Patents and Ideas

I have my name on a very large number of patents across multiple nations. I have built from scratch projects, products, teams and services. So naturally often I get texts like:

Hey Mario...

"Hey, I have a startup idea that I want run through you" or "How do I patent something in the cheapest way possible" and more rarely "I am looking for an investor in my idea. Want to hear about it?"

Let's start from the last one. I am an angel investor in several ventures. Usually I invest between 25K to 100K. It largely depends on how crowded is the space and the risk level based on what is already been done. Typically on 100 "things" I hear about, 10 finally go through an informal due diligence and 1 or 2 end up in a formal due diligence process. And the survival rate of those 1 or 2 depends on what is discovered that the founders didn't know.

In those things it is paramount the most key quote of every startup-er: you don't know what you don't know. My hyper scrutiny, since I have built many businesses, usually is such that people stop asking because they know that they shouldn't ask unless they feel really ready. Most of the times people have "an idea" more than something already done. Ideas are worth nothing because the real complexity is to convert anything in success. Like a ultra validating proof of concept. And that is not a patent or even worse a PowerPoint with fancy pictures and questionable statements :-).

If you are seeking for my advice and network (Board position) or dearly earned benjamins the first step to take is not asking for what those for free. You get what you pay for and if you pay nothing...


Let me start with the good news about patents:
  • Filing one is as cheap as ~200 dollars if you do everything on your own
  • Once they have been published you can enforce them on anyone that is infringing your claims
  • You can license your patent and make money every time it is used
  • You can sell your patents on a marketplace on your own in lump sum
  • Or you can sell/licence your patent via a brokers
Now... the not so sweet things about patents:
  • The patent office does "some basic checks and balances" when you submit. They don't guarantee that your patent will not be invalidated or exposed to litigation. Many agree that the USPTO should be reformed because it only enables who has money or already a strong position in any litigation, it doesn't protect inventors in the way it appears to be intended.
  • The strength of your patent depends a TON from the quality of its claims. If you leave room for interpretation even the if the US patent office approved it, you leave room for another inventor to expand on that not fully expanded claim and obtain a patent with more narrow strength. Or worse you enable litigation that is usually won by the largest pocket in the room.
  • The fact that you have a patent means absolutely nothing if you don't have the resources to defend it when the patent is infringed or someone else (legal entity or individual) claims that your patent is invalid or there is something wrong with it.
  • Sure you can sell or license your patent but the number of sharks out there that can take advantage of you in that situation is HUGE. And the fact that they advertise on CNN it doesn't mean shit. It's a shark tank :-)
Now, if you have not been dissuaded by the cons list, let me tell you how you can get started.

The regular way or Golden advice
If you can afford a patent firm/attorney don't waste your time and usually the equivalent amount of money in micro cheap efforts because the quality of your patent determines how stronger will be your position when challenged or infringed (case in point at the time of this writing). 

The cheaply way
Once you determined what type of patent you are going to file (Design for anything estetic and Utility for anything else) you follow the US patent office steps and you are golden. The submission is really cheap, in most cases for about US$200 you can file and be done with it. If the form you file has one tiny tiny thing off, like format, drawings or the right sentence in the wrong place they are going to reject the application and you will have to re-apply again spending the same identical amount you spent the first time.

For this reason at beginning when I was learning how this patent world works I have been using Legal Zoom. A few things about that company, from which I get no kickbacks or any particular benefit of any kind, are important to know. They are a facilitator service. Basically during a series of questions asked via a tool they make you think and ultimately use your answers to generate the document that they will be uploading with the USPTO. They don't improve the quality of your answers, they don't point you to potential flaws they make sure that your application doesn't get rejected.

So... if you have done your homework in deep and wide angles then you are going to provide to any service of the kind of Legal Zoom material that will get accepted at the time of the filing and eventually will stand a chance when it gets examined by the clerk at the USPTO.

In my experience Legal Zoom kind of service saves you a ton of money to get a patent pending status for your idea but you should use it only if you absolutely master the domain your patent is expected to be applied.

There are all sorts of weird things patented out there and it doesn't matter if there's a matching product attached to it or now. If someone can troll you with a letter telling that your patent is infringing their existing patent. They will.

And when you get that type of letters, you want to respond otherwise you set the stage for being trolled more and because in the noise you don't know which troll will end up be a Trump like man, you will end up living for years that you had a patent when in reality you just had good feelings about it :-) With a DIY solution you end up in a battle field with no armor. Your mileage may vary.

The mother of the trolls is always pregnant and so their trolling actions are guaranteed. Don't fall victim of your own cheapness.

How do I do it?
When I was in a stage of my life that I the trade off was between keeping the lifestyle and investing in my own ideas I used things like Legal Zoom, Stephen key type of people. After selling a couple of patents I realized that what looked an awesome inventor jump ultimately was enabling others in making 100x what I was making. So abandoned that way of getting patents in the field.

I start finding local and small patent firms and they worked really good for me. In one occasion I HAD to work with a very large pattern firm. The experience was like one of the worst symbols you see on Yelp. $$$$$ (Yes, that is FIVE $!) -- The steps were the same of the small companies but built to bill you as many hours as possible not because they want to exploit you but because of their own bureaucracy internally.

After doing it so many times over the years. I found a patent designers (they are ones they make those pretty b/w pictures) that I trust and I learned how to create the base notes that the patent lawyer needs to develop the claims structure. I have become very familiar with the patent examining procedures as well. The more hyper clean are those notes the less it will cost the patent at the end.

I used to leverage the patent pending status of a lot because it was helping in raising money for ventures with less informed angel investors. However, nowadays that status, particularly with VCs gives you absolutely no leverage. The first question they will ask "is it published?". You don't want to answer that question "it's pending but we believe...". Yah... you lost them, you just don't know it yet :-)

I wrote this article for all my friends and in particular because one of my dearest this morning asked for. So from now on when I get asked the question I will send them the list to this page. Thanks Pierre for saving future time :-)


Popular posts from this blog

Postgres on Synology

The Making of Basculo

Build an independent watch app - Part II