File a Patent on Your Idea

Introduction

Having grown up in the semiconductor industry in the early 80's and into the 90's, I've see at lot of patent wars where one firm will duke it out in court with another firm over who's intellectual property will prevail. Sometimes, the easiest solution is simply to cross-license patents with your arch enemy and stop feeding the lawyers. But as a startup, should you file a patent on your idea? Absolutely and we'll discuss how to this in this post.

The Main Idea

Patents can create value for your firm but they don't generate sales on their own

Lets get right to the point- patents do not cost $20,000 and you don't need to be a hotshot designer to get one. Further, it is very likely that your idea may meet the criteria for a patent. But clearly, patents are a type of asset, protected by US and sometimes International Law. I say sometimes because rampant theft of US intellectual property by countries outside the US has been a major thorn in the side of industry for decades. Remember that a patent gives you the legal right to sue another organization if they use your patent without your permission. Patents do not generate product revenue on their own.

Getting Started with a New Patent Application

My first exposure to the patent process was at Motorola. Moto had a very aggressive IP development strategy. Key managers within the company would screen potential patent ideas for relevence to Moto's corporate goals and select those that would be processed into an application by the the internal IP group. But you don't work for Moto (I assume). How does one person do this and not go nuts trying to figure out all the weird language and phrasing required? Relax, its not that hard but you WILL NEED a patent attorney at some point. And, do not proceed down this path unless you are prepared to pay the patent attorney.

I know this may sound incredibly corny but there is a simply wonderful book out there called Patent it Yourself by David Pressman. I believe Mr Pressman is a patent attorney. The book takes you through the A to Z's of patent writing and submission. I bought this book the first time in 1999 when founding AirAdvice. The book taught me alot about the patent process. One of the most important things I learned was that I needed to do the grunt work of searching existing patents for ideas and conflict and drafting possible claims about my inventions.

I had a lot of time on my hands before we incorporated AirAdvice so I began searching the patent database while reading the book. I must have printed out a stack of patents about 5 feet high. Our dining room looked a library with all the printouts and assorted books I was using. I went through all the relevent patents to figure out what the key claims might be, which classes were assigned to the patent, and made notes about what might be potential claims for us to use.

I developed 5 complete patent descriptions including claims. We considered going the provisional route but we found a great patent attorney (Al- we stil miss working you). Our attorney took our applications and reduced them to three, and got them fiiled very quickly. I don't think we spent more than $10,000 on all three. And, all three of them did issue. One of my co-founders continued on with the patents with some success after I left the company.

This low cost is probably a reflection of the lack of existing IP in our field at the time. In the late 90's the Internet was still in its early growth stage so network style patents, like mine, didn't face a lot of competitive existing patents. But this approach still works- read on.

Our Patent Strategy in 2020

When I started Tailwater in 2017, I already had been doing my patent research and just like in 1999 I I found several patents that looked to be right in my way. But the more I looked a the claims (this is the legally enforceable part of the patent), I notice that the phrasing of these claims completely omitted our approach- using portable plastic water tanks and an unpressuried or gravity flow operation. Was this unique enough to garner another patent? The answer is yes it was. We got notified this spring that our first patent, initially filed as a provisional in 2018, would issue. This means that the effective data of our patent is 2018. Anyone who has built a bioreactor like ours since 2018 may receive hate mail from our lawyers (Dowee Screwum & Howe LLP).

Our patent attorneys did not have any experience in water treatment that I could tell but they were really good at finding the key phrases to denote the distinctions that made our invention unique and non-obvious. This patent probably cost us north of $8,000 over 3 years but this is still a far cry from the $20,000 one sees in the lay press and on web based resources.

Our problem was that many people had published papers and filed patents in the wastewater treatment area so we had to thread a needle through this thicket. In Jauary of this year, we were notified that all of our claims had been rejected. I was really disappointed. But the patent attorney's were extremely helpful. The US Patent Office examiner had left open an avenue for appeal. We, mostly me, had to figure out how to refute the examiners claims that we were infringing. The attorney re-drafted some of the language. This second go around with the patent cost us the most money- almost $5,000. We did appeal, the attorney met with the examiner directly, and finally the examiner approved our modified claims.

Provisional Patents, Disclosure, and Business Models

Was it worth it? You bet. Since filing our provisional patent in 2018, I had put the term "patent pending" on all of our marketing lit including presentations and cut sheets. We decided to use a subscription business model initially. There are many reasons to do this but for me this was essential as I could install a system at a customer site and not disclose any of the tricky bits inside. The downside of this approach was that some customers were not interested in subscription models. But, by launching the product we were disclosing the invention. Should the patent not issue, all of our stuff would be fair game for competitors. So we took a calculated risk.

Since we are a small firm still, we were constantly looking at ways to grow our business outside of California. One way to do this was to license the patent. But since the patent had not issued- we were stuck. Once we got the notification on the patent, we decided to tell all of our customers that there were three ways to use our products: a) the existing subscription model, b) purchase of the systems, and c) licensing the patent and build it yourself. This process has just started (July 2021) so I'lll update the blog if we see some new business come from our change in the business model.

Patenting is An Ongoing Process

As I write, we've clearly opened a new front in the "nitrate wars". We already have the fastest, most effective, and highest performance solution for removing nitrate from just about any kind of water. But you need to understand a very key point- your awesome new patent will possibly incentize your competitors to work around you and your approach and develop an even better solution. This means that you need to keep innovating- remember our adage of "innovate or die". This constant battle that drivens new innovations is exactly the US Government is trying to encourage. They give you a limited monopoly on your idea in exchange for disclosing how you did it. The net result, nationally, encourages a host of new products coming to the marketplace.

Summary

Perhaps you might take some advice from John Mellencamp in his song "Play Guitar". You can cruise around to all the cool restaraunts talking about how cool hour idea is or you can get down to business, roll up your sleeves, and start patenting.