Business Decision - long read and very boring...sorry!

[mxtras]

I have a very complicated dilemma and I think I could use some advice. I sincerely apologize for the length – this is an involved, complicated matter and I want to provide as much pertinent info as needed to describe the situation. If you don’t feel like reading all of this mess, go to the last paragraph for the Reader’s Digest version.

Four years ago, I came up with this idea. I built several of this idea and used the idea, and it worked amazingly well. So – I spent about a year perfecting/refining the design with the intent to manufacture these – at least on a limited basis. During this time, I conducted my own patent search to determine if there were going to be any conflicts. I found absolutely nothing remotely related, so I contacted a patent attorney in DC who conducted an official (expensive intern) search that yielded the same results as my economy search - nadda. That sentence took a few seconds to type – the entire process took many, many months of very late nights compiling information, pictures and drawings.

I had an attorney draft the application (again – many months of time) and it was submitted and subsequently published on the USPTO website - yippee. Now, three years later, the USPTO contacted the attorney with a laundry list of technical issues with the application – some related to claims, some related to drawings – mainly formalities, nothing that would put the brakes on the application or the issuance of the patent. The attorney now wants another 20 hours of fees to begin to straighten this out – and this is round one. There could be more. About three months ago, I took possession of a commercial shop so money is extremely tight as I try to get the shop moving. I just plain, don’t have the $$ for the fees right now and can’t foresee having the funds for anything that’s useless to the business (if you consider the patent useless, which is what this post is asking - the value of a patent to the business).

My concern is that the product is extremely unique and has extremely large market potential worldwide. I am covered as far as public domain because it was applied for before it was exposed to the public. I am certain it will be copied, but what can I do about that – I can do a US patent eventually, but I doubt I can afford an international patent ($100+K) – let alone the prosecution expenses for infringement which would be ridiculous in an international suit.

The value of the patent to the company is to protect the US market and possibly the North American market as well. The other benefit is that if the company fails to survive before we can really get our foot in the door, having a patent would be helpful to either generate some revenue from Vulture capitalists or a bank loan – or just sell the patent rights and close the doors, or any combination – all of which have been evaluated at one time or another over the last four years.

This privately held, personally financed company can exist without this patent and visa-versa. SO – should I allow the patent to go abandoned and try to pick it up later if/when things look more promising? Paying the attorney fees is going to kill me financially for a few months and the lease on the shop will be extremely wasteful as I would not be able to buy the supplies and components needed to make progress. I really don’t know exactly what is more important - making progress on the product or making progress on the patent. The attorney thinks the patent is a priority but I think making progress on the business/product is the priority. I can’t do both, so I must choose. I am not willing to get a loan for such a thing.

I have a meeting with the patent guy this weekend and I need to make a final decision on my path.

Thoughts??

Scott

[InspirationTool]

Here's my $.02.

I'm not a patent attourney, so take this with a grain of salt, but you may be able to drag out the process without spending too much money depending upon how you answer the patent office's request. Of course, this may be illegal, I don't have my patent book on me. You have read the NOLO Press book on patents, right?

That will give you time to find out the value of your product (aka, sell a bunch).

Barring a cheap fix option, and you can get into production quickly, I'd lean towards dumping the patent. Especially if you have a snazzy trademarked name so you can brand your product. I mean, what's more fun for YOU, making and selling stuff you can use in the real world, or making and selling a piece of paper?

-Jeff

[Al_The_Man]

I would tend to agree with the answer so far, I was faced with a similar situation but mine was something that was of a very limited market, albeit a very lucrative one.
I would hesitate to spend alot of time and money, especially after seeing examples of cases like the engineer that sued GM over the windshield washer timer that he claimed was his and the court finally came down on his side, but it was an expensive 15yrs later, This together with the blatant, unchecked flooding of world markets by China of cheap knock-offs .
Unless it was something that you would want history to connect your name to, it may be a waste of time. I would be inclined to make the quick initial buck before the inevitable.
Al.

[Geof]

I should simply say "do you really need to ask my opinion?".

I think this is a time to say "I am glad I do not have co-owners or bank loans, I can walk away from this patent and write off everything spent to date, it will not have a negative impact in the future because nothing was borrowed, it may have the effect of reducing my ultimate growth because competition can come in without any hindrance, but really I get my satisfaction out of designing and making things not out of dealing with patent attorneys, and Vulture Capitalists and all those kind of people, so I am going out to do what I do best and make sure nobody can compete effectively."

Incidentally your patent would not have much value until after you had proved out the market. Similarly, vulture capitalists will strongly discount your present value unless you have a solid sales record and can demonstrate an order-of-magnitude growth potential.

Also you a not quite putting things correctly, near the bottom of your post you missed a few words which I have added in this quote: "The attorney thinks THE FEE HE WILL CONTINUE TO GET FOR PURSUING the patent is a priority"

[2muchstuff]

Lawyers are always looking out for themselves, money, money,money. You need to look out for yourself. Is it the patent or the buisness that is supplying the roof over your head, feeding and clothing your family, your current standard of living. If you loose the buisness where will you come up with the funds to fight for your patent. What happened to the days of family comes first and we will figure a way out of this. Instead we have become a society of money hungry fools trying to keep up with the Jones'. They might have won the battle but you will come back to win the war. Or if you can swing it, give the lawyer a little at a time so you can make some progress so as not to drain your buisness that way the patent office won't think that you have given up.

[ynneb]

The answers so far are what I would have thought too.
The product WILL be copied regardless of patent.
It is better to hit the market hard with a good brand name and a quality product.
I would be inclined to not be greedy on the selling price. This will destroy the incentive for copy cats to see a potential and try to unercut you.

Our governments are so slack, they should be supporting local industry in such a way that you should not have such high startup costs and hurdles. Sadly they are more inclined to spend our money on starting wars in other countries. The legacy they will leave to future generations, is no industry, and huge war debts.

The irony is, if you do make money out of your product, the government will stick out its hand for a big cut, and yet it has done nothing to help you overcome the huge risk and setup cost.

[lwalker]

Forget the patent. If you can't even afford to pay the lawyer for the patent application process, it's very unlikely you'll be able to pay another one later if you have to sue over patent infringement. If you can't afford to sue over infringement of your patent, then the patent is worthless to you.

Focus your energy and funds on growing your business.

[Unabiker]

I'll just echo what others have said, and add this....
During your patent research, you no doubt looked at many patents similar to your own product. After looking at said patents, did you see any ideas that could be improved on. How tough would be be to come up with an improvement on any of those that would be considered "novel and unique?" When I did the patent research for my products, I found several similar items that I felt that with a small amount of effort, I could "design around" the patent. I concluded that if I could do it, so could others.
Unless you have the deep pockets to enforce a patent, the most likely person to see any real benifit from your patent is your patent attorney.

[mxtras]

I filed a Utility patent application, so designing around the design will not get you out from under the utility of the product. The patent focuses on the use and method - not the manner in which it is accomplished. This is the hardest type of patent to get.

I understand your point, though, I think. If I could improve on someone else's widget, then who's to stop them from doing the same to me? Hopefully the Utility Patent....but - as mentioned - it's up to me to shell out more $$ to prosecute. The difference in that case is that the attorneys will prosecute for a cut, so little $$ is usually needed if your infringement case is strong. Kinda like personal injury lawyers...uhmm....

And no - there is nothing out there like this. Nothing even close. Never has been. I have been in this industry for almost three decades and have never seen as good a solution nor have I seen such a novel idea. But - I may be biased...just a little....

And I agree - the fees are a bit much and they seem to multiply as time passes.

Scott

[HuFlungDung]

I say this in good humor, make one and sell it to your first customer for $1Million or whatever. Tell him he can go and make as many copies as he wants, but that you will be in competition with him, or he can buy you out right now

If it is some kind of product for mass consumption, you are always faced with the difficulty of distribution, dealer discount, etc.

Rather than going straight into public sales, it might be an idea to directly try to market the thing to a large potential distributor. Sure, they might hack at your price like mad, but at least you might enjoy the benefit of a wide spread release at one time.

[Al_The_Man]

To summarise most of the opinions so far is that if, Quote: the product is extremely unique and has extremely large market potential worldwide. :Unquote, Then You need a very wealthy backer to fund the world production of the item, because as you have pointed out, your own funds may be limited, or you may need to look at selling the rights to someone with the resources to produce in the quantities needed, who also has the legal resources, should someone attempt to clone the product, this could give you a nice chunk of change and dispense of the headaches.
It is unfortunate that people with inovative ideas are forced to this, but the reality is we live in a capitalist world and $$ are the bottom line.
Al.

[JavaDog]

Originally Posted by mxtras And no - there is nothing out there like this. Nothing even close. Never has been. I have been in this industry for almost three decades and have never seen as good a solution nor have I seen such a novel idea. Scott

If this is really-truly the case, and it would have a decent market - I have to disagree. Plus, with what you said about it being a Utility patent - from what you are saying - it sounds like it would be worth the money.

Of course, if getting that patent will make you broke - it is kinda pointless.

Hey, you could always try and get on the new American Inventor show!