When I shared my first ‘big’ idea with my Silicon Valley patent attorneys, they absolutely loved it. I would never be able to count all the income it would generate me, I remember them saying. So, per their recommendation, I agreed to pay a Washington D.C. firm nearly $2,000 to search for prior art — meaning existing patents, primarily — on my concept of a rotating label. Was this a truly novel invention? When the D.C. firm failed to uncover any intellectual property that described a rotating label, I quickly filed two patent applications largely out of fear that someone else would beat me to it.
A few months later, the CEO of Procter & Gamble invited me to present my innovation to the company’s technical group. The meeting lasted a whopping 10 minutes. As it turned out, their legal team had done their own prior art search — and found two patents filed 50 years earlier on my exact concept. And I mean exact.
“Mr. Key, we will not pay you two pennies for this idea,” I was told, as a sheet of paper with patent numbers on it was slid across the table. Everyone then walked out.
Upon reviewing said patents, my attorneys recommended that I not pursue this idea. The patents I had rushed to file turned out to be worthless. Apologetic, they explained to me that searching for prior art is like trying to find “a particular leaf on a tree.”
I was perplexed, and couldn’t let it go. I hadn’t invented the concept of a rotating label. Okay, that made sense — it seemed pretty obvious. But why had I never seen one on a product in the market, then? Increased labeling space was a big benefit. It seemed unlikely that P&G had invited me out just to embarrass me.
So, what had gone wrong?
I poured over the older patents until it dawned on me that they failed to include a method of manufacturing. One had never been established. What these patents described was merely a concept no one knew how to manufacture or apply. They meant nothing.
If I could bring a rotating label to market, I reasoned, I could still profit from it. And that’s exactly what I did. While the Spin Label was never widely successful, it appeared on national brands like Nescafé coffee in Japan and Jim Beam here in the United States, ultimately generating millions of dollars in profit to me through licensing. Today there are 20 patents in my name related to this technology. In 2011, it won two Edison awards.
So, what did my patent attorneys miss?
Prior art does not determine profitability.
The advice they gave me was from a legal perspective. From a business perspective, the opportunity was still enormous. And therein lies the rub. It is unwise to draw too many conclusions based on prior art alone. You must be able to identify your point of difference in the marketplace. My attorneys overstepped their bounds twice: First, when they told me how profitable my idea would be, and again when they discouraged me from moving forward.
Do not misunderstand me. Searching for prior art is incredibly useful and important. You should use what you discover to forge a roadmap. But ultimately, if the idea or technology in question does not exist in the marketplace, but it does in prior art, your job is to figure out why.
In other words, don’t focus on patentability. You can get a patent on just about anything. (To give credit where credit is due, a priceless piece of advice I received from my patent attorney was, “Protecting is easy. Selling is the hard part.”)
My experience, though painful, was invaluable.
For one, it taught me that I would need to do my own research moving forward. (And indeed, when I searched for prior art on the concept of a rotating label, I quickly found the 50 year-old patents P&G’s legal team had discovered. Leaving me to wonder what my attorneys had instructed the search firm to look for in the first place….) I’m not saying there isn’t value in hiring a third party firm, just that doing so is not a replacement for doing your own initial research.
Time and time again, I have watched patent attorneys attempt to protect aspects of an innovation that do not have any real value in the marketplace. The intellectual property you file must support your business objectives, the subtleties of which you — and only you — can determine. You do not want your patent attorneys getting creative on you. To ensure the intellectual property you file has value, you must provide your legal team with clear directions and the bigger picture.
The legal perspective is consumed by what might or could happen. As an entrepreneur, my concerns are much more practical. How is the intellectual property I file going to move my business forward? That question is always on my mind, because patents are strategic tools that can be used for so much more than defending your ownership in court.
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For example, you can use the intellectual property you file to raise money for your startup. Having patents pending takes away fear from investors. You can use intellectual property to secure licensing agreements with companies — even ones that have no intention of prosecuting if infringement occurs, because that’s at best a slippery slope.
I hate to say it, but patent attorneys are very good at selling fear. Statements like the following are subtle, yet highly effective.
“You had better protect that innovation before someone else does.”
“Sounds like a great idea — you’d better protect it.”
Putting fear into the equation is just wrong, in my opinion. Has the individual done research? Is this idea actually unique? What about marketability?
But if more patent attorneys posed questions like these, they’d have fewer clients. Frankly, it’s not their responsibility to, as these are business questions.
I cannot say it enough: The last thing you want to do is rush to obtain a patent without fully grasping how you will use it to profit.
At the end of the day, your patent attorney will only ever be as useful as the information you supply him with. Which is why I always make sure to share my marketing materials with my patent attorneys. I need them to understand what it is I’m selling so that my claims are truly valuable to my investors, licensees, distributors, and/or customers.
The job of your patent attorney is to protect your innovation/invention, and that’s it. It’s not to give you business advice. Whether or not you should file a patent and move forward with a particular product or service idea is a strategic question, not a legal one.
The business advice my patent attorneys gave me wasn’t great. But their legal advice was indispensable — once I honed in on a point of difference that had value, which was figuring out how to manufacture rotating labels at low costs and high speeds.