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I have an Invention ... Now What?
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   showing provisional app to prospective licensee?
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Sue
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showing provisional app to prospective licensee?
« on: Dec 21st, 2005, 2:24pm »
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Is it a bad idea to show your provisional patent application to a prospective licensee?  If so, wHat is a good alternative?
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JimIvey
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Re: showing provisional app to prospective license
« Reply #1 on: Dec 21st, 2005, 3:17pm »
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I'm not sure if it's a "bad idea" in and of itself.  It's possible someone to whom you show your provisional application could try to sabotage it.  There was a fairly detailed discussion of that risk here recently.
 
I have a bigger problem with showing the provisional application to a prospective licensee -- it's not the right tool for the job.  First, I presume you're approaching a prospective licensee that doesn't currently use your idea but could use it effectively -- not that the prospective licensee is already using your idea and you want them to pay you royalties on an implicit threat of a law suit for patent infringement.  The reason this is important is that it changes the parameters of the negotiation.
 
Your patent application (provisional or a real one) represents what you hope to achieve with respect to legal rights.  That shouldn't be relevant to what you're hoping to convey to the prospective licensee.  What the licensee wants to know is: (1) what do I get out of this? and (2) what's it going to cost me?
 
You need a 5-point or fewer bulleted sales pitch sheet -- not what your idea is but what it does.  Here's an example, Stephen Key invented a label that had an open window and slid over another label -- imagine a vitamin bottle label where are the main label had an open window and rotated about the bottle to reveal all the legal disclaimers, warnings, and information on a label beneath.  
 
His sales sheet basically said -- add 75% more space for information without the use of inserts; ties seamlessly into your current labeling equipment for virtually no cost.
 
Here's an example of information of his product:
http://www.cclind.com/label_application_spinformation.html
 
So, now they know what this does for them.  How much will it cost them?  "virtually no cost" -- they'll want you to quantify "virtually no cost" and they'll follow up with "what do you want out of this?"  
 
They don't need to know how to make your idea (a requirement of the patent application), what you think your rights should be (another requirement of the patent application, real ones anyway), and they won't have time to read your full specification.  You'll lose them as soon as they read "The following sets forth a description of one or more preferred embodiments of the present invention as illustrative examples only.  The specification is not limiting.  When "and" is used herein to conjoin a collection of two or more elements, it is used to mean all of the elements together.  When "or" is used herein to conjoin a collection....."  Might as well pass your application out with a complementary Lunesta.
 
I'm guessing you have about 15-30 seconds to really pique their interest before they mentally shut down and start looking at their watches.  You sales sheet (or your "5 point sheet") should be drafted with that in mind.  And don't highlight everything -- you'll overwhelm them.  The example in the link above is a good example -- succinct, direct, and to the point.  You might want to add some market statistics to highlight the potential for total profit increase.
 
That's a much better tool for the job than a patent application.  The patent application may become relevant eventually (e.g., if they want to buy your IP rights).  But I would suggest insisting on sticking to the information they need to address the issue at hand -- whether they would benefit from licensing your idea.  They don't need to know (at least not right away) what rights you hope to get out of your patent.
 
Regards.
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James D. Ivey
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Sue
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Re: showing provisional app to prospective license
« Reply #2 on: Dec 21st, 2005, 3:35pm »
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As always, Jim, I greatly appreciate your advice.  
 
To be more specific about my situation, I have discussed my idea (which is for a medical device) with a representative of a major medical device manufacturer.  This representative initially approached my co-inventor and idea specifically to develop a certain type of medical device.  After 5 months of research, my co-inventor and idea filed a provisional.  I have since walked the representative through my provisional patent application using the figures, but not given a copy of the application to read through.  The representative now wants to pitch the idea to his higher upps, and he will be doing the market research himself as part of his pitch.  According to the rep, finding and presenting new device ideas is part of his job description, which is why he approached us in teh first place.  So the rep is now asking for an actual copy of the PPA, which I can give to him, give him part(s) of, or not...  I am not being pressured at all, but I would like to cooperate as much as possible to facilitate this process.  At the same time, I dont want to be taken advantage of, sp I am trying to gather info before I make each move.  Should I hand over the whole PPA?
 
Again, thank you very much for your time.
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JimIvey
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Re: showing provisional app to prospective license
« Reply #3 on: Dec 21st, 2005, 8:03pm »
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Oops.  You're much further along than I presumed.
 
I'll confess that, as much as I try to think of ways that it could come back to bite you, I can't think of a very solid reason not to give it over -- well, with one exception that I'll get to.  I'm hoping that the other knowledgables here will come to my/your rescue and tell you what to look out for.  Worst case, they might pose as you and forge your signature on an intentional abandonment -- but that's highly unlikely to ever be attempted, let alone successfully pulled off.  They might try to submit prior art to the patent office, but I think that's a good thing for you.
 
The one thing to consider is that you're currently relying on trade secret protection.  Do you trust them to honor your NDA?  If so, I don't see any problem that's sufficiently likely to cause enough harm to worry about.  If your provisional application meets the requirements of Section 112, p1, violation of the NDA won't cost you your patent rights, but could be annoying until your patent issues (or at least until it's published).
 
I hope that helps.  And I hope that, if I'm forgeting something, someone else will mention it.
 
Regards.
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James D. Ivey
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Sue
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Re: showing provisional app to prospective license
« Reply #4 on: Dec 22nd, 2005, 11:14am »
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One problem - many people on this board seem to talk about non-disclosure agreements as if they are a given, but a large international company with numerous subsidiaries will never sign an NDA, from what I am being told.  I can, frankly, understand their position, as they have many people who evaluate new ideas without communicating with each other, and they develop many ideas themselves in-house, so if they signed hundreds of NDAs it could really come back to haunt them...
 
I probably shouldnt let paranoia get in the way.  I filed my provisional, and I like my idea enough to follow up on it with a real patent app and maintain it for a few years anyway, so I guess there's no great harm in showing the provisional in its entirety...  It seems to me that if a large company is determined to cheat you, its probably going to be very difficult to stop them.
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