Dennis Zink: Welcome to Been There, Done That! a podcast series produced by SCORE. SCORE has 352 chapters, and 12,000 counseling mentors across the United States. You can reach SCORE by calling 800-634-0245, or by going to our website at SCORE.org where you can request a mentor. SCORE is a resource partner of the Small Business Administration. Our goal is simply to help your business become more successful. We accomplish this by utilizing the knowledge base and expertise accumulated by our volunteer mentors as they truly have been there, done that. I’m Dennis Zink, and I’ll be your host throughout this series, so sit back, relax, and learn how to improve your business.
Episode number 13, Intellectual Property. Fred Dunayer joins me today in our studio as co-host, SCORE mentor, and our audio engineer. Good morning, Fred.
Fred Dunayer: Good morning, Dennis.
Dennis Zink: Our guest today is Attorney Joseph Long. Welcome to Been There, Done That!
Joseph Long: Hello, thank you for having me.
Dennis Zink: Joseph Long is a licensed professional engineer and patent attorney. He has prepared and prosecuted hundreds of patent applications for technology leaders such as Google, Microsoft, IBM, AT&T, Cisco, and Boeing, as well as technology start-ups in universities. Joseph has an extensive R&D experience in electronics and computing systems. He earned a BS in engineering and applied science from Cal Tech. He conducted PhD research in electrical and computer engineering at Georgia Tech, and earned both an MBA and a JD from Georgia State University. Joe, if I may call you Joe, what are the different types of intellectual property and how do they differ?
Joseph Long: Joe is fine. There are four basic types of intellectual property. There are the copyright, trademark, patents, and trade secrets. Copyrights are rights and original works and creative expressions held by their creator. Ideas and discoveries aren’t generally protected by copyrights, but the way in which they are expressed may be. Trademarks are names or designs that identify a product or a service as being from a particular provider; examples might be McDonald’s or Ford Mustang. Patents protect ideas or inventions. The rights are held by the inventor, and the rights are to prevent others from making, using, selling, or importing the invention. Trade secrets are generally confidential information controlled by the owner for their benefit. A popular example is the formula for Coca Cola.
Dennis Zink: How should a business protect its copyright interests?
Joseph Long: A work is protected under copyright the moment that it’s created and fixed in a tangible form. Examples of tangible work may be drawings, physical models, graphic designs, written text, photographs, videos, or computer code. In general, registration of copyrights is completely voluntary; however, you have to register your copyright with the government if you wish to bring a lawsuit for copyright infringement. It’s worth mentioning that a lot of people speak of the poor man’s copyright, which is a practice of sending a copy of your work to yourself. There is no provision in any copyright law regarding this protection. It’s generally not suitable or as any type of substitute for registration.
Generally, only the author or creator of a work has a rightful claim to its copyright. An important exception to this is a notion of works made for hire. When a work is made for hire, an employer is considered the author, even if an employee actually created the work. Employment are contractor agreements, or contracts, generally including explicit agreement that works created as part of a work for hire are the rights of the employer. A business should seek to retain the copyrights to all materials generated in relation to its products or services through such agreements.
Fred Dunayer: So, an employer would have an agreement with an employee at the time that the employee is hired to explicitly define the ownership of any works produced by that employee?
Joseph Long: That’s right. Generally there’s an IP (Intellectual Property) component to an employment agreement, would state that any created works generated as part of the employment would be retained by the employer.
Fred Dunayer: But it is implicit, even if it’s not in the agreement?
Joseph Long: It is, but it can be a bit complicated when you’re talking about an employee versus a contractor, so it’s best to make it explicit. This is particularly true with hiring contractors to develop software code, because that can be protected by copyright and generally a business wants to retain those.
Dennis Zink: That’s interesting. I recently started writing a business column for the daily newspaper on a weekly basis, and it was very clear that they owned the copyright, they can reproduce it in any fashion, and I get paid nothing no matter what they do with it down the road; and having been a publisher myself, what we used to simply do is put copyright © with the year, and then, “All Rights Reserved.” Does that cover a work in a magazine, for example, or a newspaper?
Joseph Long: That’s acceptable for providing notice to the public. You actually needn’t even do that. The copyright is, as we said, it exists the instant that the work is put in a tangible form. Putting others on notice that someone else owns the copyright is always a good idea, along with other intellectual properties, such as trademarks and patents, notification is useful.
Dennis Zink: Then I recall we used to send in a form to the government, and it wasn’t for every issue, but it would be for maybe once a year; is that the proper way of doing that?
Joseph Long: There is a registration process that can go on with the government to register copyrights and while it’s voluntary and not necessary to establish the copyright, it is required before you try to do any litigation with the copyright.
Dennis Zink: How should a business protect its trademarks?
Joseph Long: Rights in a mark can be established simply based on using the mark in commerce without having to register it, however, much like with copyrights, federal trademark registration can provide a lot of various legal advantages. When you merely claim the rights to a mark you can mark it with a symbol “TM,” as you’re probably familiar with, often applied as a superscript. This is a designation to, as we say, put the public on notice or to alert the public that one is claiming ownership of the mark.
Regardless of whether you’d ever file an application, you can use this TM designation. However, you can only use the federal register trademark symbol, which is a capital R in a circle, after the United States Patent and Trademark office has actually registered the mark, which is done by filing an application and going through a small procedure. The purpose of a trademark is to prevent an unapproved source from providing a good or service in a way that might confuse the consumers as to who the actual source is. Accordingly, a business that’s operating with a trademark should always seek to protect the inappropriate use of the mark by others to retain its value.
Fred Dunayer: I know that Apple computer seems to be trying to protect the lower case “i” followed by anything. I assume that’s a matter of a lot of discussion in that particular field as is where that line gets drawn.
Joseph Long: That brings an interesting question to the point of trademark infringement where the bar is can a consumer, or member of the public, be confused? In other words, if I start making an iRadio, is someone likely to think that that’s an Apple product? Arguably, perhaps, so there’s a complication there because typically to trademark something it has to be a specific term or symbol or design, whereas the “i-Anything” is obviously a little broad; but, the complication is not confusing the consumers.
Dennis Zink: Well, it reminds me of Citi Corp, Citi Group, C-I-T-I, and they use that for different products, etcetera, and I believe you could use “city” with C-I-T-Y, I would think, but probably not C-I-T-I with anything. Isn’t it product specific? In other words, don’t you get a mark based on a certain type of product so that if you use something that’s totally different, like clothing for example, then anybody could use that?
Joseph Long: Right, well, there’s two interesting points there. Regarding the citi, C-I-T-I, versus city, C-I-T-Y, the more fanciful a term is, or misused, and by misused, I guess I should clarify that, for example, Apple is a type of fruit, so to use it with a computer is a little unique simply in its use. The word Google, in the spelling that the company Google uses it, is a made up word. When you make up a word, the rights to it are a little more solid because you’re not trying to claim ownership of something in the dictionary.
As to the question of the use category, when you apply for a trademark, you’d generally select one or more categories, by either defining the category or using a predefined category; and then your trademark is effective within that category area. As an example, I don’t know particularly what categories McDonald’s has used for their trademark on McDonald’s, but it is probably not in automobiles; so if you were to start a new automobile company called McDonald’s, that might not be a trademark infringement issue with the McDonald’s hamburger company.
Dennis: Yeah, that makes sense because you can’t own everything, and it makes sense that it’s in categories, and that you have to select those categories. What if the categories change, or you add on, like iTunes, what might add on to something that they had never conceived of doing and then they add on a new product, and they call it “iWatch” or something? Can they add to that or is that going to be a problem?
Joseph Long: I believe you can.
Dennis Zink: What types of things can be patented? Now we’re really getting into your neck of the woods here with patents.
Joseph Long: Okay, generally anything that anyone conceives can be patented. It can be any useful process machine, manufacture or composition of matter. A process can be any act or method, a machine is fairly obvious, a manufacture refers to any articles that are made, and a composition of matter generally relates to chemical compositions or mixtures. These classes of categories taken together include pretty much everything that can be made by man or any processes for making any products. A process or method can include a method implemented on a machine.
Such a machine may include a computing machine, and this is generally the basis for claiming inventions, that may be implemented using computer software, or that is to say, instructions executing on a computing machine. Outside of the realm of what can be patented are abstract ideas and laws of nature. These are generally not afforded patent protection.
Fred Dunayer: I know that back when I was a programmer back in the early days the only protection there was copyrights, which after all is computer code is written and it can be clearly identified. I think it was, what, the VisiCalc, or the Lotus 1-2-3 era, all of a sudden software patents started becoming legal and viable. Do you believe that has created issues in terms of innovation and/or the ongoing development of new software?
Joseph Long: There’s an interesting overlap of intellectual property when it comes to software, because as we talked about the creative expression of a work is protected by copyright, so the literal code that was typed in by a programmer to implement a computer, let’s say an algorithm or a computer-based process, is covered by copyright; which means the copyright laws protect the owner of it, the software company from having that code literally copied into someone else’s code. Patents actually cover a different thing.
Patents cover ideas, so if you have a computer program that does a specific task by carrying out a set of steps, that is effectively a machine, similar to how a car carries out the task of moving someone by converting chemical energy, and mechanical energy and putting it through a transmission, and turning wheels. Implementing a method that would have otherwise been patented on a computer doesn’t make it un-patentable; so, as long as the process that you’re implementing on a computer is useful, novel, and non-obvious, which are the requirements for receiving a patent, the material is what we call “patentable subject matter,” and can be patented.
It does raise some complicated issues and it can be difficult dealing with patents that cover computer implemented methods because the current standard is that the methods have to have some connection to a machine in some way, a physical machine, and not be merely abstract concepts, and they have to substantially transform something so that they’re actually involved in the physical world in some way.
Dennis Zink: There are … I watch Shark Tank and a lot of people do, probably that are listening to this, and the sharks very often ask the guests that are trying to raise the money, “Have you filed for a patent?” They’ll frequently refer to either a design patent or utility patent. Could you explain the difference between those?
Joseph Long: A design patent generally covers the physical appearance or the form of a product, while a utility patent covers what the product actually does, and these are 2 different types of patents. Design patents can be very limited in their value at times, simply because you can get around infringing; a competitor could get around infringing a design patent by simply making something look a little different, whereas a well-drafted utility patent, a well-drafted utility claim, will exactly spell out what it is that a thing does, and anything, no matter what it looks like or how it’s made, if it falls within that definition of what is being usefully done will infringe the patent, so it provides a lot stronger and more valuable protection generally.
Fred Dunayer: Where in the development of a business should the patent process be looked into?
Joseph Long: Whenever an invention is made, really, whenever there’s a eureka moment by an inventor where they realize that they may have come upon something that is novel and non-obvious, that’s a good time to maybe start to look into is, “Is there other prior art out there that might prevent me from getting a patent, and if not, then maybe considering filing for a patent application simply because the U.S. patent system is now a first-to-file system; so if you have a great idea and don’t file it, and in a month from now someone else does, and they file it, they will likely end up with the rights over yours.
In terms of a business, there are obviously other economic decisions to be made based on when it makes sense form a cost-perspective to make the investment of pursuing patent protection on a product. The balance between these two criteria of protecting your eureka moment as early as you can, and then also making the best business decision from an economic perspective, that balance has to be weighed out by a business owner.
Dennis Zink: What is required for a patent application?
Joseph Long: To eventually be issued as an actual patent, the invention that you’re seeking to protect in the patent application has to be useful, novel, and non-obvious. The bar for usefulness is very low because everything can be used as something essentially, so we won’t dig into that; but the novelty basically means that no one else has ever described it anywhere in any publication or offered it for sale, or put in another patent application, and that would be the entire invention with all of the elements of the invention included.
Obviousness generally deals with, “Would the new idea have been obvious to one of ordinary skill in the art, given the prior art?” The way this boils down is if there are three or four aspects of your intention that no one ever really put together before, so they are novel, this thing never existed, but these three or four different aspects exist, are well known in other publications or are already offered for sale, and all you did was put them together, then that would have been obvious to put them together, and the test that the patent office uses for that is, “Would it have been obvious to one of ordinary skill in the art?”
As for the actual patent application, obviously, you need to have this idea, which hopefully is useful, novel, or non-obvious, or else you’re barking up the wrong tree, but once you have this idea you have to have a full written description of it that is enabling, which means that it would enable one or teach one of ordinary skill in the art to make or use the invention without undue experimentation. Once you have this full description, you also have to have with it drawings of anything that you’re claiming to be part of the invention, and as well as a set of claims that very narrowly specify what the, or I should say, very specifically describe what it is that the invention entails.
Then there are also other forms that have to be filed with the patent application, such as an oath saying that you’re the original inventor, and a transmittal form, and fees, and these things are generally prepared by the patent attorney who files the application.
Fred Dunayer: I think a lot of inventors try to skirt the patent process, or the expense of acquiring a patent, by keeping it a trade secret; also, they don’t want to publish their invention because they’re afraid somebody who doesn’t care about patent protection, say in another country, might just steal it and get away with it, and just do it long enough to steal their business. Do you have any advice or thoughts on that particular situation?
Joseph Long: You are right in the question making the point that when you file a patent application, you’re making a deal with the public. You’re completely teaching everyone about your invention. You’re explaining to anyone how to make or use the invention in exchange for a limited monopoly; so, for a brief period, you get to be the only person that can make, use, sell and import it. The motivation that the public policy behind this is you are forced at the very beginning to tell everyone all about it, so people can start the next round of advancement on it, so the point of patenting from the policy perspective is to accelerate or advance technology development.
As far as wanting to avoid that and maintaining a trade secret, that’s always an option if what you’re technology entails is not easily reverse engineered. Most technical products that are mechanical, electrical, and possibly even chemical, can be analyzed to determine how to make another version of it; and a trade secret can be powerful but it’s basically just a contractual agreement amongst anyone who knows about the implementation of your technology to not tell anyone else, which doesn’t have the teeth of a patent with prevents anyone from doing it, whether they learned it from you or stole it from you or figured it out on their own two years later. The patent rights are very strong.
Dennis Zink: I want to get back to trademarks for a moment, and then relate that to a question I have about patents. Having had trademarks, and when you have a registered mark, you have to protect that mark. It’s up to you to police the mark and there’s not trademark police out there that will do it if you don’t; so, is that true with a patent as well? Do you have to send a letter out or have your attorney send a letter and say, “You know, I think you may be infringing my patent,” how does that work?
Joseph Long: It isn’t the same exactly, and the reason for that is because the purpose of a trademark is to prevent confusion of the public; so, if I’m company A and I’m allowing company B to use my trademark, and I’m not stopping them from doing it, you can understand where it’s hard for me, company A, to later claim, “I don’t want company C using it,” because I’m allowing the public to be confused. I’ve already allowed it. Protecting the public from confusion is no longer an issue; so, because trademarks have that quality, or that bar for offense or infringement based on non-confusing the consumer base, it makes it a lot different because, as we’ve discussed, the policy behind a patent is to incentivize innovators to share and publicly distribute their innovations to allow advancement and education of the public and other participants, and to reward them or incentivize them with a brief limited monopoly.
For that reason, the patent right is a little bit more analogous, almost to a real property right. In other words, I don’t have to make sure that no one else is living at my house or else I can’t come in later and charge them rent. Someone doesn’t get to own my house because they happen to have spent the night there, and that’s not a perfect analogy, because of course, there are exceptions to that on both sides, but there’s a different policy behind it. The requirement to protect your trademark is … it doesn’t really exist in patents, or to the extent it does, it doesn’t … it’s not as great of a requirement.
Dennis Zink: What is a provisional patent application?
Joseph Long: Because a patent application can be a very complicated document, and is generally expensive to prepare and there are expensive filing fees involved, there’s another alternative called a “Provisional Patent Application,” that is really just a place holder in the patent office for one year. It’s similar to a regular patent application, which we call a “Non-Provisional Patent Application,” but it generally doesn’t include claims, or at least it doesn’t have to, and it’s generally a little briefer and maybe not as formal of a document, and the filing fees are a little less.
You would generally file a provisional patent application to go ahead and lock in your filing date, because the date you file it is still the date that it’ll be considered that you’re invention arrived at the patent office, and then you have one year in which to file your non-provisional patent application; so, it holds your place in line for a year, and it provides you that one year to test the market, or to find investors, or to make sure this is a product you want to pursue. It gives you a little bit of an option, I guess.
Dennis Zink: What is the process and time line for pursuing patent protection?
Joseph Long: Speaking specifically to a non-provisional patent application, the application is prepared and filed generally by a patent attorney, and that process can generally take a month or two, depending on how long it takes to prepare it, and also how long it takes the patent attorney to interview the inventor and get all the understanding together and make the drawings and then put all the documents in place and file them. That occurs up at the beginning, and then generally, a year, or two, or sometimes even three years later, the patent office will issue a first office action on the patent application.
This first office action is generally a completely rejection. What the patent office is generally doing there is they’re finding all the prior art they can, and then essentially throwing the ball back into the court of the inventor, saying, “This is all the art I found and for these reasons these things show that your invention is not either novel … is either not novel, or that it’s obvious,” and then letting the inventor explain to them why that’s not the case. Then the inventor will then respond to that office action; generally their attorney prepares that response, and that can include having an interview with the patent examiner.
Like I said, this happens generally quite a gap after filing the actual initial patent application, and then that can happen multiple times; in other words, there can be a back and forth of these office actions and office action responses with the patent office, and eventually, if the examiner agrees with an argument that’s made or the claims of the patent have been adjusted to something that the patent examiner feels is novel and non-obvious overall of the prior art that they’ve been able to find, there will be a notice of allowance, and then the patent can issue as a U.S. patent.
Fred Dunayer: Is the patent office aware of other patents that are being filed subsequent during that waiting period? In other words, if I file for a patent and it’s going to take three years, and six months from now somebody else files for a patent which would conflict, are they monitoring that whole situation to make sure that one doesn’t get ahead of the other, or that there aren’t any other conflicts?
Joseph Long: The patent office is aware of applications that are filed and in cue at the same time, and because we have a first to file system now, the patent office would be aware of an application that was filed after another one when they were both still pending, and maybe even had not been examined yet. In that instance, the first filed patent application may be prior art against the second filed patent application, depending on the disclosure in the first one and the claims of the second one.
Fred Dunayer: Should you expect your attorney to do any of the prior art investigation, or is that totally left to the patent examiner?
Joseph Long: Usually the inventor will, on their own, do some searching of the prior art, just seeing if someone else is making the product, or maybe even looking in the patent database. Generally, they’ll have their patent attorney do a more exhaustive search on the patent database, we call this a “prior art search,” or a “patent-ability search,” and the patent attorney may also hire a search company on behalf of the client to do that. This is useful to the patent attorney and the client, while … inventor, while developing the patent application, because it helps them focus and direct their claims to things that may not be in the prior art already, which can simplify the examination process.
Dennis Zink: Are these waters only really navigable by using a patent attorney? I mean, can a layman file an application, and maybe they’re allowed to, but is that really advised?
Joseph Long: Obviously I have a bit of a bias in this, but I would say if I could go back to myself working as an engineer and an inventor before I became a patent attorney, I would honestly give them the advice to never to try to file their own patent application. I might say that you might be all right in filing a provisional patent application if you’re very, very careful, simply because it’s a little bit of a reduced complexity process, but there are still things in there that it would be good to know that I think typically an inventor or engineer wouldn’t know these things; and then also, with a provisional, you’re later going to have a patent attorney draft the non-provisional, the full patent application.
But I had mentioned that claims, which are the most important part of a patent, they are these numbered sentences at the end of a patent application and then the subsequent patent, and the claims are very important because they define … we like to say they’re “analogous to the meats and bounds on a property,” they precisely define what the invention is, and what the property of the owner of the patent owns by having the patent. Drafting of these claims is very, very complicated and it generally takes a long time to learn how to do that and what the meaning of every single word in the claim imparts into the claim.
Fred Dunayer: I would assume that if you ever have to defend that patent, and you didn’t have a patent attorney involved in the beginning, that patent attorney would have a lot of effort and expense to come up to speed with what the whole patent deals with in the first place.
Joseph Long: Yes, I mean, generally the person who would litigate a patent later down the road would not be the same person who prepared the patent simply because those are two very different specialties, so that’s less the concern, although, there is certainly an aspect of that is the bigger concern is that a pro-se application, which is one that the inventor writes themselves, they’re generally pretty weak, and the claims are generally not well drafted and will quickly become too narrow.
When you’re working on a patent application, you do get to speak to the patent examiner at the patent office, and they can advise you and guide you in a certain way, but without the experience to know how to not let them limit your patent claims too much by during an amendment process that’s … there are a lot of things that the patent attorney would know to do that would essentially end up with a more valuable patent in the end.
Dennis Zink: What are the typical costs associated with patenting?
Joseph Long: Unfortunately, patenting can be quite expensive. The initial expenses are the researching, preparation, and drafting and filing of a patent application, which depending on the complexity of a patent, these days generally ranges from $5,000 to $10,000. I’ve certainly seen ones that are more expensive than that. A very simple application can be a little less than that. A provisional application can obviously be less than that. Then, there’s also, when that’s filed, there’s a filing fee to the patent office that varies depending on the size of your business, basically; and that filing fee can be between $400 and $1,600. Obviously the smaller your company is, the less, lower that fee is.
Then, we mentioned that there’s a prosecution that takes place later where there’s office actions and response to the office actions. The preparation of those responses by the patent attorney, which may also include interviewing the examiner, those generally cost $2,000 or $3,000 a piece, and then hopefully after that happens, there will be an issued patent, and then there’s an issue fee that’s paid to the patent office between $240 and $960, depending on the size of the company; and I should note that these fees at the patent office are often changing, so don’t think that those numbers are absolute.
Then, once a patent is issued, there are maintenance fees that are paid on into the future. Unfortunately, it can be very expensive, but a patent is an asset, much like a piece of land, and especially for a technology company to have a patent on a way of doing something, or a machine that does something, or a way of manufacturing something means that no one else can do that, so it’s quite valuable, so there is a trade-off of expense to value imparted there.
Dennis Zink: How long do the patents last?
Joseph Long: A U.S, patent generally lasts 17 to 20 years, depending on how long ago the original application was filed.
Dennis Zink: What type of research can be done to determine if an invention may be patentable?
Joseph Long: The inventor of an invention will often know what type of material is out there in the field. It is important to do, in addition to knowing what’s in the marketplace; so, in other words, I might invent a new type of a, let’s say a computer monitor, and I know what they sell at Best Buy, but that isn’t the end of it. The reason why you also want to do patent-ability searches or prior art searches is because there may be some new technology that’s being developed in a university or that a company came up with several years ago and filed a patent application on that has never been brought to market. In addition to the obvious research of who’s selling what in the marketplace, doing a prior art search in the patent database, and maybe even in scholarly journals is often useful.
Dennis Zink: If you have the patent granted for a period of time, that 17 to 20 year period, and you never actually produce the product, does the patent still hold for that period? Can someone else come in and do it and say, “Well, you didn’t really do it, so I’m going to do it?”
Joseph Long: It generally does. Your rights to the patents are … there’s a presumption of validity to a patent that you actually legitimately own the patent rights if the patent has been issued to you; and there’s no requirement that you make it. If you’re not making it, and someone else is interested in making it, they may contact you to purchase a license on it, which is effectively paying you a rent or a royalty to let them use your right.
Dennis Zink: Should someone worry about infringing a patent owned by someone else?
Joseph Long: When you’re making and selling a product, it’s certainly worth at least evaluating whether you are infringing anyone else’s patents. This is important because you want to avoid the liability of having someone show up after your product has become very successful, and demand to have a percentage of your earnings on it because you’re unknowingly infringing their patent.
When you are working with a new product, you can generally ask your patent attorney to perform what’s called a “Freedom to Operate Search,” and they will go into a patent search that’s … it is a search similar to the prior art search in some sense, but it’s the prior art that comes up or the art that comes up is evaluated in a very different way; so, it’s very different from a prior art search, although, obviously it is a patent search. But really what they’re doing is looking at the claims of issued patents to see if you would be infringing them, which would then let you know whether you were at a certain amount of risk to be sued for a patent infringement for selling, or importing, or making this product.
Dennis Zink: What about international patents, how does that come into play?
Joseph Long: International patenting can be quite complicated, just because so many different countries have their own patent systems. There is one simplifying mechanism that’s available to us called the PCT, or the Patent Cooperation Treaty. One can file a PCT application, generally also through your patent attorney, and what the PCT application does is allow you to almost the way a provisional application does, hold your place and say, “I made this invention at this time. Here’s my application,” and then within a certain amount of time which is generally around 30 months, you select specific countries that you want to bring that application into, and then only at that time is your application brought to what we call the “national phase” in these different countries.
Let’s say, for example, you elect Japan as one of the countries that the application would then be sent to Japan, translated into Japanese, a Japanese patent attorney would then shepherd it through the Japanese patent system; and similarly, other countries’ applications might do that in America. Since there are so many signatory countries to the PCT, the filing the PCT application allows you to have this 30 month period before you determine what countries or what marketplaces you might seek protection in.
Fred Dunayer: Some countries, particularly third world countries, are notorious for violating patents. Is that situation getting better, and do you make any recommendations to your clients as to say, not selling their product in certain countries in order to avoid that kind of infringement?
Joseph Long: I think that it is getting better just because we’re becoming smarter as a human race, and the markets are becoming more globalized. Countries that don’t have good patenting systems or good mechanisms for litigating patents, obviously opportunistic players in those markets know it’s unlikely they’re going to have a patent infringement brought against them, so that’s always of concern. Luckily most economically advanced countries that have markets that someone making a technology would care about have reasonable or more and more reasonable patent systems as time goes on.
The issue with not selling your product in these countries that may not have as good of a patent system is somewhat irrelevant. I mean, you could still try to sell your product there because you may never have brought your product there, but someone else may bring it there is part of the problem. If you can sell it there and make some money, it’s probably not necessarily a bad thing to just avoid altogether, but it’s worth noting that someone there might copy your product.
Fred Dunayer: Well, I would just hate to see my great invention show up on eBay out of Hong Kong.
Joseph Long: Right, well, that’s an interesting point. The good thing about that is your patent rights allow you to prevent anyone else from making, using, selling, or importing your invention; so, it actually doesn’t … Let’s say, for example, you have an invention, and you only protect it in the U.S. with a U.S. patent, that means in any other country people can make and sell this invention, but they cannot sell it back into the U.S, so at least there is that protection.
Fred Dunayer: Are there any questions over the course of this discussion that we should have asked, or some territory we haven’t covered that you want to get out to our listeners?
Joseph Long: I think an interesting question that comes up a lot that … when I first talk to a new client, especially one in the early phases of business … developing their business, growing a business, is pursuing patent protection worth it? Because it is expensive, and unfortunately that is not a simple question to answer; because on one extreme, even if you don’t have a business, if you have a great idea that someone at some point might be interested in purchasing or licensing, pursuing a patent can be valuable.
On the other end of the extreme, even if your idea is not that great, or the patent that comes out will not be that valuable, but it somehow bolsters your business because it is an asset for your business, or it gives you some sort of notable benefit with, let’s say, investors or vendors, it might be worth pursuing that patent. Across this whole spectrum, there are … given all of the inputs or the factors of a particular business venture, it may be completely a waste of time and money to pursue a patent, or it may be a huge mistake to not do it, and unfortunately, they have to be weighed out on an individual basis.
But it is worth noting that there are times when it may just not be economically wise to pursue a patent simply because after you’ve spent however much it costs, let’s say maybe $10,000, you’re likely to never make more than $15,000 off of the invention. If you have that crystal ball or this is something you can dough up front just from essentially market size and the price for your product, you can make those decisions.
Fred Dunayer: I know there’s a website out there called Free Patents Online, which is likely representing millions of dollars that were spent to generate patents that have never been turned into products at all. If you were to have our listeners leave with one or two thoughts as a result of this discussion, what would those thoughts be?
Joseph Long: One important thought I would say is keep your intellectual property and its value in mind, because intellectual property is property, it’s intangible, but it has value just as tangible property does. Everyday examples are personal properties like a car, or real properties like your house and your land. Being a form of property, it shouldn’t be allowed to go to waste unless that was your intention, so if you have a brand that’s valuable in the marketplace, that that name is valuable, it’s worth considering to protect it with a trademark.
If you have inventions that are being made by engineers or even non-technical people within your company that add value to your company and may be of value to other people, it’s worth considering protecting them with a patent, or at least looking into the economics of doing it to see if it makes sense. I think because intellectual property is intangible, it’s easy to not realize how incredibly valuable it can be.
Dennis Zink: Joe, I want to thank you today for being our guest, and for enlightening our listeners about intellectual property, copyright, trademarks, and certainly patents. How may our listeners reach you?
Joseph Long: I have a website; that’s probably the easiest way to find me and information about my practice. It’s www.longtechlaw.com, and Long Tech Law is L-O-N-G-T-E-C-H-L-A-W.
Dennis Zink: Thank you again.
Joseph Long: Thank you.
Fred Dunayer: Thank you.
Dennis Zink: You’ve been listening to Been There, Done That! A podcast series sponsored by SCORE. The opinions of the hosts and guests are theirs, and do not necessarily reflect those of SCORE. If you would like to hear more podcasts, or would like information about the services we provide, you can call SCORE at 800-634-0245, or visit our website at www.SCORE.org.