How to protect your idea? Patents and Licensing

Hey Vinnie, We covered a lot of this in episode 11 "Getting That Business Idea Out of Your Head and Making It Work For You". Try listening to that one again. But in general, getting a patent is rarely worth the money unless you are already making money on it and want to protect something that is obviously worth hundreds of thousands. The problem with that, is you only have ONE YEAR to decide if it is worth doing. Once you start selling a product or somehow tell the public about your idea, you only have ONE YEAR before you can apply for a patent. After that, it's considered "public domain". Patents can be anywhere from $5000 to $25,000 to get done, depending if you do a lot of it yourself or have an attorney do it. MY FAVORITE TRICK: Apply for a "Provisional Patent" ($300 - $400) before your one year deadline. You then have ANOTHER YEAR to apply for the FULL PATENT if you decide to go through with it. The benefit of doing this is you can use the prior date on your FULL PATENT application as your effective date. A Provisional Patent is basically a description and drawings you do yourself with as much detail as possible to send to the Patent Office for them to keep on file. But that's it. They don't even look at it. It protects your idea for cheap. It allows you to legally say "Patent Pending" on your product (a big deterent for other to copy your idea). It also gives you priority dates if someone tries to say they came up with it first.

I started selling Porch Potty and then filed a Provisional Patent 11 months later. I then was making a lot of money on the idea and decided it was worth the $20,000 to get a full patent. I did this 11.5 months after that. Essentially filing my patent almost 2 year after I started selling. I've never had to use the patent, and I'm not sure I ever will. The one thing about Patents that you need to remember is that they are USELESS unless you have legal dollars ready to spend to sue others that infringe on the idea. The patent is really just a way to scare competitors away, not keep them from trying.

There are three main parts to getting a patent: 1) Searching for related patents and "Prior Art" (past patents or previous "public domain" inventions that overlap with your idea. You can do this yourself at the Delphion Patent Search website. Google also has a database of patents (free). I think the USPTO.gov website might have something similiar too. The point is you can do it yourself if you know what you are looking for. If not, than try using a low cost patent search company do it like LegalZoom.com. I did this and found it to be fairly comprehensive for what you pay for ($300). If you have a patent attorney do it, be prepared to spend thousands (not recommended unless it is a VERY complicated invention). 2) Writing the patent. This "can" be done by yourself, but I would NOT recommend it. It is VERY important that if you are going to spend the time or money, that you do it right. Have a patent attorney draft this for you. 3) Debating with the US Patent and Trademark Office: Also should be done by an attorney. Once you file your application, the Patent Office will debate with you over what is patentable and what isn't. This is where the costs really add up, but is necessary.

All in all, patents are expensive. I think they are over hyped, despite the fact that I use them. Sometimes I wish, I would have just pressed my luck. It's a judgment call.

With regards to Trademarks, Copyrights, and Licensing. Those are all very different things than what you might think they are. Trademark is something you get to protect your company LOGO. You can get a Trademark for a saying or tag line too. You can put TM on anything you want that you consider your trademark. If you get it registered with the USPTO, then you can put the (R) circle R on it. A copyright is a written document or piece of art that you want to protect. This includes software code, books, even articles and blogs. You actually are granted a copyright on anything original you come up with WITHOUT actually registering it. But I recommend registering it if you REALLY want it protected. Licensing is not a form of protection. It is a way to make money off of an idea you sell the rights to USE and SELL to someone else. If you got your idea patented, you could then LICENSE your idea to a company to manufacture and sell it. You would most likely get a royalty (5-10 pecent of sales maybe). A Utility Patent is for inventions like I described all above. A Design Patent is a lot easier to get, but totally useless because it only protects the "look" of your idea. The way the apple ipod looks is a good example. If Apple wants to protect themselves from other companies making products that look like theirs, they would file (and do file) a DESIGN PATENT.

Phewww that was a long answer. Hope that helps.

Hello Brandon, thanks so much. Very complete and concise. That was exactly what I was looking for.

One, actually two, follow up questions, please:

Would you say a provisional patent is enough protection to go out and offer licences?

I really like your porchpotty web site. What tools did you use to build it?

Thanks again Vinnie

For small (and medium) businesses, Brandons way is only way to go. Patents really are too expensive to do properly and are over hyped. The system of patenting is outdated, from a time that wasn't as fast as ours. If your idea is really good and a big fish is interested, it is a losing game. Either they will find a way around the patent, or they will be able to bring more money to the table in court than you can, to spend on lawyers. But don't worry, this is a doom scenario which is unlikely to happen. It is meant to show that IF this happens, the patent is worthless. The reason why people consider a patent is the fear of companies copying their idea, but the patent will not protect you from it. People are going to have to let go of this fear of the unlikely event that their idea will be copied. Especially when the idea did not prove itself yet. Remember, building a company takes a lot of effort, even if the idea is copied.

I do not claim to be an expert, however being an industrial designer, I know a bit about the theory of patenting. cheers, Vegter