I’m a fan of podcasts. Knowing this, a friend recently directed me to a podcast from a well-known marketing guru who was giving advice about intellectual property, and patents in particular, during one of his episodes. My friend was curious to know if I agreed with this podcast host. I listened and, after hearing the host’s general misunderstanding of the intellectual property system in the United States, I thought it would be a good idea to share a few patent facts.
First off, the podcast host suggested that the U.S. Patent and Trademark Office gave away process patents like candy. In reality, what is patentable is set out by statute. Under the statute, “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
Courts have interpreted what is useful, new, and non-obvious in various ways over the years. It is important to understand that the requirement that the invention be useful, new, and non-obvious isn’t a requirement that it be beneficial or better, only that the invention is/does whatever it is/does in a way that is different enough from what already exists.
Generally, almost anything that you can physically hold will be considered useful, and even some things that you can’t hold will be considered useful. Then, it only matters if there isn’t anyone that already had the idea or made the idea publicly available.
The thing that trips up a lot of inventors — and causes the USPTO to hold back giving out patent “candy” — is if their invention is strictly in the software or computer-related arts or is a discovery of a scientific process. There, the Supreme Court set out a special analysis that threw the U.S. patent world into a tizzy. For inventions that may encompass software or scientific processes, the invention must not be an abstract idea. Essentially, you have to tie your software or scientific discovery to something more than just the basic software or scientific discovery. It is important to keep this in mind.
Talking with a competent, qualified patent attorney can help you evaluate whether or not your creation is patent eligible and, if your creation is potentially patent eligible, can help you explain your invention in a way that will make it more likely to get approved by the patent office.
Second, the podcast argued that you need to risk at least 25k to get a patent. In reality, it is true that the process to get a patent can be time-consuming and expensive, but the cost is not an upfront cost and is typically spread out over several years.
The cost to talk with a patent attorney, draft an application, argue with the patent office and finally get an issued patent in hand can vary from as little as 10,000 to more than 50,000, depending on the complexity of your invention. Currently, it can take 18 months to more than three years to get an issued patent, depending on the technology area or “art space.” The costs are thus generally spread out over that timeframe. Furthermore, depending on your company size, you may be eligible for reduced fees from the USPTO, making the process somewhat more affordable. There are also patent clinics at many law schools and practicing attorneys who will help solo and small clients for a reduced cost or possibly for free. Beware the patent attorney quoting you a low fee, though, and make sure that the estimates you get from different patent attorneys are comparing apples to apples for the whole process.
Third, and this is a point that the podcast host glosses over, patents can be useful to help early stage companies obtain financing to help your company grow. As an early stage company, having a patent can help you entice investors. Many investors want to know that your business can create revenue-generating assets even if the business itself never takes off. Many investors may also want to invest before you have the issued patent in hand as a way to keep investment costs lower.
In other words, filing a patent application (and before paying thousands to obtain the issued patent) can entice investors to invest in or finance your company. The USPTO also provides a mechanism by which you can “save your spot in line” (i.e., receive the associated rights and glory for being the first to invent the product) while still giving yourself over a year before you need to publicly disclose what you’ve invented. Thus, the patent process can give small businesses and solo inventors at least one year of breathing room where they can talk with investors or potential buyers about their invention under non-disclosure/confidentiality agreements without worrying that their idea will be stolen.
Fourth, the host believed that the only value in having a patent is in the ability to sue someone. In reality, patents can have a chilling effect on your competitors. Yes, a patent gives you a right to sue. It also lets your competitors know where to avoid going into business. The competitor may still choose to do so, and you may ultimately need to sue to stop them, but you make it harder for your competitor to succeed. If you have a valid, enforceable patent, you can stop Goliath from stealing your customers and profiting from your idea.
Lastly, this particular podcast host suggested that it wasn’t worthwhile to pursue your IP rights. Instead, he claimed, you should simply come up with another idea. Sadly, this advice is laughably naïve. Particularly in the patent space, your idea may represent years or decades of research and development. Consequently, simply coming up with something else isn’t as easy as flipping on a light switch or coming up with a new idea. In particular, if you are a small-market entity and you don’t seek protection for your ideas, you run the risk that your large competitors will copy what you do and put you out of business simply by having greater market power and resources to scale your idea.
In sum, people who are interested in pursuing patent protection should talk to a patent attorney instead of listening to podcast hosts. Patent law is complex, which is why there is a separate bar admission exam (similar to a state bar exam) that attorneys must pass in order to file patent applications and argue for their issuance before the USPTO.