| Author | Message | ||
| Ben Cannon (Artherd)
Intermediate Member Username: Artherd Post Number: 1025 Registered: 6-2002 |
Evan- Thanks for the kind words! Site is quite old and in need of update, but yes, that's one of my many gigs! (also me in the airplane pic, with my pilot buddy Jon on the right, I'm such a tourist, always want to fly over the bridge! :D) I've now got about 8 companies of various sorts doing all kinds of things. Some on a grand scale, some very small and specialised. Some are just me when I have time and an inspired customer. Best! Ben. | ||
| Ken Thomas (Future328driver)
Member Username: Future328driver Post Number: 633 Registered: 12-2001 |
Michael, I understand. My guess is that having the inventor reduce to practice was a way for them to get a solid date for their potential patent rights as well as to weed out the inventions that looked good on paper, but could not easily be reduced to practice. What technology field do you work in? The only company that I know in Cincy with a good size patent department is P&G. I notice from your profile that you are in Cincy. My fiance is from Brookville, Indiana which is only stones throw away. I love Cincinnati chili. We go to Skyline whenever we go back there. | ||
| michaelthuber (Mikehuber)
Junior Member Username: Mikehuber Post Number: 108 Registered: 3-2003 |
Ken, The RTP was a requirement from my company to any "inventors" before they would file an application. Our Patent Division was always pretty well tapped out so this must have been a way for them to priorize their work. The category my patents are in is one that has been pretty well mined out. Hundreds if not thousands of patents in the category. This is probably the reason for the length of time between filing and granting. | ||
| PeterS (Peters)
Intermediate Member Username: Peters Post Number: 1585 Registered: 1-2003 |
Evan...Send me an email and I will reply with my phone. You can call me to talk in more detail if you wish. | ||
| Ken Thomas (Future328driver)
Member Username: Future328driver Post Number: 620 Registered: 12-2001 |
The time that it takes to get a patent throught the PTO is usually a function of which art group the patent is in. The PTO classifies the technologies into art groups. Some have more volume than others. For example, the art groups that deal with telecom are pretty backed-up right now, while art groups in other areas might be able to get patents through faster. As far as a working model is concerned, it is not a requirement of filing a patent to have a working model. Michael used the term Reduction to Practice. This is not required for filing a patent application. Where RTP comes into play is determining who was the first to invent if a dispute ever arises. There are 2 kinds of RTP - constructive and actual. Constructive reduction to practice occurs when you file a patent application. Actual reduction to practice occurs when you make a working model. In order to file a patent application, you must be able "enable" a person of skill in the art to make and practice the invention. Basically, this means that you must have devleoped your ideas well enough to describe them in the patent application such that a person who is skilled in that technology can make and use the invention based on the information provided in the patent. As for marketing the product, you must be careful there. If you sell or offer for sale your invention, you must file a patent application for that invention not later than 1 year after the first sale or first offer for sale - otherwise you will be barred from getting a patent on that invention. For some good basic information, you can read the book "Patent It Yourself" which is not bad at describing laymens patent info. | ||
| Evan Jones (Jonesn)
Junior Member Username: Jonesn Post Number: 132 Registered: 8-2002 |
Hey Ben, your website is fantastic! Is that your own gig? | ||
| Evan Jones (Jonesn)
Junior Member Username: Jonesn Post Number: 131 Registered: 8-2002 |
Ben - I totally agree with you on that! A few ideas have come to me in the past weeks as to getting my own start-up capital. I'll have to add on a few more years to this project, but I'm young so it's fine. Mike - I'm the kind of person who thinks out every step of the plan from the beginning. I'm about to start testing the design, really as soon as my friend finishes the software needed for the tests. As for proving the design works, should be no problem; my product is not high-tech. If you don't mind me asking, why is one of your patents taking 7 years to get though? Should I expect serious delays like that as a default? | ||
| michaelthuber (Mikehuber)
Junior Member Username: Mikehuber Post Number: 107 Registered: 3-2003 |
All, Correct me if I'm wrong but I didn't see anything in these exchanges that said the Evan had actually reduced his idea into practice. Is there a real protoype involved that works? I have 9 patents issued in my name (US and PCT) and the second step in filing was actaully making a product that worked. The first was the documentation of the idea at a documentated date. It is my undersatnding that there are lots of new ideas with documentated dates floating around, but if you can't prove yours works, no patent will be issued. As for length of time to get a patent issued, the 9 I have took anywhere from 2-7 years. I still have some applications pending with assignment to my former employer. I retired more than 2 yrs. ago and still none of those applications have been granted. I am definitely not well versed in patent law, just an inventor who has gone through the process a few times. Mike | ||
| Ben Cannon (Artherd)
Member Username: Artherd Post Number: 993 Registered: 6-2002 |
Evan- a few random thoughts, take for what they're worth! IMO, The only way you will retain 70% is to start from scratch, self-financed from the get-go. Once you have a prototype, start marketing it. Befriend a banker, take out only straight buisness loans, and then repay them once your product hits the market. Befriend somebody in Circuit City, or WalMart of the like, get them to carry your gear alongside the big guys. At the end of the day, if you really want to retain majority ownership, this is the way to go. Not having big money in the begining can also foster all kinds of huge innovation that you otherwise may not have. Best! Ben. | ||
| Evan Jones (Jonesn)
Junior Member Username: Jonesn Post Number: 130 Registered: 8-2002 |
Wow, all this info is beyond helpful. I had no idea that a normal patent takes 3 years! I thought 18 months was the bad estimate. Anyhow, all of this should take place within a few years. Now I need to raise capital for my patents while I'm finishing school. Hmmmmm......Ferrari at age 22 or patents....... | ||
| Ken Thomas (Future328driver)
Member Username: Future328driver Post Number: 615 Registered: 12-2001 |
Design patents are not the way to go if you want to patent the underlying technology. You need a utility patent for that. Most people only use design patents for aesthetic designs such as furniture or, for example, Ferrari car body designs. The number of patents really depends on the invention. You could have what you think to be one invention, but in the eyes of the PTO, you might have multiple distinct inventions each requiring a separate application. The best way to know for sure is to consult a patent attorney and get the ball rolling on a patentability search. At present, a typical utility patent application could take about 3 years to go theough the PTO process to a granted patent. You can figure about $10k for the lawyers fees for a typical application (more if it is very complex), plus $2k-$3k for each Office Action from the PTO. Office actions are arguments back and forth between the lawyers and the PTO regarding patentabilty issues. I would say that a good ball park figure to use is about $20k-$25k for all the legal fees, filing fees, drafting fees, etc that go along with a single patent. There would be additional charges for foreign patent applications as well as any applications that might spawn off of the original application. There are plenty of reputable firms in the DFW area that do this. Of course, I am biased toward my firm......  | ||
| Evan Jones (Jonesn)
Junior Member Username: Jonesn Post Number: 129 Registered: 8-2002 |
Great stuff guys, thanks to all. Just a ballpark estimate: what would a patent lawyer firm charge me to get those basic invention & design patents? From what I understand, the USPTO takes about 18 months to finish everything and costs can come out to $30k for just one patent. Even better question: how elaborate are most patent setups for new products? How many patents for one design? I need to know if I should start to assemble a small fortune! | ||
| Mr. Doody (Doody)
Intermediate Member Username: Doody Post Number: 1838 Registered: 11-2001 |
is your us patent GRANTED or FILED? sounds like you definitely need patent protection in the other major areas. sooner rather than later. there is basically a zero chance you can raise any meaningful capital and keep 70% of your company. maybe you should look at debt financing instead? or royalties financing? lots of other options, but often harder to do if you're at stage 1. equity investment checks are definitely being written again after a long drought, and some of the onerous terms (3X liquidation preferences, etc.) are even finally coming out now. but valuations are not where they were pre-bubble-burst, and are unlikely to return there anytime in the foreseeable future! in the past few months there's even been some vc competition starting up again on deals, which is stellar news! but anything in the consumer space is not trivial and those risks will be factored into valuation. if the price point of your widget is high, that'll hurt too. etc. etc. etc. if you, say, need $25M to launch a consumer electronics company (that's a low number), you're talking about an $58M pre-money valuation to retain 70%. never mind your options pool and warrants your manufacturing partners might demand, blah blah blah. and for multiple rounds, no way you can keep 70% at the end of the day unless maybe you don't start fundraising until you're well into manufacturing (ie: you fund it yourself or bootstrap for a while) and only need to fund marketing (?). remember, on average, pre-bubble (which is where we live once again, imo), a founding ceo owned well less than 10% (i believe the figure is closer to 6%) of their high tech company at IPO time. 70% is a a huge number in ANY market - bubble, pre-bubble, post-bubble, etc. certainly in the bubble weirder stuff happened, but the pin did visit. good luck. doody. | ||
| Taek-Ho Kwon (Stickanddice)
Intermediate Member Username: Stickanddice Post Number: 2172 Registered: 11-2002 |
VCs don't always ask for a percentage of the company. I've done lots of VC investing through one of my companies and there are times when alternatives to ownership are explored at their request or ours. Also, VC is not as tough as a lot of people think. Yes, gone are the days when useless companies like iHarvest get millions, but good ideas will still have a line of investors forming. Cheers | ||
| Ken Thomas (Future328driver)
Member Username: Future328driver Post Number: 614 Registered: 12-2001 |
Another thought.... If you dont already have a patent, you might think about getting the process going soon. You would probably get more bargaining power if you have a patent application going thru the PTO when you go to VC than if all you had was an idea on paper that might not even make it to the patent application stage. At the very least, you should have a patentabilty search done since there may be prior art in the world that knocks out what you think is your invention. This is the first step in the application process. Basically we patent attys have a search conducted based on your disclosure of the invention to determine if it should even proceed to the application stage. Searches don't cost very much....about $750 to $1000 for any of the good IP firms in Dallas. | ||
| Ken Thomas (Future328driver)
Member Username: Future328driver Post Number: 613 Registered: 12-2001 |
Evan, I am not an expert on VC funding, but my understanding is that VC cash is pretty hard to come by right now and for those who get it they have to pony up a big chunk of their ownsership. Here in Dallas, there have been many notable "dot-coms" that have gotten a fair amount of seed money and failed (e.g Grocery Works.com) It was my understanding that Kelby Hagar (sp?), the founder to Grocery Works gave up much more than half of his stake to the VC guys to get money. You will have to give up more of your stake at each round of funding (there could be 3-4 rounds), so my gut instinct is that trying to keep 70% would be tough. Anybody have good comments on this? With respect to EU or Japanese patent protection, if you plan to market in those regions, then protection is probably a good idea. If you only plan to work within the US market, then a US patent would probably be enough. The reason to get patent protection abroad is to have an enforceable right against others in those countries. Why dont you give Maranelloman (Dave Scott) a shout. I believe that he has a lot of experience in VC funding for software and I think he has dealt with the VC folks in Dallas. | ||
| Evan Jones (Jonesn)
Junior Member Username: Jonesn Post Number: 128 Registered: 8-2002 |
Also, considering the new thing is a consumer electronic product, should I get patents in Japan & Europe on top of the US? | ||
| Evan Jones (Jonesn)
Junior Member Username: Jonesn Post Number: 127 Registered: 8-2002 |
Everyone, thanks for the info. About venture capital; Ok, lets say my invention/design had outstanding potential but was basically an entirely new market of consumer electronics. Would I still have to give a VC firm the majority share of the company to receive adequate capital to start? By all means I want to keep at least 70% of my company. | ||
| Ken Thomas (Future328driver)
Member Username: Future328driver Post Number: 609 Registered: 12-2001 |
One other thing to consider is the strength of the patent. If you have a very broad utility patent, then your bargaining position is much stronger than if you have a simple design patent. The company that you approach would most likey do at least a little research into your patent because they want to make sure they are buying a peice of an enforcable right. IF you plan to approach a company, it would be wise to have your attorney do a little research as will to make sure the patent is solid. | ||
| Ken Thomas (Future328driver)
Member Username: Future328driver Post Number: 608 Registered: 12-2001 |
BTW Evan, I am a patent atty here in Dallas, so if you have something in mind, feel free to contact me and I can bounce it off the partners in my office. Ken | ||
| Ken Thomas (Future328driver)
Member Username: Future328driver Post Number: 607 Registered: 12-2001 |
You don't want to approach any company about a deal without a good lawyer and a very strong Non-Disclosure Agreement already prepared. I doubt that they would be willing to buy into the company, but you could try to raise capital by licensing the technology to them if they are agreeable to that. I agree with Bill Hart. Find out what there submission proceedures are. Most companies will have very defined procedures for dealing with unsolicited submissions. Many times, they send them back to the submitter in the unopened original envelope so as to avoid any possible claim that they incorporated the technology into a product or that they used your disclosure of information in their own patents, thus potentially making those patents invalid. | ||
| Bruce Wellington (Bws88tr)
Advanced Member Username: Bws88tr Post Number: 3047 Registered: 4-2002 |
evan ask for whart here...hes a great guy and a patent /copyrite lawyer BRUCE | ||
| wm hart (Whart)
Intermediate Member Username: Whart Post Number: 1662 Registered: 12-2001 |
These companies usually have elaborate procedures to deal with unsolicited idea submissions, absent which, they could get some vital parts caught in the ringer if they eventually marketed something that somebody proposed, without a clearly defined set of provisions governing their relationship in advance. I would suspect that they could provide with with info on their procedures and indeed, may even make a submission form available for review by you and your lawyer. Obviously, if you have a patent, that will make a difference. Since our firm does some work for various of these companys, i can't give you detailed advice here, but you might start by having your lawyer contact their in house legal staff to ask about submission procedures. Hope that helps. | ||
| Evan Jones (Jonesn)
Junior Member Username: Jonesn Post Number: 125 Registered: 8-2002 |
Ok, lets say I have a new product that is totally patented in my name. It's a entirely new thing, invented by me. Now, if I went to a large electronics firm (Sony, Toshiba, etc) and presented this to them, asking them to buy 30% of my new company so I can have start-up capital, would they likely just tell me no and create their own design? The product(s) in discussion are relatively simple by design and could be built several ways. |