The Business Fashion Tips Podcast 

Episode 10

 

How to patent a product or an idea.

If you are going into business because you have an awesome idea or product concept, you’ll want to look into patenting it. There are three types of patents. The strongest is a utility patent and 90% of patents issued are for utility patents. This patent protects your entire invention and how it works. In order to apply it must be practical, operational, and beneficial. But just know that another inventor can come along and they only need to change a few things to get their own patent on a similar invention. So when you file the patent, think very broadly and come up with every idea you can think of that a person could change to make the idea their own. For instance, I have two utility patents my bed sheets and one utility patent on my duvet. Check them out at these links:……….. BEDSHEETS = https://youtu.be/TXMgv57Gjcs DUVET COVER = https://youtu.be/stUBkWjNF5I You can see the clever reasons why I was able to receive a patent. However, someone could just have the straps detachable and it would be an entirely new invention, so you really have to put something like this in the patent. Think of what someone could do to change the invention and include that in the filing. Your patent attorney or patent agent need to know all about your invention and they also try to think outside the box as how it could be changed. It helps to work together as two brain are better than one. So, try to come up with as many different ideas as you can. On my duvet I have a zipper on either side of the duvet, these could be replaced with velcro or buttons, so that needs to go into your patent. Try to be as broad as you can. The reason why I have two patents on my bedsheets is because when my patent agent first filed the patent they approved the patent but they did not approve one detail of the patent. So instead of just disputing the entire patent which could then be rejected entirely. My patent agent advised to take the first granted items on the patent and then go back and appeal for the other detail on the sheets. Eventually the USPTO office agreed so now I have two patents. Unfortunately that means I have to pay maintenance fees on two patents as well. My agent felt it was best to take what they were giving us and then appeal because they are known for turning down the entire patent.

How much does a patent cost?

Filing for a utility patent is $320 plus the agent fees. The filing fee differs for a small entity which is $160 and a micro entity which is $80. A small entity has 500 or fewer employees. To be named a micro entity, you must first quality for a small entity, have less than 4 patents under your belt and have an income less than $$212,352 from the previous year the fees were paid. Then the USPTO conducts an examination which costs roughly $800 for a utility ($400 for small entity and $200 for micro entity). The process takes roughly 2 years. Oddly enough my first patent on my sheets took 30 days. My duvet took 2 years. My patent agent told me I had the record for the fastest and longest time it took to receive a patent with him.

What patent pending means?

While you are waiting for your patent to pass, you are granted a status of “patent pending” which means you have filed a patent and are waiting to hear back from the USTPO patent office. If your patent is granted or someone else comes up with the same idea, you are still covered under the “patent pending” status. Once you are approved for the patent you have to pay an issuing fee of $1200 ($600 for a small entity and $300 fr a micro entity). Once you finally are granted your patent you are required to pay patent maintenance fees which are currently $2000 after the first 3.5 years (again small and micro entity fees are smaller), then $3,750 after 7.5 years, then $7,700 at the 11.5 year mark. As you can see, it gets quite expensive to own a patent. So it’s really only worth going after a patent if you are committed to making your patent work for you. Just getting a patent and sitting on it is not a reason to pursue one. I’ve known people to get a patent and hope that some big company out there will make an invention and then they can go after them for infringing their patent.

What is patent infringement?

Patent infringement is when someone tries to sell your patented invention. You can then hire an attorney and try to go after them. The problem with this is typically only the attorneys win. You pay your attorney thousands of dollars to defend you and the company infringing on your patent can just stop making it. If they choose to continue making the same product they can tell the courts how theirs differs. This can take years in court and you can go broke trying to protect your patent. On the other hand, if you don’t go after it and try to protect your patent, the courts will see this as you not thinking that their invention infringes on your patent. One example is when Apple filed a suit against Samsung in 2011 claiming that their products infringed on Apples patents. Apple sued Samsung for $2.75 billion in damages. Samsung filed a countersuit claiming Apple infringed on their patents. Apple won the suit hands down and were awarded $1.05 billion. Samsung appealed and it went back to court where a federal judge threw out more than 40% of the billion dollar verdict. Then another trial took place bringing the total damages awarded to Apple to $930 million. In the end both companies were found guilty of infringing on each others patents and ordered to pay damages. In the end Samsung had to pay Apple $199.6 million (a far cry from what they were first awarded) and Apple had to pay Samsung $158,400 for infringing on one of their patents. But wait, there’s more. Samsung failed another appeal and in 2018 Apple was awarded $539 million in damages. My point here is, image all the money they are spent on attorney fees fighting to have their patent upheld. Now what if you felt Samsung or Apple were infringing on your patent? Do you have the money to continue fight them? Another question would be, do you have the strength and stamina emotionally to continue a court case for 7 to 20 years? I know of inventors who have had nervous breakdowns in the process. Before you file you also want to have someone search other patents to make sure you are not wasting your time. I did this search myself for two reasons. 1) I wanted to personally see what was already out there so I could redesign my item if something was similar and 2) it was super easy to look up on USPTO.gov’s site they give complete listings of all the other patents out there. You simply search like you would on a search engine using keywords in your search. Google also has a patent search feature which I also used for backup. To hire someone to search for you ranges from $500 to $1500. The next patent is a design patent which is easier to get but it only protects how the product looks. These patents are easier to get and I would guess people get these types of patents just to put the words “patented” on their item because they were unable to secure a utility patent but want outsiders to think they are really patented? IDK to me design patents are not really worth having unless it’s just to say you have a patent. They do cost less. You can find their fee schedule on the USPTO.gov website and I’ll put a link on my podcast page at www.businessfashiontips.com: https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule Design patents are only good for 15 years from the date of the grant. The 3rd type of patent is a plant patent. And since I do not have a green thumb, I probably am not the person to go into detail on what a plant patent is, but what you need to know is a plant patent is for a plant a person can actually reproduce.

Which patent to use? Which patent do I need?

So just to recap: the three patents are 1- utility, 2- design 3- plant. A utility patent is used when you have something functional and beneficial. A design patent is used just on the look of the product and a plant patent is working with living plants.

Should I use a patent attorney or patent agent?

When I first started in business I was all about trying to do things myself to save money however, in the case of patents, I highly advise against doing this yourself unless you are very familiar with the patenting process. The reason being is patent offices always try to turn down your patent. I’ve applied for many and only once did they just gift me a utility patent. Every other time they would send my patent agent a rebuttal and he would have to argue with them as to why my patent was different. There are a lot of loopholes you have to go through to get a patent and a lot of forms, petitions and appeals that you have to know how to do. A patent attorney or a patent agent knows how to get through the process quicker and knows what the USPTO is looking for. If you’d like to save money I would suggest to go through a patent agent verses a patent attorney. They specialize in writing only patents. My patent agent actually used to work for a patent attorney, then went out on his own. So basically he did all the work for the patent attorney and the patent attorney doubled his bill from the patent agent and sent it onto the inventor. So where a patent attorney may charge $5,000 to $10,000 plus filling fees, a patent agent may charge $2500 to $5000 plus filing fees.

How do I find a patent agent?

When I was looking for a patent agent, I found mine on USPTO.gov. I found 3 agents that had won a lot of patents and then interviewed them and asked for pricing. USPTO.gov is also the site where your agent will file your patent and you can keep up to date on the patent status on this website. The one I chose is the one I felt most comfortable talking with. You’re going to be working with them for a long time (typically 2 years) so you may as well feel comfortable working with them. I cannot stress how much I appreciated my patent agent. I’ve learned that the USPTO wants to reject as many patents as they can, that’s their job. You need a strong patent agent to know their reasoning and bylaws for rejections, argue their points, and file the appeals. Believe me you don’t to spend thousands arguing your point just to have your application rejected. Your patent agent can also tell you if you’re wasting your money. They also can help find a person to do technical drawings of your product which typically range from $500-$1200. They need to work specifically with your patent agents filing and be in a specific digital image format. Something else you need to do is when you are going about making or planning your invention, keep detailed records of everything on a notebook that cannot have the pages taken out and replaced. The seam on the notebook should be glued rather than in a 3-ring notebook. Year ago they change the patent process from first to invent to first to patent. Which means if you have all your notes dated and could prove you invented this new patentable idea, you could claim ownership to the patent. Now you have to be the first person to patent the idea, so your notes are not as important but it’s just a good idea in case an employee or friend decides to go after the patent, notes on this hand can be crucial. One of my friends that has over 500 patents takes photos with everyone he meets and discusses his patents with. And inventor needs to discuss their ideas with other when they are trying to sell or license their ideas with other. Licensing is when you sell your idea and a company that licenses your idea sells your product and give you a % of each sale. This % is typically 5-8% of each sale. Which is a great % if you don’t have to do anything but collect a check. You’ll also want people like this to sign an NDA (non-disclosure agreement). This ensures in writing that they will not copy, duplicate, nor tell others about your idea. If you want to get your idea on record fast but don’t have all the details yet, you can apply for a provisional patent. Provisional patents last one year and cannot be extended. This will prevent anyone with the same idea from getting in front of you at the USPTO patent office. In other words, it holds your place in line. Keep in mind if you file a provisional patent the patent term is measured from the filing date of the provisional patent so instead of 20 years, you may only get 19 years if you waited all 12 months offered with the provisional patent.

When does patent protection begin? How long does a patent last?

Once a patent is approved it is good for 20 years so long as you keep paying your maintenance fees. You can keep track of them on the USPTO.gov website as it has an area to sign up and list all your patents and it tells you when your fees are due. If you took out a patent provision that is good for one year, you lose one year of your patent when it is issued.

Are patent costs tax deductible?

Patents are considered assets and they can be depreciated on your tax return.