What entrepreneur looking to hit it big is searching for that next “patentable” idea. Thoughts of unending royalty streams pouring into your bank account, the opportunity to create generational wealth and leaving your indelible mark on humanity all make obtaining that next big patent an irresistible and worthy goal.
On the flip side, history is riddled with brilliant minds who broke new ground, and swiftly had their inventions stolen out from under them because they failed to secure the right patent at the right time. Women and minorities have been particularly vulnerable to this throughout history. A 2013 MotherJones article titled, Ladies Last: 8 Inventions by Women That Dudes Got Credit For, cites seven women in history who broke new ground, inventing everything from the ability to solve mathematical equations using computers to the iconic Parker Brothers’ game, Monopoly.
The when, why and how attached to patents can make or break your dream of turning that lightbulb idea into currency. The costs associated with patenting your technological or creative boon, successfully bringing your product to market and compelling larger companies to come to the table and negotiate a royalty deal rests in how you proceed.
Below is a “How To” guide for successfully navigating the world of patents.
Master the Art of Trend Forecasting (or Onboard Someone to Do it For You)
Staying ahead of market trends in your industry, and forecasting what will be in demand in the coming five to ten years is a non-negotiable skill. Having a team member whose sole job it is to forecast industry trends and bring them to your attention for potential patentability and profitability is key.
Determining if Your Idea is Patentable
There are some key questions regarding patents that must be answered before moving forward. The questions below will establish patent viability:
Does my idea meet a specific demand?
Does my idea solve a current or emerging problem?
Is my idea in line with where my industry is going?
After answering the above questions, onboarding a seasoned patent attorney who can act on your behalf to do proper research, filings and acquire a patent from the U.S. patent office would be your next step.
There are different classifications of patents, including but not limited to; provisional patents, utility patents and design patents. Your attorney should be able to advise you on which type of patent to use. Another important patent classification to take note of is a “Closed” patent versus an “Open” patent. If your plan is to be able to augment an existing patent in the near future, using claims, you will want to file for an Open patent. If you choose to file for a Closed patent, you will not be able to add to that patent simply by filing a claim. You will have to acquire other patents through a legal acquisition process in the case of a Closed patent, to add the original patent.
A patent attorney can advise on whether an Open patent or a Closed patent is the right decision for your idea or invention.
Know Your Path to Monetization
A solid strategy for monetization equals potential profitability. Patents can be licensed, sold or directly brought to market. In certain cases, parties that infringe upon your existing patent can be converted into licensees. The best-case scenario is a licensee whose sole job it is to monetize your patent on your behalf.
Options for Choosing a Patent Attorney or Going it Alone
The most seamless way to file patents correctly is to have an experienced attorney assist you in the entire process. The most effective way to find the right patent attorney is through your personal or professional network. Seek referrals for an attorney if one is not available directly available to you.
The most important element is an attorney that has relevant experience and a proven track record in delivering results. Ultimately, you get what you pay for. Avoid paying any fees upfront until you have an idea of the track record of the professional that you are using. And beware of professional stall tactics which elicit fees before anything tangible is delivered.
Alternatively, you can search AmericanBar.org to locate pro bono intellectual property attorneys in your area to see if there may be a pro bono patent attorney who is able to conduct research on your behalf and assist you in filing your patent. The website Nolo.com provides some step-by-step How To information for those who choose to apply for their patent directly through the United States Patent and Trademark Office.
Bringing Large Companies to the Table (Negotiating Your Royalty Deal)
A patent provides a means to protect your intellectual property. Your attorney’s goal is to establish barriers to entry, wherever you intellectual property is infringed upon. The end game is to establish licensing relationships, whereby other parties pay for the right to use your patent/intellectual property. This party (or parties) would be serving as a licensee of your technology/intellectual property.
Not for the faint of heart, many licensing agreements are born out of litigation or the assertion to litigate. Your patent attorney will act against anyone that may be infringing upon your intellectual property rights. Once this precedent is established, your attorney should be ready to initiate litigation proceedings to bring anyone to the table that might be infringing on your technology. One possible outcome of litigation is that the infringing party or parties would then negotiate to legally use your technology by licensing it. Licensing means royalty income streams.
Licensing Your Patent and Collecting Royalties
Your team, including a knowledgeable patent attorney, will This not only creates a revenue stream, but also ensures that there is an on-going process of adding additional intellectual property to the original patent, creating a perpetual licensing income stream. This methodology not only adds value to the original patent but creates opportunities for licensing to additional companies.
Companies approached may be multi-billion-dollar behemoths. It is only by following the methodology above can a company blunt efforts to take their technology and can proceed forward to prosper in the ultra-competitive world of patents.
If using an open patent, then additional intellectual property can be added using claims to add more intellectual property to the patent. Other ways that patents can be added to your financial portfolio is through acquisitions – in plain English, buying up other people’s patents. This is typically a way of adding additional intellectual property to a patent portfolio (collection of multiple patents). This is the primary methodology that is utilized when dealing with a closed patent. A technology belonging to a third party is identified, they are contacted, an agreement is made for the acquisition of the stated patent.
How does a startup use this information on their business strategy?
The preliminary business strategy must be based upon addressing a need or solving a problem. This provides into a place for this product within the current market. It also addresses a potential need that might also arise as the marketplace evolves.
The information above will guide how you take the technology to market, monetize or even deal with competitors within the market space. How to build a team that allows you to capitalize on patents. Most importantly within the business strategy is a focus on team building which will allow for the completion of all components associated with the getting a patent and monetization. Team building is essential for creating patents.
Patents and A.I. Technology
A.I. allows for more information to be gathered for your end customer. More information can be gathered to create a truly personalized experience that meets the needs of the individual consumer. More devices will inevitably be connected to the internet that feed information to the A.I. on the user preferences, needs and wants (Samsung – allows you to connect 250 devices). Along with the AI expect faster access to the internet. More information gathered over a shorter time.
Based on increased information the technology will be able to anticipate what you need. The technology becomes an extension of the individuals need, wants and expectations.