Should Startups Patent Their Inventions

Until I read IPWatchdog.com's Don't Get A Patent? Plainly Ridiculous! I had no idea that anyone would advise businesses that they do not need patents.

Increasingly on the Internet invention advertising is taking an odd and seemingly inexplicable turn toward advising independent inventors to not seek patent protection, which is undeniably bad advice that will undoubtedly cause much disappointment and heart break for those who actually follow it. But why is it that you are starting to see more and more advertisements that say it is unnecessary to get a patent and you should simply forego that step?

I do not practice patent law. I do represent start up companies. When I need patent work, there is a local attorney who handles that work. Anyone reading this blog knows I put a strong emphasis on business' protecting their intellectual property. (For on this blog on this subject, click the "intellectual property" link below.) This idea strikes me not only stupid but also dangerous to the inventor.

IPWatchdog.com offers the following explanation:

The reason you are seeing more and more bad advice aimed at steering inventors away from the patent system is likely because effective September 15, 2008, new rules of practice went into effect at the Patent Office that require a patent attorney or patent agent to be 100% in charge of the creation of any documents filed at the United States Patent Office. This is important because the way invention submission companies would typically operate would be to work with inventors and do most if not all of the drafting of the patent application. They would then send the application to a patent attorney who would finalize the document and file the document. In many situations inventors would pay between $8,000 and $12,000 for the filing of a patent application, with as little as $200 of that fee going to the patent attorney or patent agent. This obviously was fraudulent because inventors would anticipate that most, if not all, of the fee they paid went to the patent attorney or agent, and that was not the case. So inventors would think they had competent representation by a trained professional and all they were receiving was less than 1 hour of patent attorney or agent time.

I think IPWatchdog.com presents the real problem in much gentler way than myself. People want a cheap solution. They think they are avoiding astronomical attorney fees. Companies like this - and there are more plying their services in the legal field - have taken to heart W.C. Field's advice about not giving an even break.

IPWatchdog.com makes a stab at a solution here but one that depends on a willingness to and a bankroll for litigation. If the other party wants to breach the confidentiality requirement, then it is off to court. Litigation costs money that would be better put into the business.

The only way that you can obtain any form of protection for your invention in the absence of a patent is to get individuals who learn about your invention to sign a confidentiality agreement. The agreement is a contract that says they will not disclose your invention as long as it remains a secret and not generally known. Typically these contracts will end the secrecy obligation once your invention is no longer kept confidential, so at best they provide only limited protection for your invention during the early days when you have not disclosed information publicly and you have not sold your invention.

The more I blog the more I see my lawyerly focus is a bit narrow. As a lawyer I would caution against trade secrets providing the same protection as patent law. The writer and I get to the same conclusion but from a different route.

Trade secrets can provide protection, but only so long as the invention is secret and once you start distributing your invention the secret is lost. If you sell your invention or otherwise distribute your invention you have lost all trade secret rights that are associated with your invention because others will be able to see your invention, take it apart, learn about it and copy it if they want. So for anyone to suggest that trade secrets meaningfully protect inventions is misleading. Trade secrets protect information, not inventions, so do not expect that you will be able to maintain any exclusive rights to your invention once you put it into the stream of commerce if all you have is a trade secret. To be sure, trade secrets may be helpful to hide what I will call exotic information, such as knowledge that a certain brand of component works best, but trade secrets are not going to prevent anyone from copying and distributing your invention once your invention is on the market.

If you are thinking of starting a business that involves a patent, get yourself to a lawyer. You will need maybe two. One familiar with start ups and another who is admitted to the patent bar. If you are thinking of starting a business in Indiana, please contact my office.