Great Idea? The Path to Patent Protection by Veteran Entrepreneur Wes O’Donnell
Wes O’Donnell is the Managing Editor of inmilitary.com/inmilitary and a successful “serial entrepreneur”. He recently gave a TED talk on Data Visualization and is speaking at the US Air Force Academy about Leadership in February. Connect with him on LinkedIn!
“Don’t worry about people stealing your design work. Worry about the day they stop.”
So you have an idea that you know will change the world. Or, at least, you know that there is a market for it and it will sell. But where do you start? This is essentially a contextual question because it is solely dependent on the type of product or service that you have in mind. However, there are some universal guidelines that you need to be aware of.
In this post, for real-world comparison purposes, I will be using the Omnicart™, a modular medical cart system that I invented, and was the flagship product for my company MD-Advantages, before I sold my patent.
There are 4 steps to getting your idea to patent protection:
Step 1: Document it
Documenting your idea is one of the most important things that you can do to protect your intellectual property rights. You need to have proof of when you came up with the idea for your groundbreaking product. The first step is to write down everything you can think of that relates to your idea, from what it is and how it works to how you’ll make it and how you think you’ll market it. This is the crucial first step on the road to getting a patent and keeping it from the circling vultures who are out to steal it.
There is an old business myth called the “poor man’s patent” which involves writing your idea down and mailing it to yourself in a sealed envelope so you have dated proof of your product’s conception. As crafty as this sounds, it has, sadly, been proven to not hold up in a court of law. The best route is to document everything about your idea in a journal; I’m talking about the bound kind you buy from a bookstore… not the kind you pick up in a Wal-Mart school supply section. Then, have a witness sign it, preferably a notary public. This journal will become your friend throughout the patent process. Keep it close.
Step 2: Research it
Before you get in too deep with developing your idea, there are a couple of research considerations to perform. Be doubly sure to do your due diligence here, otherwise you risk wasting months of your time for something that either can’t go to market or won’t sell once it gets there:
Go to www.uspto.gov and perform an initial patent search. Even if you are 100% sure that your idea is completely original, you need to make sure that the idea doesn’t actually exist in some form.
If you’re satisfied with the initial patent search then the next step is to research your market. Sure, I thought that the Omnicart was a great idea, but that doesn’t mean that hospitals will actually buy one. The vast majority of inventors don’t make any money from their patents. Contact people in your target market and ask around. Draw up some pretty slides that you can display on an iPad and flip through them with a potential customer. Ask how much they would be willing to pay for your product. It can be informal at first, but eventually you will want hard data. Once you know there’s a market, make sure your product can be manufactured and shipped at a low enough cost so that your retail price is reasonable.
Step 3: Get a formal design
In 2012 while I was visiting a hospital while performing my duties with my previous employer, I noticed that there was a high degree of frustration from the clinical staff with locating the correct medical cart for their needs. For instance, there was always a crash cart around but never an anesthesia cart; or always a pediatric cart but never an specimen collection cart. Across the country, doctors and nurses were saying the same thing: the clinical environment is a crowded and technical space where every centimeter matters. In addition, nurses stated that they spent, on average, 40-45 minutes searching for the right cart; time that could be better spent with patients, improving patient care.
It was then that I had an idea… Remembering the modular systems that I used throughout the military, what if there were a medical cart whose role could be changed by the end user with a quick motion? The Omnicart™ was born. I did a back of the napkin sketch of the main innovation for my idea. It had the frame of a normal medical cart but had an interchangeable drawer module that can be removed and a different module inserted, turning any cart into any other; basically a box within a box.
My original 2012 sketch is pictured here. This took 5 minutes using Microsoft Paint. Spoiler alert: I am not an artist…
But I’m not a designer or engineer. And if something like this is going to a manufacturing facility, then there has to be some very specific details and CAD documents. So depending on your idea, you have two options on the design side.
The first is:
The Elance website allows businesses to post jobs, search for freelance professionals, and solicit proposals. You can evaluate the contractors applying for the job and, once a contractor is selected, communications and files (like my non-disclosure agreement for the Omnicart™ idea) are exchanged through the Elance system. Payment for jobs, which can either be hourly-rate or project-based jobs, is made by the client through Elance’s system, which deducts a percentage of the fee, 8.75%, as a “commission.” Elance offers a Work View tool provides an official record of work completed. For project-based jobs statement of work or milestones are used to indicate progress toward completion, and funds are held in escrow by Elance to ensure payment upon completion of the milestone.
So how did it work for the Omnicart™?
The first thing I did was create my free account and post a job; basically an ad that is searchable by all of Elance’s freelancers explaining exactly what I needed. I explained that I needed someone with CAD experience to take my idea and turn it into a set of documents that a manufacturer can put into a computer and spit out a product. I also put that my budget for this was no more than $1,000.
I then received a flood of messages from freelancers responding to my posting from all over the world, as well as what their rate would be to complete the project. Not surprisingly, the American freelancers were extraordinarily high priced, coming in close to my limit of $1,000. The Europeans that responded weren’t much better. But there was one in particular that caught my eye… There was a bid from a person in India that was a little on the pricey side ($900) but his portfolio was incredible. Elance allows you to view freelancer’s past projects and this person had previously done jobs that were very similar in size and complexity to what I was looking for.
I then messaged this freelancer to see what the timeline would look like for him to complete this job. He responded that it would be within a month, well within my time constraints. I then accepted his bid and Elance then charged my company debit card for $900 + their fee and placed it in a holding account or escrow.
Throughout the month, I had weekly meetings with my freelancer through Skype where we discussed certain design implementations that he needed guidance on. At the end of the period, he submitted everything that I needed for my review through the Elance system and once I approved it, the money was released to him. Other than working around the time difference in India, it was a pleasant, pain free experience.
Pictured Above: The Omnicart™ Prototype v1.0 by Wes O’Donnell. Patented, Signed, Sealed, Delivered. A true work of art…
Now, I know what you’re thinking… “Wes, you hate America. You’re guilty of outsourcing and you should have kept that money in the U.S.” Well, actually I hired one guy in India to design my medical cart; I hardly think our country’s GDP will be adversely affected. Besides, the actual manufacturing is done in the United States, even though I could save an enormous amount of money by doing my manufacturing in China. I do have a legitimate reason, besides patriotism, for building the carts here: If you want to sell to the U.S. Government as a GSA contractor or subcontractor, then your product must be either made in the U.S. or made in a NAFTA (North American Free Trade Agreement) country. In any case, Elance is an amazing resource for small business owners like you. Check them out.
The second option for you if your design is much smaller, think gadgets:
Quirky was founded on the belief that ordinary people have extraordinary ideas, and that invention should be accessible to everyone.
Any of Quirky’s community members can become an inventor or influencer by submitting ideas and helping to determine which products Quirky will design, manufacture, and sell. Inventors who submit ideas that are then created and influencers who contribute to those ideas share in royalties based on product sales.
The company solicits ideas for new products via Quirky.com and its iPhone app. Once an idea is submitted, the Quirky community vets it, praises it, critiques it, and votes for their favorites, many of which will eventually be made by the Quirky design team and sold online and in stores.
A prospective inventor can submit an idea to Quirky, and there is no limit on the number of invention ideas that a person can submit. When determining which products to make, Quirky considers factors such as uniqueness, manufacturing complexity, and intellectual property rights, yet they are committed to working on ideas both big and small that make life better. Submitted ideas are voted on by the Quirky community, as well as by employees of the company at Eval, Quirky’s live webcast that is broadcast live at Quirky.com/live every Thursday evening at 7pm EST, where new inventors are crowned.
Revenue Sharing for Inventors and Influencers
The inventor, along with other community members who have helped determine the product’s design, style, name, tagline, and price, receives royalties based on product sales.
Quirky branded products are found in some of America’s top retailers including: Target, Bed Bath & Beyond, and Amazon.com.
As a company, MD-Advantages doesn’t have any experience with Quirky, but we’ve heard great things about them through several of our business contacts. They are well worth a look.
Step 4: File a Patent
You can file a patent application electronically through the USPTO Web site, by mail, or by fax (but not by e-mail). Don’t expect a speedy process, though. Depending on the kind of application and the technology involved in your invention, it could take one to three years to get your patent granted.
A formal application, (called a non-provisional) has some required sections that you have to fill out. In addition to your official drawings of your product, you’ll need to include something called the “specification”, which basically shows a random person how to make or use your product. The specification contains the following:
- Abstract: a short snap-shot summary of the rest of the specification
- Background: describes the need for your invention and most importantly, what problem it solves
- Summary: a short explanation of the invention
- Detailed description: includes a (obviously) detailed description of the ideal use or “embodiment”, as well as additional possible embodiments of your product
- Conclusion, ramification and scope: this section will state the advantages of your product and any additional uses again
The specification document should also include the title of the invention, and a list of the figures in the drawings.
Finally, and perhaps most importantly, your application will include claims, which are listed after the specification. Claims define the legal scope of your patent and describe the boundaries of your invention. The claims come into play during any sort of prosecution and litigation.
Perhaps the hardest part of a patent application, especially for a start-up on a budget, is the fee to file one. The standard government fees for filing at patent start at about $500. A set of professional CAD drawings (Computer Aided Drafting), which many people consider a “required document” to get an approval could be up to $1000 or more. Typically, it’s widely regarded that the less you pay for a patent application, the weaker it will be when it comes time to enforce or litigate against an infringer in court.
One more thing. Avoid any company that advertises on TV to help you with your invention or with a patent. They generally won’t have your best interests in mind and I have yet to meet one person that has had a positive experience with these companies. Do yourself a favor and Google “Inventor help companies scam”.
So… Seriously, Do I Really need a patent
Maybe… but maybe not. Ask yourself these questions:
- Is your invention really worth protecting? If it’s a bleeding edge new technology like an intraoperative MRI machine, probably. If it’s a new gadget with a niche market, probably not. Invest a little money in speaking with a decent patent lawyer, and ensure it’s one who focuses on IP or intellectual property. He or she should provide straight guidance. If you’re really serious about a patent, then invest in a proper patent search. One thing to remember: most lawyers and agencies charge at least $1500 for the patent search alone.
One option to think about is a provisional patent application, which is a relatively cheap way to put your application on record. The catch is that you only have 12 months after filing the provisional application to submit the formal one. It costs $130 for a Provisional Patent Application which will allow 12 months before it expires to complete the total application and allow you some degree of protection with the “Patent Pending” term. One additional thought here… once you make your idea public, whether at a trade show, actual sales or advertising then the government starts the one year clock ticking. After 12 months, you may lose the ability to get a patent at all.
- Do you have the time and money? Patents are pricey, and in some cases take years to finalize. If there are problems along the way, you’ll burn even more money and time into it, and might still come up with scratch. If you’ve budgeted for it and planned 2-3 years in advance, then you might be okay.
- Do the estimated benefits outweigh the cost? Is there an actual market for this product? Your extensive research should tell you yes or no. Also, is anyone really likely to steal your idea or are you just flattering yourself? Will your product even be relevant by the time the patent comes through in several years?
- Do you have the resources to defend it? It is essential that you ask yourself this honestly because, frankly, it’s the reason you’re getting a patent in the first place. There are hundreds of companies that will take their chances ripping off product designs completely or changing one little thing in your design and going to market or seeing how far they can go, counting on the fact that you’re a small company and can’t afford to fight.
There are two ways to patent your idea:
- Write and file your own patent application (the cheapest way) – total cost about $900 for most inventors to get an issued patent (USPTO fees only)… or $130 for a Provisional Patent Application which will allow 12 months before it expires to complete the total application and allow you some degree of protection with the “Patent Pending” term. Also good for marketing purposes.
- Hire a registered patent attorney or patent agent to write and file a patent application for you (the most expensive way) – total cost $5,000-$10,000 mostly in attorney billing time.
Bonus Step: Manufacture
Okay, you’re ready to take your designs to a manufacturer and get something built. You need to start by determining which manufacturing code covers your product; a system called the North American Industry Classification System (NAICS) has superseded the previous Standard Industrial Classification (SIC) codes. As an example, it will look like this:
You can find all of the codes at the US Census Bureau here: http://www.census.gov/eos/www/naics/. It’s a good idea to track down your NAICS code even if you don’t plan on manufacturing anything. Modern Workspace, a completely online store that is just a reseller of other businesses manufactured goods, has been asked what our NAICS code is on numerous occasions, from business credit agencies to the government while I was applying to be a Service Disabled Veteran Owned Small Business, (SDVOSB). Don’t think of it as a manufacturing code; think of it as a general classification system so that other business entities can know at a glance what industry you are in.
Back to manufacturing, you can also enlist the aid of your local SCORE (Service Corps of Retired Executives) office; there’s usually one in every city. Attend trade shows for the industry you’re about to enter like MD-Advantages did at the Game Developer’s Conference when we were trying to break into that market. Also, search the Thomas Register online at http://www.thomasnet.com for a U.S.-based manufacturer’s directory.
Some entrepreneurs have had success with manufacturing reps that will pair your company up with a suitable manufacturer. We have avoided this simply because of the extra cost involved however, we do know of one very good service and we should mention the here: Global Sourcing Specialists or GSS will locate, qualify, and manage manufacturers that are appropriate for your product and company, for a fee, that is. You can find them here http://www.productgss.com/
And finally it’s time to negotiate with your manufacturer to produce a minimum quantity of your product for sampling. Use these samples to do market surveys to see what retailers and consumers think of your new product. Visit retail merchants that would carry this kind of product. Demonstrate a sample to these merchants and see if they think it would sell.
So, what do you think? Do you have an amazing, world-changing idea for a product? Do you really need a patent? Feel free to reach out to Wes if you have any questions!