It’s a common misconception that product developers have to immediately find representation and patent their designs and concepts in order to protect their IP; it’s understandable since inventors acting independently or within small companies cannot afford to lose time or lose trust in the few resources they have. Patent lawyers are bound to confidentiality by federal regulation as stipulated in 37 C.F.R 11.106, and even in 37 .C.F.R. 11.118(b) for prospective clients. Confidentiality is important to guard IP, but it’s more important to understand the product’s development and the best approach to patent their product.
The top 3 rookie mistakes that we’ve encountered are the following:
1. Inventors seek patenting too early before they have engineered the invention
Rich Goldstein, author of “The ABA Consumer Guide of Obtaining a Patent”, wrote on the many reasons (i.e: fears, pressures, and opinions) that inventors may be misguided for applying for a patent:
“Here’s where we can begin separating myth from reality: having a patent does not give you the right to legally make your invention! Said differently, having a patent is not a requirement for you to make or sell your invention! What a patent can do, however, is give you the right to stop others from making, using, or selling it without your permission. Now that this is clear, we can take a look at whether the ability of a patent to stop others from making, using, or selling your invention is important enough to your goals to justify your decision to patent it.”
The problem with patenting too early is that in the long-run, it may prevent further improvements upon the product. Filing too early could impact companies finding support for claims that their text or drawings made when they had first filed. As well, they would be unable to make adjustments or amendments to their product’s design since they shot the gun too soon (into their foot) by the original language in the application. Later developments upon the product may not be covered; especially so if companies file patents in countries like Japan or China that have much more stringent adherence to the earliest-filed patent application.
2. Inventors do not prototype their product before patenting
Related to the first point mentioned, there’s a certain ambiguity to forecast how much money will be needed throughout the development process. Just like companies may not be able to predict changes to their design and a failure to cover those charges during manufacturing, they may be too short-sighted to price their product once it’s in the market. Predictable Designs mentions that a design may not have been worth pursuing in the first place when the product may cost $75 to manufacture and the company sells the product for $99 making it unprofitable.
3. Inventors tend to not effectively utilize NDAs
It’s important to have an NDA in place before hiring new employees, approaching manufacturers, and other parties that will have a closer look at the secret sauce, but a company has to be mindful of the terms of engagement and what technically is and isn’t considered confidential.
It’s overkill (let alone “naive”) to label everything within a product as confidential. IPWatchdog.com has an excerpt of how to define the protected information:
“Technical and business information relating to Discloser’s proprietary ideas, patentable ideas copyrights and/or trade secrets, existing and/or contemplated products and services, software, schematics, research and development, production, costs, profit and margin information, finances and financial projections, customers, clients, marketing, and current or future business plans and models, regardless of whether such information is designated as ‘Confidential Information’ at the time of its disclosure.”
Therefore, inventors have to structure their NDAs within reason and not to be considered too broad in order to avoid being deemed unreasonable by courts. Such in the case of Lasership, Inc v. Belinda Watson and Midnite Air Corp, the court found in favor of the defendant finding that Lasership’s employment contract and NDA had gone overboard on their provisions.
Before filing a patent application, we recommend companies taking these 3 steps:
In our experience, we have been able to engage with companies that come with a concept and need renderings to prove their idea to investors. One example includes our work with Mizuho America Inc.; we were able to engage with the team after having signed an NDA, evaluated their concept, and consulted about patenting after we helped with prototyping. In the end, their initial design did not function or look like the end result!
To summarize, it’s ideal that inventors consider the development of their product as an ongoing, changeable (possibly unattainable) project. Confidentiality and protecting ideas are important, but filing for a patent should not be the first step in the journey.
Mistakes Companies make
The top 3 rookie mistakes that we’ve encountered are the following:
1. Inventors seek patenting too early before they have engineered the invention
Rich Goldstein, author of “The ABA Consumer Guide of Obtaining a Patent”, wrote on the many reasons (i.e: fears, pressures, and opinions) that inventors may be misguided for applying for a patent:
“Here’s where we can begin separating myth from reality: having a patent does not give you the right to legally make your invention! Said differently, having a patent is not a requirement for you to make or sell your invention! What a patent can do, however, is give you the right to stop others from making, using, or selling it without your permission. Now that this is clear, we can take a look at whether the ability of a patent to stop others from making, using, or selling your invention is important enough to your goals to justify your decision to patent it.”
The problem with patenting too early is that in the long-run, it may prevent further improvements upon the product. Filing too early could impact companies finding support for claims that their text or drawings made when they had first filed. As well, they would be unable to make adjustments or amendments to their product’s design since they shot the gun too soon (into their foot) by the original language in the application. Later developments upon the product may not be covered; especially so if companies file patents in countries like Japan or China that have much more stringent adherence to the earliest-filed patent application.
2. Inventors do not prototype their product before patenting
Related to the first point mentioned, there’s a certain ambiguity to forecast how much money will be needed throughout the development process. Just like companies may not be able to predict changes to their design and a failure to cover those charges during manufacturing, they may be too short-sighted to price their product once it’s in the market. Predictable Designs mentions that a design may not have been worth pursuing in the first place when the product may cost $75 to manufacture and the company sells the product for $99 making it unprofitable.
3. Inventors tend to not effectively utilize NDAs
It’s important to have an NDA in place before hiring new employees, approaching manufacturers, and other parties that will have a closer look at the secret sauce, but a company has to be mindful of the terms of engagement and what technically is and isn’t considered confidential.
It’s overkill (let alone “naive”) to label everything within a product as confidential. IPWatchdog.com has an excerpt of how to define the protected information:
“Technical and business information relating to Discloser’s proprietary ideas, patentable ideas copyrights and/or trade secrets, existing and/or contemplated products and services, software, schematics, research and development, production, costs, profit and margin information, finances and financial projections, customers, clients, marketing, and current or future business plans and models, regardless of whether such information is designated as ‘Confidential Information’ at the time of its disclosure.”
Therefore, inventors have to structure their NDAs within reason and not to be considered too broad in order to avoid being deemed unreasonable by courts. Such in the case of Lasership, Inc v. Belinda Watson and Midnite Air Corp, the court found in favor of the defendant finding that Lasership’s employment contract and NDA had gone overboard on their provisions.
Steps to properly start the product development process
Before filing a patent application, we recommend companies taking these 3 steps:
- Take invention hand drawings and rough garage prototypes to a proper research and development design firm.
- Have the firm sign NDAs to protect your idea.
- Provide the firm with all necessary data and documents in order for them to develop an engineered design for prototyping and testing.
In our experience, we have been able to engage with companies that come with a concept and need renderings to prove their idea to investors. One example includes our work with Mizuho America Inc.; we were able to engage with the team after having signed an NDA, evaluated their concept, and consulted about patenting after we helped with prototyping. In the end, their initial design did not function or look like the end result!
To summarize, it’s ideal that inventors consider the development of their product as an ongoing, changeable (possibly unattainable) project. Confidentiality and protecting ideas are important, but filing for a patent should not be the first step in the journey.
