Why do you probably NOT need a patent?
"Intellectual Property" should protect a company's valuable intangibles, what I refer to as "intangible property" or "iP". It is iP that adds value to a business. Not understanding this one thing can be a serious mistake, which gives rise to so many other mistakes, when it comes to intellectual property.
Too many business owners seek intellectual property, thinking it adds value, in and of itself... That's wrong.
Intellectual property COSTS money (sometimes BIG money). It is only worth it IF...
... if the intangible property, iP, it protects adds substantially more value than the intellectual property costs.
Do you know what your iP ROI is?
Hey, Chris Paradies here.
I'm a U.S. Patent Attorney and Florida Bar certified intellectual property attorney with two decades experience. I've helped business owners go from startup to exit. Unless an IP attorney has done that, I wouldn't think much of the advice given.
Here's the truth. More than 9 out of 10 business owners don't need a patent.
When a patent attorney with two decades experience tells you that more than 9 out of 10 business owners don't need a patent, shouldn't you listen?
But this doesn't mean that you can afford to ignore all of your intangible property! And if you need a patent, you probably need a patent portfolio, and you need the best patent attorney you can afford.
But like I said, more than 90% of innovative and creative business owners don't need a patent. So, why waste your money?
The most common mistake I see is business owners wasting tens of thousands on the wrong intellectual property, while ignoring the critical iP actually should have added value BIG value!
Often, this mistake leaves a company's most valuable iP undefended, vulnerable.
Not understanding iP and how it adds value leads to the "shotgun" approach to iP.
The Shotgun Approach
Instead of being laser focused on protecting your company's most valuable iP, the shotgun approach aimlessly files patents, trademarks and copyrights wrongly thinking this adds value.
It's like throwing darts at a dartboard without knowing how the score is kept. How often will the dart miss the mark entirely?
Yet, I've heard seasoned entrepreneurs suggesting to new entrepreneurs to just ignore iP altogether, as a waste of time and money...
But more than 80% of the value of companies listed on the S&P 500 is attributed to intangibles!
The value attributable to innovative and creative businesses should be even more than the value of the S&P 500, which includes a mix of low tech and more innovative companies.
If you ignore your company's iP, your company will be worth less than one-fifth the value compared to the same company with iP owned by the company, for iP protected using intellectual property, and with reasonable attention paid to growing its value.
Should any innovative or creative business owner ignore assets that can 5X business value?
NO! Of Course Not!
But then why do many business owners, even seasoned entrepreneurs, have such a hard time understanding the value of iP?
It's not their fault!
Too many business owners don't even know what iP is.
After all, iP can't be seen or touched...
...but it has REAL value.
So, What Is iP?
Your company's intangibles may include all of its creativity, know-how, exclusive agreements, proprietary processes, employee training and good will in your brand, whether created by you, your employees or your independent contractors...
... and much, much more!
But it becomes PROPERTY only IF your company owns it!
And that IF is a BIG IF!
What happens to iP when a business owner doesn't even know it exists. I've interviewed hundreds of entrepreneurs that DON'T own they THINK they own.
If you don't own your iP, then somebody else does!
For example, a company hired a young, inexperienced developer to create an ecommerce site for a new business venture. When he finally got it up and running, after far too many delays, their ecommerce business caught on, and the venture started making good money.
However, this young developer had a day job and just didn't prove responsive enough to keep up with the changes necessary to run a successful ecommerce platform.
The Young Developer
So, the company hired more competent developers to make changes and maintain the site, AND the young developer sued.
It wasn't greed ... not really ... at least not at first ... until the young developer's attorneys got involved.
The site was his first big project -- his BABY! And he just didn't want to let it go. Then, the lawyers convinced him that he should be paid for infringing his copyright.
Unfortunately for the new business venture, it WAS the young developer's COPYRIGHTED work.
The new venture never required transfer of the copyright to the company! So, the copyright in the software running its ecommerce site belonged to someone else! It belonged to the young developer.
There was no exclusive license or work made for hire agreement either.
Sure, the company paid for development, but the copyright belonged to the developer, the author. The best the new venture could hope for was an implied license. A license a court could grant allowing the company to continue using the software, but only as it had been using it. An implied license might not allow a third party to change or improve the software.
How's that possible, howled the owners of the new venture?!? We paid him for it!
It's the law!
Under the Copyright Act, transfer of ownership in a copyright must be in writing. The transfer document is called an assignment (or a work made for hire agreement). An exclusive license might have worked too.
It should not have cost anything extra to include a work made for hire clause or assignment in the contract for the young developer's services, either, if only the company had known.
It's not like the company had to spend tens of thousands of dollars on a patent. Chances are that there was nothing patentable in the software running the ecommerce site. Sure, the agreement might have included an intellectual property ownership clause, just in case, which would have assigned all patent rights, trademark rights, copyrights and know-how, just to be on the safe side.
But there would have been little benefit in trying to get a patent on the site.
The site wasn't really all that innovative, and the parts that were somewhat innovative couldn't be determined just by merely using the service. Since users couldn't access the back end, the innovation could be protected by keeping it a trade secret -- if only the developer had signed a nondisclosure agreement!
If you want to determine if you have a patentable idea or a trade secret, why not schedule a call with Chris Paradies using the convenient scheduling link, above?
The price for a quick patent search and half-hour discussion with a qualified patent and IP counsel is only $250. There is no longer any reason to delay! If you need a patent, you really need the best patent you can get. If not, why spend thousands or even tens of thousands on something that won't add value to your company.