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Capital to secure patent and start business?
3

Capital to secure patent and start business?

Capital to secure patent and start business?

(OP)
I'm investigating a few invention ideas I have, of which I am interested in patenting.  I would then either be interested in marketing the product myself or offering the IP up for sale to a larger company.  Can anyone give advice on this type of situation?  I surely cannot afford a patent attorney at this time, and I get conflicting reviews on how much money it actually takes to file for patent.  How do individuals not backed by a corporatation go about obtaining patents?  Better to make yourself or sell license?  Please share your experiences.  Thanks.

ChemE, M.E. EIT
"The only constant in life is change." -Bruce Lee

RE: Capital to secure patent and start business?

Patents aren't cheap, but the USPTO does lighten the load somewhat with reduced rates for small entities.

Start with an application to get your foot i the dor.  Also, a patent search is in order to make sure our idea isn't already patented (don't be too surprised).  You may be able to find a decent patent atorney who will let you do some of the legwork to save $$$.  Also, if you market your stuff before you apply, it is no longer patentable.

As for raising capital, it's the same old song: beg, borrow, or share.  In any ase, you will need a good business plan to get any sane parties (banks, venture capitalists, gullible relations) to part with their cash.

My dad started a business based on a couple patents and some wealthy and willing friends for investors.  (See <http://www.biax-fiberfilm.com>.)  It can be done.  Don't forget your investors.  They aren't donating to charity.  They will expect performance and a share of the profits.

I could be the world's greatest underachiever, if I could just learn to apply myself.
http://www.EsoxRepublic.com-SolidWorks API VB programming help

RE: Capital to secure patent and start business?

I think that in the US you may get a patent lawyer on side for a share of the profits (no win no fee?).

In other countries the situation will be different.

I personally have a different view of the patent situation.

To my mind a patent is only worth the money you can afford to spend in litigation protecting your product, it is not a protection in itself, at least, not much. If you don't protect it no one else will. It isn't as if you can report infingements to the authorities and they will prosecute for you.

In fact, since some companies spend significant sums on patent searches and taking out a patent may actually make things worse by publicising the idea before you are placed to gain sufficient revenue to defend to defend it. Remember, there is a long way between the idea and sales. You may need tto protect the idea during this time by other means and protect the working life of the patent.

If you can bring your product to market by yourself then it doesn't automatically mean it is the best route to success, though there are plenty of examples of successful entrepenuers who have done this.
Sometimes the success of a product is time to market and the ability to match supply to demand. A small start up company may find this difficult for others it is no problem to scale growth to the growth in market demand.

If you have or can acquire all the necessary skills, personel and an infrastructure to successfully manufacture and sell the product, go for it; especially if you have found a niche with no direct or imediate competition. However, if there is a need for your product then there is probably something established that provides a partial solution. It may be far better then to defuse your competition by licensing them to manufacture and market under their brand name.
Not always a sure fire approach; look at Dyson and his confrontation with Hoover, for example. His initial problem was they weren't interested so he decided to manufacture himself; nothing grabs attention like competition, so then they became interested and have spent more money, probably, on finding ways round his patents than if they'd licenced the design from him and on infringement suits.

This "not invented here" syndrome is common.
For some years I touted around a new Vortex meter design and was usually told that it wouldn't work or be practical  or useful but nevcer that it "wasn't invented here". To be fair, in some cases the reasons for not wanting to take the design were strategic. If your product is too close to one they already have, then they may wish to protect their investment but not taking your idea on board and trusting no one esle will either.
However, one company I offered it to had the grace to copy me, with an appology, a copy of a recent research project at a US university that basically "re-dicovered" what I'd already done.

I have another meter design under consideration with a manufacturer under a confidentiality agreement. It may yet go nowhere but I have learned something from my previous mistakes. Your idea is a product like any other and needs to be "sold" and marketted just right.

The value of a patent to me? none. It would have been money spent to publicise the idea to others. Better for me to get a manufacturer interested and then use their skills to build a better patent than I could or a patent lawyer could (you can't expect them to be technically competent).

Much depends on what your product is and what you expect from it.

If it is something you can afford to bring to the market yourself, you may feel that patent protection is an essential to give some protection against the more ethical companies, you may find you have none that you can afford, against the unethical.
 
For the others, you may find that you just have to accept that your idea will be copied and live with it, or at least, with the share of the market you can access for yourself. Of course, you may find a patent lawyer ready to take an infringement case on a contingency fee.

If you don't patent, no one else can once you are in the market (public domain) except if they think up a new angle they can patent and thus deprive you of the opportunity to profit yourself. You might also look and see if you can have other protection such as copywright or trademark. Sometimes the best protection is to build sales and brand recognition and rely on the loyalty of your customers for your profit.


The key point is that nothing is going to guarantee you a monopoly for the life of the patent. If its really good and profitable then some one else with either ignore your patent or find a way round it "so sue me". It may costyou more to defend than it ever makes in profit. However, a patent is not itself an expensive option and when you should get it is probably more important than if. After that it's upto you how you use the patent.

In any event the best course is research.

There are plenty of "inventors" societies available to provide general advise and many are on the web. Some patent agencies also "suggest" where you can get such advise or help. Many warn against some of the companies that offer to "help you get to manufacturing" be warned, not everyone out there is a nice person with your interests at heart.

There are, I suppose, as many bad news stories as there are good news so there is no one answer, the best advise for your own ideas is the same as for anything else, do the research, and prepare. Do not mislead yourslef as to the merits of the ideas nor your own capabilities, get a reality check.

JMW
www.ViscoAnalyser.com

RE: Capital to secure patent and start business?

(OP)
Thanks to JMW and The Tick.  You both touched on some of the things I would be concerned about.  Licensing it to an existing company in that particular market might be my first choice.  No capital expenditure on my part necessary, except for obtaining the patent.  However, that is merely an invitation for them to see how they could get around my patent.  We recently did the same thing at my company to a person offering us his idea.  Once we determined the patent was too solid, we said, "Sure, we'll license it!"  I guess we're an "ethical" company.  In my view, I have an idea superior to those currently existing in the market, especially after reading consumer feedback, but there is competition.  Thanks for the advice.

ChemE, M.E. EIT
"The only constant in life is change." -Bruce Lee

RE: Capital to secure patent and start business?

You can file a provisional (utility) yourself on-line with USPTO.  The advantage to that is that your ideas are concealed until you convert the patent within one year of filing the provisional.  It's also a cheap way to get your patent date established.  You need to be familiar with patents generally so you understand how to word your patent description.

Later, convert your patent to a full utility (or other) patent with claims and figures per the USPTO specifications.  You'll need to know what you're doing in this area or hire an attorney.  I've seen many claims I can work around with my own ideas (and have done so in the past) because of careless or poor wording.  So you'll need to think it through.  A patent is only as good as the claims are written.  Don't waste your money on anything not water-tight.

Good luck selling a license agreement to a company.  Sometimes they'll do it, but are often afraid of committing to something "foreign" (as in, "not invented here").  You have to have performance clauses and an exit clause for your own protection or else the company may simply license the patent and put it on the shelf to prevent you (or other companies) from competing with them with the patented concept.


Jeff Mowry
www.industrialdesignhaus.com
Reality is no respecter of good intentions.

RE: Capital to secure patent and start business?

Aspearin1
In a recent Institition meeting there was a presentation by a company that was formed around an idea that was patentable, as seems to be yours.

The point that came across as a cautionary tale was that this company first went to seek protection on their ideas and then went on to develop the idea and seek financial support as concurrent activities. This all seems logical and reasonable so far.

They are now past the expiry of the initial patents and have had to renew them to keep the protection in place to stand any chance of realising their investment. Because they have had to renew the patents, the costs have soared and have been a major cause of concern for them.

In hindsight they would have opted for keeping their ideas VERY secret whilst pursuing the product development route, and only when sufficient progress had been made apply for patent protection. This approach is a big gamble for obvious reasons but can keep costs down and give you a greater period of protection when you are in the marketing phase.

It was the duration of the development phase which exceeded all forecasts and led to almost crippling costs. In the face of all this they have had to make regular decisions about giving up or continuing to see it through, and various routes in the middle!.

As to finance, their experience was that there were no enterprise backers as they all detected some risk and shied away, banks would loan but only on security of property. There were limited forms of grants available (this is in the UK) but family and friends became the only major source of backing for them.

I hope this gives you food for thought to help you get things right for you. I wish you well in your venture.

Regards
Colin

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