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Martin Fruitman: Patents don't guarantee financial success

Posted: April 29, 2010 3:14 p.m.
Updated: April 30, 2010 4:55 a.m.
 
A patent will not make you rich. Sure, there have been people who have accumulated great wealth from new ideas, but there are also people who have won the super-jackpot lotteries. Have you ever met any of them? I suspect the odds are better for winning one of those big lotteries than for making a killing with a patent.

Large companies do not buy ideas from outside inventors. That is what they pay their many engineers to do, and outside inventors are more likely to sue the company than come up with a valuable idea.

I once read an article that stated the automobile companies received 300,000 "invention" letters a year. It would take an enormous staff to just evaluate that many ideas. Most companies send back a rejection letter of some sort. Some are honest, and say they just do not accept ideas from outside, and some send back a letter that includes an agreement one must sign. The agreement states you are giving them the idea free and clear, and they can pay you or not pay you as they see fit.

The companies are trying to get the ideas for free. Rather, it is that they want legal protection if you have suggested an invention that someone in the company is already working on.

One other type of letter sent out states a company will only consider patented inventions. That is because they would then know what they cannot do without paying for it, but it also probably means, "Go talk to a patent attorney and let him talk you out of it."

So what good does a patent do? It probably does nothing, unless you are in business or about to start a business for selling the product. The fact is, that in our world you can sell things, but you cannot sell ideas. Selling an idea is sort of like trying to sell a lottery ticket for a highly inflated price - before the lottery drawing.

Even for the small business, a patent does not really do what most people think it does, because suing someone for copying your patented invention costs way too much for most of us to be able to start such a law action. The true benefits from a patent, and even a patent application (a patent pending), are more subtle, but they are real.

One benefit is credibility in the marketplace. Listen carefully to TV commercials, and you will occasionally hear them mention that a product is patented. That is because most people have the impression that a patent somehow means that the product has the "blessing" of the U.S. government. Actually, the only thing the U.S. Patent Office has decided is that it is different, not that it is better.

Another benefit is very real, that a patent - and particularly a "patent pending" - makes the competition hesitate about copying the product. That is because, for at least 18 months, the patent application is confidential, and nobody can find out just what it covers.

That means a competitor that copies the product could end up being sued, and in the business world, such an added risk is usually enough to keep the competition at bay, at least until the patent is issued and they know what is protected.

This discussion should make it apparent why I sincerely believe that, unless you are already selling a product or about to start selling it, a patent is not very valuable.

One other aspect of U.S. patent law is worth noting. In the U.S. (and not in any other countries) you can still file a patent application for one year after you have first offered the invention for sale, used it publicly or distributed a written publication.

In practical terms, that means you can put the product on the market first and test-market it to see if it is worth patenting. Just keep in mind that it takes several months for most patent attorneys to prepare an application, so you probably have only about eight months to make the decision about a patent.

Martin Fruitman is a Valencia patent attorney. He can be reached at (888) 769-4332. His column reflects his own views and not necessarily those of The Signal. "It's The Law" appears Fridays and rotates between members of the Santa Clarita Valley Bar Association (www.SCVbar.org). Nothing contained herein shall be or is intended to be construed as providing legal advice.

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