This particular client could be the one in 100, and even if not, there is nothing legally preventing the prospective client from preparing and filing his/her own application. And who knows, maybe they will be back in the future with a new found respect for my craft.

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Friday, August 26, 2005

Control Protect & Leverage PART IV

Finally, the second to the last installment in the series!

And really this is perhaps the most important point of your Intellectual Property. What is the point of controlling it and protecting it if you do not intend to leverage it? Unfortunately, successfully leveraging your IP can be the most difficult of the three. After all, the whole point of IP is to give you or a company to which you have licensed your IP, a competitive advantage over the competition.

First trademarks: They are perhaps the easiest IP to leverage. Just use your marks in commerce to identify the goods and services offered by you or your company. As your products and services become recognizable based on your marks, the value of the marks will increase. While trademarks have the lowest initial intrinsic value among all types of IP, they have potentially the highest value over time. For instance, "Coca Cola" is worth trillions of dollars as a trademark and is often licensed to other companies to generate additional revenue for the company.

For most individuals and small companies, the goal is to make the trademarks identifying your products or services synonymous with quality and value within your market segments. Further, the hope is that eventually your marks will immediately come to mind when someone familiar with the market segments in which you operate thinks about the products or services you provide.

Some pointers to leveraging your marks: (i) always prominently mark your products; (ii) always refer to your product and services by their trademarked names in advertising and other company literature and marketing materials; (iii) always mark your registered marks with an encircled “R” symbol to let others know you have registered the mark federally; (iv) always mark your unregistered marks with a "TM" to let others know you consider the marks your property; (v) avoid using your marks as generic descriptors for your products and services; and (vi) be diligent about enforcing your marks letting those that are using marks that may be confusingly similar with yours that they should cease and desist.

If your mark(s) becomes especially well recognized, you may have other companies approach you about licensing the mark(s) for their products. This is great but you must maintain control of the manner in which the mark(s) are used by others. Typically, trademark licensing agreements will include clauses that give the Licensor the right to ensure that certain quality standards are met concerning any product or service using the licensed mark(s). Failure of the Licensor to maintain and control quality standards can lead to loss of the trademark(s).

Next up: leveraging you patents.

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Wednesday, August 17, 2005

Will My Invention Be Successful?

I am asked that question a lot. The fact of the matter is that I have no better idea than you whether your idea will be successful. If you want an evaluation concerning the market viability of your invention and the chances of success in the marketplace, see a marketing professional.

While those with skill in marketing are much better than your friendly patent attorney at determining you invention's chances of success, don't expect them to be infallible either.

The real difficulty at evaluating inventions and new product ideas was brought home to me on a recent family trip to the local Big Lots store. For those of you not familiar with Big Lots, it sells overstock and clearance merchandise from no name to brand name manufacturers. Much of the merchandise is stuff that never made to mainstream retailers. Many of the merchandise at Big Lots failed in test marketing and the remaining stock was then sold to Big Lots for liquidation.

In the most recent circular, Big Lots is advertising Jolly Rancher soda at a mere $0.37 for a 16oz bottle. Apparently, this idea failed miserably. But you have to realize that big time, high paid marketing and product development types at the Jolly Rancher company as well as their executive bosses must have thought the idea for Jolly Rancher soda pop was a great idea. And they must have thought they would make millions. Instead, the idea failed miserably with the remaining product is currently being liquidated for mere pennies at Big Lots. To be honest, I love Jolly Rancher candy, but the thought of Jolly Rancher soda pop kind of turns my stomach.

There are plenty of other examples at Big Lots. A trip to your local Big Lots might be an educational trip worth taking for the budding inventor and entrepreneur.

So what the moral of the story: success is never guaranteed; determining whether your invention is market worthy is as much a leap of faith as much as anything else; rely on your patent attorney to advise you on the patentability of your invention but not its marketability; the marketplace is a very complex thing and accordingly is very difficult if not impossible to figure out; and perhaps most importantly, you chances of success are fueled more by your belief in your invention and dedication to it then whatever advice your receive from others whether good or bad.

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Monday, August 01, 2005

Design or Invention?

Innovation: that is the new name of the game in the corporate world. Old stoic companies, such as GE and Proctor and Gamble, have seen the light: cost cutting and efficiency, although important, will not win the day if the products and services a company offers do not resonate with their consumers. Managers are being given design training. Top MBA schools are rushing to offer design courses and in some cases starting design schools. At least these are the proclamations of the August 1, 2005 BusinessWeek "Get Creative" special report.

What I found most interesting about the series of articles was not what was written but what was not. I did not see a single mention of inventing, inventorship or inventors. Perhaps, this because these are dirty words in the corporate world that conjure up images of the absent minded genius toiling away in his garage or basement amid a bunch of what many of us would call junk. I hate to break it to these guys, but design is just a new fangled word for invention.

The articles emphasize creating and fostering a culture of creativity, but they fail to mention that there are thousands of good ideas available from independent inventors, or should I say independent designers, all across this great land. I wonder when companies are going to wake up and realize the wealth of great ideas and products available to them for mere pennies on the dollar through the independent inventor if they were just willing to take a look. Sadly, however, the age of the independent "designer" has not yet arrived. Many, if not most, larger companies will still not look at inventions developed outside their corporate walls until a patent has been filed. And even then, they rarely actively seek out such new product ideas.

Ponder this: who is likely to come up with the next great consumer product? The 100 or so highly educated designers who are on the payroll of company x or the tens of thousands consumers nationwide that regularly come up with meaningful improvements to products they regularly buy and use? Is a single salaried designer really better than a hundred consumers? You decide, but keep in mind many of those hundred consumers are also highly intelligent and highly creative whether or not they are highly educated as well. Will companies ever realize that their consumers are a great source of new product ideas?

Well, I believe the truth is companies have started to realize the value of the independent inventor. It is the Business Week special report that is a bit dated. GE and PG may be looking inwardly for design ideas just when their competition is beginning to realize the value of looking outwardly to you: the often maligned but resilient independent inventor. Case in point: I have been noticing more and more advertisements in Inventor's Digest Magazine of late from major corporations soliciting new product ideas. I don't recall this being the case only a couple of years ago. In the current issue, Kraco Enterprises, Inc. and Dial Corporation both have advertisements.

Maybe, the dawn of the golden age of the inventor is on the horizon, BUT just don't expect BusinessWeek to herald its coming anytime soon. Anyhow, take a look at the "Get Creative" issue and tell us what you think.

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Monday, July 25, 2005

SOLA update

Well, this morning I found a new blog comment in my email box from the CEO, E.C. Wagner, in my inbox. Apparently, he did not appreciate my post about his company. I was forced to remove his comments as they were blatantly slanderous towards me. Unfortunately, The blog program I utilize did not allow me to remove his comments selectively so other readers who have left comments under my previous Sola blog entry have been removed as well. To those of you affected, I apologize.

Let me give you the gist of Mr. Wagner's comments: according to him, I am public enemy #1 in the inventing industry and all sorts of governmental and consumer (BBB) agencies are investigating me. I will let you the informed consumer make up your mind about me after reading my blog entries and the substantial amount of material I have written on my web site and at www.troubleshooter.com about inventing and patenting.

Anyhow, I have invited Mr. Wagner in an email to send me notice of any errors about his company that appeared in my previous post , and if I can substantiate any errors, I will issue an apology and retraction right here.

To start, I have changed the name of the previous blog entry to be less controversial. To those of you who have not seen the previous title, it will soon be forever lost in the ether of the internet.

Second, this post is to inform you of a change to the Sola website, www.solaclient.com, which now admits that their services are pay for services. Specifically, their website states, "This three tier program includes: 1. 'up front' payment no risk-royalty programs...". Kudos to Mr. Wagner's honesty in this regard, and with this change at least one of my complaints of his company are ameliorated.

And Mr. Wagner, if you would ever like to talk, just give me a call.

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Wednesday, July 20, 2005

Invention Promotion Companies

Anyone who has read much of what I have written here and over at Troubleshooter.com know that I am not a friend of invention promotion companies. While I believe most try to comply with the law, I don't believe these organizations offer a lot for the substantial sums of money paid to them.

Anyhow, the point of this post is not to give my very strong opinions but to give you a resource in investigating invention promotion companies. With the passage of the Inventors Protection Act of 1999, the USPTO is required to provide a public forum for the publication of complaints concerning invention promotion companies.

So without further adieu:

http://www.uspto.gov/web/offices/com/iip/complaints.htm

Enjoy...

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Wednesday, June 22, 2005

Research find Patents are Worth It

As reported in Businessweek SmallBiz Summer 2005 edition, Ronald Mann, co-director of the Center for Law, Business & Economics at the University of Texas School of Law (does that title even fit on a business card?) found that indeed patents were worthwhile.

Mr. Mann found a strong correlation between the pursuit of patents and the later success of startups in software companies. Startups WITH PATENTS are FOUR TIMES as likely to go public than those without and they are half as likely to fail. Software companies with patents received on average 11 million dollars more in financing than those software companies without patents.

The trends were similar for biotech companies with those with patents fairing much better than those without.

So what can we take from this: patents aren't going to help a company with bad ideas, concepts or products. They are not a panacea. However, patents will make companies with sound business models, products and services more attractive to potential investors. And with more money a company is better able to whether the ups and downs of launching a new venture thereby increasing its ultimate chances of success.

Ciao

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Sunday, June 12, 2005

Control Protect and Leverage, Part III

And here it is... The newest installment in what was intended as a three part post but is threatening to become a book! I hope not!

Having covered protecting patents in Part II, we will consider protecting Trademarks in this entry.

Unlike patents, the Federal government does not grant you a trademark (or for that matter a copyright). Rather, they merely register the trademark or copyright putting everyone else in the nation on notice of your mark. The only way to obtain trademark rights is to actually use the mark in commerce. That is, to sell good or services that are identified by the mark. And if you stop selling the goods or services associated with a mark, you lose the mark.

So if you automatically gain rights to a mark the minute you start using it in commerce (assuming of course that no one else has senior rights to the mark over you), why register the trademark Federally? Well, there are several advantages of Federal registration: (1) you gain nationwide scope in terms of your exclusive right to sell your goods under the registered trademark; (2) you can make your intent to use the mark in the future for a particular class of goods or services known prior to ever using the mark thereby pre-emptying others from using the mark in commerce before you; and (3) you gain access to the Federal courts to enjoin or sue someone who is infringing your mark. I will write about the first two advantages.

Nationwide Scope of Protection:

With Federal Registration, you can prevent others from gaining use rights to your mark anywhere in the United States in a field of use similar to yours even if they have no knowledge of your prior use. Without Federal Registration, your protection is limited to the geographic area in which you operate.

So, for example, if you have a restaurant chain with restaurant locations in Colorado and Wyoming, you can only prevent others in that state from using your restaurants name. But with Federal Registration of the name as a service mark, you can prevent anyone nationwide from using the name, and that may come in handy if you want to expand the scope of your business.

Intent To Use Registration:

Normally, trademarks rights only accrue when the mark is used in commerce. If one had to rely on actual use, he/she might spend substantial sums of time and money preparing to launch a product only to find out at the last minute that someone beat him/her to the punch and started to use the mark first. Depending on the size of a product or service rollout, the cost could be staggering and difficult to recover from.

Fortunately, the Federal government allows one to file an application for a mark they intend to use in the near future, and with the filing accrue senior user rights over anyone who starts to use a similar mark thereafter. Accordingly, you can be more assured that your marketing and rollout budget will not be in vain.

Now, for less important trademarks, many opt not to Federally register them. Nonetheless, they are protected under common law in the geographic area of use. The key when dealing with secondary marks is to always acknowledge them as your mark by putting a superscript SM (for service mark) or TM (for trademark) when they are used.

Part IV of this series is next and finally we will be discussing the final topic: Leveraging you intellectual assets. Unfortunately, if the next installment takes me as long as the time between the second and third installments, you might have to wait a little while. Lets hope this is not the case.

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Saturday, June 11, 2005

SOLA - A New Twist in Invention Promotion

Anyone that knows me knows I am not a fan of invention promotion companies (and that is putting it diplomatically). You know the companies that advertise on late night TV and the secondary channels, such as the Invention Submission Corporation and Invent Tech to name two. First, before I write anymore perhaps I should provide a disclaimer: everything I say in this entry is my opinion. In general, these companies tend to operate within the law if just barely. As the law changes to regulate them, they just modify their practices enough to comply. Here is my real problem with these companies: they do not provide good value for what they charge. Anyhow, this entry isn’t about your run of the mill invention promoters, but a new kid on the block, SOLA.

Who is SOLA (an acronym for Sale Of Licensing Agreements). They appear to be a Texas based company that offers to help patent holders license their patented inventions to industry. And here is the kicker, they offer to do it for no cost to the patent holder, they just receive a percentage of any royalties received pursuant to the invention. I first became these guys when a prospective client came into my office with their materials and wanted to know if it was safe to deal with them. He couldn’t see the hook. But since SOLA was repeatedly calling him and enticing him to go forward with them, I figured there had to be a hook. The thing that really opened my eyes was the fact that in their personal letter to my client, they referred to his invention improperly: I believe they called his paint can cover a paint can label. All of a sudden I was sure these guys were in the same class as other invention promotion companies, but I needed to know the hook.

I read the materials and there it was: in order for SOLA to spend UPTO $160,000 of their money promoting a patented invention, they require the patent holder to prepare a list of companies that might be interested in licensing the patent. And it just isn’t a list of company names, but their addresses, the person in charge of R&D and his/her contact information, the company’s R&D budget, as well as a bunch of other stuff. Oh yeah, they requested the list be prepared by a Masters or Phd in marketing or business administration. How many of us have one of those degrees just lying around? Well, SOLA indicates in their materials that they have people they can refer you to that will prepare the list. That was it: the hook, the way they really make their money. The have an affiliated company that charges you to prepare the list. Once the list is done they spend some time contacting these potential companies (at least one would figure they do) and they do spend UPTO $160,000, but I suspect the real amount spent is a couple of hundred times less than the maximum.

Anyhow, a new prospective client came in the other day with SOLA letters in hand. They requested he send them a check for about $1300 made out not to SOLA but to Federated Documents Services, I presume for that company to prepare the list. For some reason, I suspect that SOLA gets a cut of the $1300 and that more money will be requested in the future but I don’t actually know this.

Based on this new information, I want searching for SOLA on the web, and what I found was a company that is selling franchises for somewhere around $73,000. Apparently, qualified franchisees will earn extremely high incomes rather quickly. In their FAQ section they state the franchise will become profitable in “your very first month”. WAIT, WAIT, WAIT. License Agreements take months to negotiate if not a year or more! How can they franchise be profitable in the FIRST MONTH unless they are getting money from the patent holder. BUT WAIT, SOLA’s website states, “SOLA takes all the risks and invests its time and money in marketing your product.” This just does’t add up does it?

Anyway, be forewarned: if you have a patent and you are an individual inventor, you might receive an email or letter from SOLA, and although they may tell you they are helping you out a no cost to you and that they will bear the risk, I just don’t buy it.

Oh yeah, if you want to buy a franchise that “will quickly yield extremely high personal income under all market conditions”, then check out this site: http://solafranchise.com/ . And if you have any information about this interesting new entry in the world of invention promotion, let me know.

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Tuesday, May 10, 2005

Control Protect and Leverage, Part II

A few weeks ago I posted an entry concerning controlling your IP. This entry pertains to protecting your IP.

PATENTS

By obtaining patents for your inventions, you can prevent others from making, using or selling them. Inventions aren't just mechanical or electronic devices, but include methods as well. Under the current laws, methods of doing business can be patented and computer software can be patented. Simply anything under the sun made by man can be patented so long as it is "useful". And usefulness is measured very broadening. For instance games and novelty items primarily for amusement purposes are typically patentable.

What does a patent do for you? Simply, it gives you the right to make, sell and/or use your invention as defined by the patent's claims. If the coverage provided by the patent is of sufficient breadth, it can impart a significant competitive advantage to its owner or a licensee of the patent.

individuals should only patent those inventions that can be protected broadly enough such that the patent cannot be easily designed around. This way if the individual goes into production of his/her product, the competition (especially those with deep pockets) cannot make a competing product that undercuts your efforts. Patents are often the great equalizer for startups over their well heeled competition. And if the intent is to license the invention to a company already in a particular industry and generate a royalty from the license, a company typically will not license a patent if its competition can easily design around the patent, because such a situation would put the company at a disadvantage relative to the competition to the extent of the royalty it must pay the patent owner. However, if the patent is both sufficiently strong and broad, a company licensing the patent can afford to charge more than the amount of the royalty since the competition cannot make, use or sell an invention similar to that covered by the patent.

One thing for the inventor to always keep in mind when pursuing patent protection is that patent applications are not commodity items. Going for the cheapest patent application will usually get you what you pay for. If you truly want a patent that is strong and hard to get around shop carefully and consider things other than price. What is more expensive in the long run: (1) a patent that ultimately costs $10,000 and generates a regular royalty income from being licensed to a company; or (2) a $5,000 patent that hangs on your wall but won't licensed because it was too easy to design around the patent? I can easily draft patent applications for $2000-2500 as some of my online competition by cutting corners, BUT I won't because the resulting product will not be something I am proud of. Our firm offers quality and value and we believe we could deliver neither if the proper amount of time is not spent preparing your patent application. It really is that simple.

Companies should be concerned with all of the factors discussed above for individuals, but other factors should also enter into their patent strategy. Specifically, many if not most companies that make and sell potentially patentable products or services would be best served by pursuing a patent portfolio instead of a single patent. The reason is simple: more patents are more difficult for your competition to design around. Accordingly, any one patent may not be extremely broad or strong but in combination with a number of others, the portfolio will be a formidable obstacle for your competition. While the costs of pursuing a patent portfolio strategy can be expensive, the benefits in terms of your competitive advantage in the marketplace will often more than makeup for the expense especially when your product or product line is generating hundreds of thousands to millions of dollars in annual revenue.

Another advantage of a patent portfolio is that it may make you less susceptible to being sued by a competitor for violating one of their patents. This strategy is employed by many of the larger high tech companies such as IBM, Microsoft and Intel. Consider what would happen if your competitor accused you of infringing one of their patents, perhaps a patent you did not know they had: (1) if your company has its own portfolio, you could examine the accuser's product line and hopefully find one or two patents of your they might be infringing and the two of you could sit down and cross license the respective patents to each other and avoid an expensive litigation; or (2) if your company does not have a patent portfolio to assert defensively against the accusing company, you will either have to settle with the accuser or litigate.

Wow, this entry is getting a bit long and I haven't even got to Trademarks. Well that will have to wait until Part III.

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Wednesday, April 20, 2005

Control Protect and Leverage?

Why is this the name of our Blog? Simply because these are the steps that every individual or company should follow concerning their Intellectual Property (IP) no matter what type of IP they own. In fact, there really is no point to having IP if all these steps are not followed.

My next three Blog entries will discuss each step in greater detail with today being about "CONTROL".

Companies:

It behooves you to have an IP agreement in place with all your employees or at the very least those involved in marketing and product development. The agreement should in no uncertain terms make it clear that the company owns all intellectual property developed by the employee on company time, using company assists, and/or that relating to the company's area of business. Often, the IP agreement is made part of the employment contract.

Further, companies should have a written and enforced trade secrets policy. Trade secrets are information developed by a business that is not readily or easily available to those outside the business. Trade secrets can include things such as customer lists and other proprietary information that if obtained by a competitor would potentially hurt your competitive position in the marketplace. If an employee leaves your company for a competitor and takes trade secret information with him, you can sue the former employee and competitor to return the information and enjoin them from making use of it . However, in order to be successful the trade secret information must be treated and handled properly by the company and its employees. For example, only those employees with a need to know should have access to any particular piece of sensitive information. Further, any information that is intended as a trade secret should be appropriately marked. By having a written policy and procedures to see that the policy is enforced, a company's chances of prevailing in a trade secrets dispute are greatly enhanced.

Individuals:

Much too often we have clients come into our office that want to patent their invention, but they are no longer able to legally do so. I have had clients come close to begging for me to draft and file a patent application for them. The primary reason that they cannot receive a patent is that they have either been using the invention in public for more than a year in an uncontrolled manner or they have offered the invention to sale to someone more than a year prior to coming to me. Incidently, when it comes to most foreign patent rights, you don't even have one year. Rather, the bar to filing an application occurs immediantly once you disclose an invention to the public!

Avoiding uncontrolled public use or disclosure is a relatively simple: have whoever you are disclosing the invention to sign an Non-Disclosure Agreement (NDA). A sample NDA is available on our website.

Does this mean you should have close friends, children and spouses sign an NDA? Well, I am unaware of any specific instances where an inventor has lost his/her rights by disclosing the invention to people close to them, you always run the risk that these same people may disclose the idea to others and at that point you will have lost control of your invention and the one year clock will being to run. Generally, I don't see such disclosures to close friends and family as a problem but it never hurts and can only help if they sign an NDA.

An NDA will not prevent the one year clock from beginning to run if you offer the invention or an embodiment of the invention for sale even if the person or company your offering the invention to has signed an NDA. So be very careful about offering to sell your invention and if you do make such an offer, note the date and make sure to contact a patent attorney no later than a couple of months before the first anniversary of the date.

Concerning all issues relating to the CONTROL of your intellectual property, it is always wise to contact a qualified attorney (remember only patent attorneys are qualified to render legal advice about the procurement of a patent). Without a doubt, the most cost effective us of legal counsel is before an issue or problem arises. When it comes to IP, the old cliche, "an ounce of prevention is worth a pound of cure" is definitely true.

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