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   Author  Topic: Lots of "Patent Professionals" Advice...  (Read 4161 times)
JimIvey
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Re: Lots of "Patent Professionals" Advic
« Reply #5 on: Sep 6th, 2005, 10:45pm »
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on Sep 6th, 2005, 4:05pm, ValueProducts wrote:
Let's take your steps in MY direction.
1. I come up with an idea for a flatulence-powered cigarette lighter shaped like a pair of butt cheeks.  A sure-fire seller in some markets!
2. I spend 3-5 years and $10,000 getting  a patent for my cigarette lighter.
3. I am fully protected!
4. I sell my lighter to XYZ Crap, Inc. who manufactures it for $.34 in China, and sells it for $2.99 in Walgreen's and maybe a few other purveyors of fine crap (the Holy Grail being WalMart...but let's pace ourselves).
5. I get some up-front money and a 3-8% royalty on every lighter they sell (more likely 5%).
6. They sell, oh, 10,000 of them during the life of the product (maybe a year). I pocket about enough to take a quick trip to Vegas as long as I stick strictly to the one-armed bandits!  
7.  Maybe, 2 years from now, they will re-introduce my lighter and I'll pocket another couple of grand.  Maybe it will become a permanent seller at Walgreen's and every year for the next 25, I'll get a royalty check fully big enough to treat me and 1 of my closest friends to  dinner (with ALL the trimings!) at Mr. Steak!

Okay, let's look at the scenario without a patent.
 
1. You come up with an idea for a flatulence-powered cigarette lighter shaped like a pair of butt cheeks.  A sure-fire seller in some markets!
2. skipped
3. skipped
4. You show your lighter to XYZ Crap, Inc. who manufactures it for $.34 in China, and sells it for $2.99 in Walgreen's and maybe a few other purveyors of fine crap (the Holy Grail being WalMart...but let's pace ourselves).
5. You get no up-front money and no royalty on every lighter they sell.
6. They sell, oh, 10,000 of them during the life of the product (maybe a year). You pocket ... nothing.  
7.  Maybe, 2 years from now, they will re-introduce your lighter and you'll again pocket ... nothing.  Maybe it will become a permanent seller at Walgreen's and every year for the next 25, you'll get ... nothing.
 
What is a license?  A license literally means permission.  The manufacturer pays you for your permission when they need it.  Why do they need your permission to make your lighter?  
 
Are patents a panacea?  Of course not!  But not because they're not needed to encourage others to pay royalties.  They're great for that.  What people most often fail at is convincing someone to make and/or sell their farting cigarette lighter.  Most manufacturers wouldn't bother, even if you didn't ask for a royalty.  Your idea has to add value -- enough value to go around, and you have to convince others of that.  That's why patents aren't a panacea.
 
Take a look at this and tell me if it helps:
http://www.isrlaw.com/inventorFAQ.html
 
But, hey, don't take my word for it.  Go ahead and talk to companies.  Ask them what sorts of things they'll license and under what conditions.  Not all markets/companies are the same.  Some pay for idea even without patents.  Others don't.  Know your market.
 
Regards.
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Re: Lots of "Patent Professionals" Advic
« Reply #6 on: Sep 9th, 2005, 7:47am »
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[quote author=JimIvey   ...5. You get no up-front money and no royalty on every lighter they sell.
6. They sell, oh, 10,000 of them during the life of the product (maybe a year). You pocket ... nothing.  
7.  Maybe, 2 years from now, they will re-introduce your lighter and you'll again pocket ... nothing.  Maybe it will become a permanent seller at Walgreen's and every year for the next 25, you'll get ... nothing.
 
What is a license?  A license literally means permission.  The manufacturer pays you for your permission when they need it.  Why do they need your permission to make your lighter?  
 
Are patents a panacea?  Of course not!  But not because they're not needed to encourage others to pay royalties.  They're great for that.  What people most often fail at is convincing someone to make and/or sell their farting cigarette lighter.  Most manufacturers wouldn't bother, even if you didn't ask for a royalty.  Your idea has to add value -- enough value to go around, and you have to convince others of that.  That's why patents aren't a panacea.
But, hey, don't take my word for it.  Go ahead and talk to companies.  Ask them what sorts of things they'll license and under what conditions.  Not all markets/companies are the same.  Some pay for idea even without patents.  Others don't.  Know your market.
Regards. [/quote]
 
Jim,
I think your scenario may be just a tad self-serving.  As an attorney, you surely know what a strawman argument is.  
 
For example, #'s 5, 6 and 7:  I'm not sure why (and you don't explain it) you would sell your product for nothing.  Could you explain how/why that works in a free market capitalist system?
 
A license means you (inventor--party of the first part in lawyerese?) SELL the "idea" if you will to a legitimate (key term) manufacturer of such items as our flatulence power cigarette lighter (FPCL).  
 
Why do they need your permission?  Simple: you (seller) present the idea (intellectual property) to a legitimate (toldja it was a key term!) manufacturer/marketer of like items, they PAY you for it with some upfront cash and ROYALTIES agreed to through a CONTRACT.  
 
Again, this does not apply to that water-powered internal combustion engine. Such things DO require patenting. The FPCL will not change the world, and I would be very surprised to find that even .00000000001% of all those who will ever visit this site are inventing the former as opposed to developing the latter.
 
The mfg'r needs your permission to produce and sell your FPCL for two primary reasons:
 
1. Because YOU developed it.  Contrary to popular belief (a belief not particularly discouraged by patent attorneys), not every (US/Canada) mfg'r is run by a Simon Legree, sitting in a darkened room twirling his greasy moustaches just waiting to rip off some naive Pollyanna presenting the next FPCL.  They rely on "inventors" who SELL their ideas to them, inventors who sufficiently paper their trails to be sure, which leads us to reason,
B. With apologies, such companies like lawyers even less than the rest of us.  If you maintain a fairly tight record of your invention as being yours, if, after you present it to S. LeGree Corp. they still steal it, you can, even without a patent sue and expect to recover.  Intellectual property, even when not patented, still belongs to someone until they sell it to the "inventor."    
 
Codicile: the mfg'r may also want to keep you happy because they know that most "inventors" have a slew of ideas for crap like the FPCL drifting around in their heads.  If they screw you on the FPCL, you are (probably) unlikely to present them with your next idea.  
 
You don't "ask" for royalties.  You expect them and in fact, through something called a "contract", demand them. Only a fool would simply send his/her idea off to Mssr Legree without some protection.  Such contracts also give you the right to review the books, etc., to be sure the royalties are forthcoming and accurate. This is all boilerplate stuff widely available that mfg'rs and inventors have been using for decades.  The monstershouting you do here Jim is, again, more than just a tad self-serving.
 
Finally, yes, you do take some risk in perusing this expedited route rather than patenting first, then attempting to market.  Personally, I think the paired risk of theft vs. marketability of the product sort of cancle each other out (again, when not talking about an earth-shaking invention).  Moreover, what's better, taking that risk or sitting hunched over your invention in paranoid terror until someone else "invents" it, or taking the minimal risk of presenting it to Mssr. LeGree?
 
And you have yet to tell me: why go to the expense and take the years it takes to get a patent without even an inkling of whether your product will even sell.  Today, with the speed of technological advancement, with many developments, you run the riks of being out-by-time by the time your patent is secured (3-5 years).   Companies that BUY such things every day of the year, will assess FOR you it's marketability, patent it (for themselves, while PAYING you for the license to then sell it) and essentially remove the need for your chasing patents AND engaging in amateur marketing.
 
I realize you are protecting your own rice bowl here, but I think the pluse/minuses of BOTH sides need to be explored.
 
Best,
Mike
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Re: Lots of "Patent Professionals" Advic
« Reply #7 on: Sep 9th, 2005, 8:35am »
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Mike -
 
You may be confusing copyright, trademark, and trade secret laws with patent laws.  You wrote:
 
    If you maintain a fairly tight record of your invention
    as being yours, if ... S. LeGree Corp.  [steals] it, you
    can, even without a patent sue and expect to
    recover.  Intellectual property, even when not
    patented, still belongs to [the inventor] until they sell it
 
If by invention you mean a process, machine, manufactured article, or composition of matter, and you have publicly disclosed your invention, then you are mistaken.  Unlike written works, songs, trade marks, etc., if you do not obtain patent protection for an invention, then you do not inherently have ownership.
 
In the U.S. and a few other countries there is a one-year window after public disclosure of an invention to apply for a patent.  While it might be a risky strategy, you could try to sell your invention, and if there appears to be interest, apply for a patent not more than 365 days after the first public disclosure.
 
 
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Re: Lots of "Patent Professionals" Advic
« Reply #8 on: Sep 9th, 2005, 9:54am »
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ValueProducts,
 
You've made some valid points here, but I think you are missing the point of this forum. This forum is more about intellectual property law and practice than the business of patents.  
 
For the most part, patent attorneys are not experts on whether or not an inventor SHOULD obtain a patent. I think most patent attorneys are pretty much up front about this. A patent attorney can offer advice and opinion as to whether or not it is possible to obtain a patent, or what sort of patent protection is possible, but the decision whether or not to seek patent protection must ultimately be made by the the inventor. The job of a patent attorney is to get a high quality, valid, and well-written patent patent issued.  
 
Do most inventors waste their money obtaining a patent? Yes. Do most people who open a restaurant waste their money? Absolutely. Do most people who start any small business waste their money? You bet. It is the nature of business.  
 
I have rarely seen a business idea fail because the inventor invested in obtaining a patent. I've seen lots of inventors who waste their money on patents, but the business usually fails because the business idea or business model is flawed. The money spent on obtaining a patent might speed up the demise of the business, but it is never the cause of failure.  
 
On the other hand, I have many times seen a business fail because the inventor failed to obtain proper patent protection. Very few patents are actually licensed. The vast majority are used to enforce the period of exclusivity during which time a small business has the chance to fail or succeed on its own merits.  
 
You can't blame patent attorneys for the business mistakes made by inventors.  
 
My rice bowl is helping inventors decide whether or not obtaining a patent makes sense. I don't prepare and prosecute applications for patent because that is a different expertise requiring different skills. I have done this in the past, and I try to keep myself abreast of developments in the law, but I focus my efforts on the business aspects of patents and licensing. I have too much respect for the difficult job that patent attorneys and agents do to think I could do it as well on a part-time basis.  
 
Regards,
 
Eric Stasik
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JimIvey
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Re: Lots of "Patent Professionals" Advic
« Reply #9 on: Sep 9th, 2005, 12:23pm »
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on Sep 9th, 2005, 7:47am, ValueProducts wrote:
... A license means you ... SELL the "idea" if you will ....  
 
Why do they need your permission?  Simple: you (seller) present the idea (intellectual property) ... through a CONTRACT.  

First, an "idea" is not intellectual property.  Proving you invented first is absolutely worthless (unless you also happen to pursue a patent).  Perhaps you've been mailing yourself a lot of invention disclosures -- absolutely worthless.  Search the archives here for "poor man's patent" (or something like that) for more details.
 
Second, when do they sign the contract, before or after you tell them your idea?  If before, you're talking about a trade secret and that discussion can be held in the Trade Secret forum.  You've also got the problem that most potential licensees really don't like signing NDAs.  If after, you're screwed.  You've got no basis for protection of your "idea" without patent, copyright, trademark, or trade secret protection.  Having an idea first, without more, will get you absolutely nothing.
 
on Sep 9th, 2005, 7:47am, ValueProducts wrote:
The mfg'r needs your permission to produce and sell your FPCL for two primary reasons:
 
1. Because YOU developed it.  

Perhaps voluntarily.  I said that in an earlier post in this thread.  But the law doesn't address what happens when people just get along.
 
Legally, "Because YOU developed it" doesn't mean squat.
 
on Sep 9th, 2005, 7:47am, ValueProducts wrote:
B. With apologies, such companies like lawyers even less than the rest of us.  If you maintain a fairly tight record of your invention as being yours, if, after you present it to S. LeGree Corp. they still steal it, you can, even without a patent sue and expect to recover.  Intellectual property, even when not patented, still belongs to someone until they sell it to the "inventor."  

Now this is a fascinating legal theory.  Please explain under what cause of action you'd sue.  Not a patent, not a trademark, not a copyright, not a trade secret .... an idea!  Go ahead and try that and keep us posted on how that works out for you.
 
on Sep 9th, 2005, 7:47am, ValueProducts wrote:
Codicile: the mfg'r may also want to keep you happy because they know that most "inventors" have a slew of ideas for crap like the FPCL drifting around in their heads.  If they screw you on the FPCL, you are (probably) unlikely to present them with your next idea.

I said that, too.  "Know your market."
 
on Sep 9th, 2005, 7:47am, ValueProducts wrote:
And you have yet to tell me: why go to the expense and take the years it takes to get a patent without even an inkling of whether your product will even sell.

It's been said here and elsewhere over and over that not all ideas are good candidates for patents.  However, if you're not going to go about bringing your idea to market yourself (by using or forming your own business entity) and instead you hope that someone else will pay you to do that for you, you must have some means of preventing that someone else from cutting you out -- or rely on the kindness and goodness of that someone else.
 
on Sep 9th, 2005, 7:47am, ValueProducts wrote:
I realize you are protecting your own rice bowl here, but I think the pluse/minuses of BOTH sides need to be explored.

I'm not protecting anything here other than protecting against the spread of misinformation.  Yes, people can go forward without IP on their ideas.  We just explain the risks of doing so and, alternatively, how to get IP on an idea.
 
I think the bottom line is this:  you're right in that not all ideas warrant a patent.  However, I think you're mistaken on some fundamental aspects of how to go about commercializing an idea without a patent.  If you think you know how to do it, go for it and let us know how it works out.  If you have questions about how to go about it, ask them and we'll try to help.
 
Regards.
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