Tag Archive:patents

ByCarolyn Keane

Another Inventor at Odds with Invention Promoter

Read the Fine Print before you sign.

 

Read the fine print before giving money to an invention help company

Read the fine print before giving money to an invention help company

It all sounds so good, and easy. You have spent hours and perhaps years creating your product. You have spent money making prototypes and patents. We know those are not cheap and can take years to get. You see an ad on TV and it sounds great! They can do it all! You meet with someone and they love your idea as much as you do, or so they say.

Here is the kicker. They are in it for the money. I am not saying they aren’t entitled to be paid for their work. The problem is, they rarely do work. Inventors do not ask enough questions or talk to enough people about the company they are choosing. It is based on pure emotion. They sign a contract to pay and they don’t know what they are getting in return.

Inventors are easy pickings for a lot of companies. They tell the inventor what they want to hear and the inventor jumps at the chance. Their credit card is out so fast, they forgot to read the fine print.

Here is another inventor who fell into the trap:

Oklahoma inventor at odds with invention promoter

Don’t be the next one to get burned. If you have questions, or need help, email us at info@inventingdaily.com

 

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ByCarolyn Keane

The Most Iconic (and Patented) Games

By Gene Quinn & Renee C. Quinn Dec 24, 2017

Christmas 2017 is upon us! Children worldwide will soon be comfortably tucked into their beds as they anxiously await the arrival of Santa Claus (a.k.a. Kris Kingle). This is a great time of the year to be young, or at least young at heart!

Several years ago we profiled the Top 10 Iconic (and Patented) Toys in our Christmas Eve edition. This year we decided to profile the most iconic and patented games, many of which are still likely to be found waiting for good little girls and boys under the Christmas tree. Profiled are Monopoly®, Rubik’s Cube, Battleship, and Rock’em Sock’em Robots, Twister and Simon.

We also want to take this opportunity to wish everyone a very Merry Christmas! Thank you for reading IPWatchdog.com!

 

Monopoly®

Monopoly patentIn 1935 the United States Patent and Trademark Office (USPTO) issued U.S. Patent No. 2,026,082 on Monopoly®, one of the most successful and beloved board games of all time.

As the story goes, Charles Darrow, an unemployed salesman, was struggling to support his family during the Great Depression. It was during this time that he claimed to have fondly remembered summers in Atlantic City, New Jersey, and dreamed about being a real estate mogul. These diversions purportedly lead to him formulating what has become the most popular board game of all time – Monopoly®.

Darrow felt certain he had a hit on his hands so he contacted Parker Brothers, who initially turned him down, but only after explaining that his game violated some 52 fundamental rules of a board successful game. Undeterred, Darrow marketed the game himself. As fate would have it, a friend of Sally Barton, the daughter of Park Brothers’ founder, George Parker, bought the game. At the time Mrs. Barton’s husband was the President of Parker Brothers. One thing lead to another and eventually Parker Brothers became convinced that this game, with minor modifications, could be a huge success. As a result of his invention Darrow became the first millionaire game inventor, thanks to royalty payments.

The irony, however, is that Darrow may not have invented the game at all, but rather he may have taken a locally popular game and made only a few changes. By the time Parker Brothers realized that Darrow might not have been the true inventor the game was already a huge success. To protect the game and its investment the decision was made to buy up all patents and copyrights on any related game, thereby ensuring the monopoly on Monopoly®.

 

Rubik’s Cube

One of the most popular games of the 1980s was the Rubik’s Cube, a puzzle game that proved enormously frustrating to many who attempted to unlock its solution.

Invented in 1974 by Hungarian inventor Ern? Rubik, the device was patented in the United States with the issuance of U.S. Patent No. 4,378,116 on March 29, 1983, with the title Spatial logical toy.

On a classic Rubik’s Cube, each of the six faces is covered by nine stickers, each of one of six colors: white, red, blue, orange, green, and yellow. See WikipediaA Rubik’s Cube craze captured worldwide attention in the 1980s, with tournaments and even the Guinness Book of World Records recognizing the fastest attempts to solve the puzzle.

Today the Rubik’s Cube has been a part of pop culture for decades, and has once again gained a new following with over 40,000 YouTube pages dedicated to the puzzle game.

 

Battleship

BattleshipAnother long time favorite game is BattleshipU.S. Patent No. 1,988,301 was issued on January 15, 1935 under the title Game board, the originally patented game does not bear a lot of resemblance to the one that many of us grew up playing.

The patent explains that the invention relates to a perforated game board and pins insertable in the perforations. Although the patent explains that this perforated game board could be used for number of different games, the game we know as Battleship is described.

“The game herein illustrated as in progress might be called Battleships,” the patent reads. The game is described as requiring two players to sit facing each other. “One player, making use preferably of some erasable marking means, such as chalk, places an enclosure or line around a number of arbitrarily chosen series of perforations in groups of 4 (representing a battleship), in groups of 3 (a cruiser). The patent explains that play will go back and forth with each player calling out shots at the unseen target created by the other player. “Play continues thus and when one of the series of perforations within an enclosure has been filled with pins, that ‘ship’ is ‘sunk’.”

 

Rock’em Sock’em Robots

Rock'em Sock'em RobotsU.S. Patent No. 3,235,259, titled Toy boxers, was issued on February 15, 1966. The patent explains: “It is the primary object of this invention to provide a new and amusing toy in the form of a novel boxing game manually operated by opposing players.” Inventors Marvin Glass, Harry Disko and Burton Meyer, assigned the patent to Marvin Glass & Associates, and the first version of the Rock’em Sock’em Robots game was manufactured by Louis Marx and Company in 1964.

Rock’em Sock’em Robots was a game of battling robots, with each player trying to knock the others head off the block. The Red Rocker and the Blue Bomber would battle it out inside the ring.

Designed for two players, this boxing game required each player to a robot by operating the mechanism with his or her thumbs.

 

 

Twister

Twister has to make this list just because of the patent art on display in Fig. 3 (to the left) alone.

Invented by Charles Foley and Neil Rabens, and assigned to Milton Bradley Company, U.S. Patent No. 3,454,279, titled Apparatus for playing a game wherein the players constitute the game pieces, was patented on July 8, 1969. The patent explains: “The invention relates to a method of and equipment for playing a game of skill and chance for amusement and exercise purposes.”

The game is played with a playing surface the size of a large blanket, which has “a plurality of columns of loci, said loci being of such size and so spaces as to enable the players to place a hand or a foot on any designated locus, the columns of loci being different colors…” Don’t you just love the way patent attorneys write?

A “chance device” such as a spinner is included with the game. Someone not playing (i.e., a referee) will spin the wheel and call out a hand or foot with a corresponding color, which requires the players to twist and contort themselves in order to place the appropriate hand or foot on the color. The object of the game is to move into the appropriate position without falling. If a player falls or touches an elbow or knee to the surface the game is over and the other player declared the winner.

 

Simon

Ralph Baer, Hall of Fame inventor of the video console, was also the co-inventor of this extraordinarily popular, frustrating, and fun game. Baer, along with co-inventor Howard Morrison, invented this electronic game in the late 1970s, and launched in 1978.

U.S. Design Patent No. D253,786 was issued on Christmas Day 1979 (Fig. 1 of the patent shown left). While that might seem odd to many, the United States Patent and Trademark Office issues patents every Tuesday, and December 25, 1979 happened to be a Tuesday. Obviously, all the work to allow the patent to be done was complete well in advance. In the U.S. a patent is not officially issued until it is published, which occurred on Christmas Day 1979.

For those not familiar with this iconic game, the device is made up of four colored buttons, which light in a series. The player must repeat the sequence correctly once the lights stop. Each time the player successfully completes the correct sequence the sequence becomes longer, and as the player continues the sequence gets faster and faster. This game can still be purchased today, but the new age Simon Optix seems more virtual reality headset than anything else. In an attempt to keep the game fresh for the next generation you wear the headset and wave your hand in front of the proper color in sequence. Other varieties of this classic game include the Simon Swipe and Simon Air.

 

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ByCarolyn Keane

Turning Your Patent into a Business: A Practical Guide to Equity Crowdfunding

By Irwin Stein & Adoram Shemesh
November 11, 2017

Once your patent has been awarded you may still need additional capital to turn that patent into a business. Fortunately it is not as difficult to find investors as you may think. Equity crowdfunding is on the path to surpass venture capital as the preferred way for start-ups and small businesses to raise capital.

In a nutshell, equity crowdfunding is the sale of equity (or debt) in your business directly to investors using an online platform instead of a stock brokerage firm.  It is also less expensive than hiring one. Although direct to investor funding over the internet has been around since the late 1990s, it came of age with the JOBS Act in 2012.

The JOBS Act provides for three regulations that govern distinct types of offerings. The offerings differ by how much money you can raise and from what type of investor you can raise it from.

Regulation A (Reg. A) permits offerings of up to $50 million dollars. This is a “registered” offering meaning that the company needs to file a registration statement and investor prospectus with the Securities and Exchange Commission (SEC). An audit of the company’s books for the two most recent years is also required unless the company has been in operation for a shorter period of time.

There are two main benefits to an offering under Reg. A. The first is that you can solicit and obtain funds from any member of the general public including younger millennial investors. This might be a benefit to a company whose product is targeted to this audience, like a video game company or a company whose technology might interest younger consumers as opposed to baby-boomers.

The second benefit is that once the offering is complete, the shares you have registered are freely tradable in the public market including the NASDAQ or New York Stock Exchange. There are specific listing requirements for these markets, but companies that go through this process then have access to mainstream capital markets. Also if the company does well, the shares are liquid and can be sold by the insiders.

The downside of Reg. A offerings is that they are time consuming and expensive.  It can take 6 months or more for lawyers to prepare the paperwork and for the SEC to review, comment and approve an offering.  Legal and accounting fees alone can easily reach 6 figures.  There is also an annual audit and given that you will likely have thousands of small investors; you will probably need at least one employee to deal with investor relations.

There is also the cost of finding those thousands of investors. There have been several successful Reg. A campaigns that have raised $10 million or more. The upfront marketing costs for an agency to design and execute a campaign to reach those investors can also be substantial. If you are using Reg. A to raise $10 million or more, a budget of $250,000 or more would  be appropriate.

On the lower end of the scale is Regulation Crowdfunding (Reg.CF) which allows companies to raise up to $1,070,000 per year directly from the general public. There is no need for an audit if the raise is less than $107,000 and above that only a CPA review, not a full audit of the last two years is required. There is no SEC review process, just a filing.

Anyone can invest although investors of lesser means are limited to a total investment of $2200 or 5% of the lesser of the investor’s income or net worth within each calendar year.  It is not unusual for a company raising $1 million to have thousands of shareholders who put up $100 each.  As with Reg. A the legal and marketing costs can add up.

A Reg. CF offering must be made on a crowdfunding portal (website) which in turn must be registered with the SEC. At this time there are about 30 portals that have registered and some are better than others in terms of their visibility and reputation. Several specialize and only host offerings for companies involved in green energy or companies owned by women or minorities, etc.  Selecting the right website or portal can be crucial to your offering’s success.

Most companies find that the most cost-effective way for them to raise funds is Regulation D. Reg. D is an exemption from the registration requirements of the federal securities laws. It has been around since 1982 and today is an active $1.7 trillion per year market.  That is much more than traditional public offerings or venture capital.

Traditionally these private placements were sold through stock brokerage firms and many still are.  The firms and issuers were always limited to making these offerings only to people with whom they had a prior business relationship.  The JOBS Act changed that to allow issuers to advertise and solicit investments from accredited investors, those whose income is over $200,000 a year or possess over $1 million in assets outside of their primary residence.

The vast bulk of the money raised through equity crowdfunding is raised using Reg. D. As a practical matter the cost of preparing the legal paperwork is usually less than with either Reg. A or Reg. CF.

Accredited investors are presumed to be more sophisticated and the amount of information that needs to be provided is usually less. At the same time, they often ask more thorough questions before they invest.  The company will have to designate a knowledgeable person to help investors who want to kick the tires.

Accredited investors are relatively easy to reach and because they are taking a larger slice of each offering (often a $10,000 -$25,000 minimum investment) issuers need to reach out and connect with a far smaller group of potential investors. This substantially reduces the upfront marketing costs.

In sum, a Reg.A offering raising $5 -$10 million can cost several hundred thousand dollars whereas a Reg. D offering, raising the same amount, may cost less than $50,000.  You can use Reg. D for a $1 million raise as well and unlike Reg. CF if you get a good response you can accept more than $1 million to provide your business with some extra cash.

Unlike venture capital or angel investors with equity crowdfunding the company seeking funds controls the process and the terms. The hard part is to present to investors a better deal that will make yours a more attractive investment than the other offers they receive.

There are multiple ways to structure a Reg. D offering that provides investors with a good return on their investment. For patent backed ventures; a licensing, royalty or revenue sharing structure is often possible. That allows the company to structure the financing “off the balance sheet” in a way that the owners of the company retain ownership of 100% of the equity.

There is no way to sugar-coat the fact that 90% of start-ups fail. A study published by MIT last year suggested that the likelihood of growth is 35 times higher for firms that apply for patents. That fact is not lost on investors, but you may want to remind them of this fact when you are seeking their investment.

That is one of the reasons that I am working with PatentAngels, an IP-centric investment platform that is focused on Reg D offerings for companies with registered patent rights.  The IP aspect increases the level of certainty for investors, especially when making investments online and they may not be able to meet the management team in person as traditional VC’s do. Think about it, if you made an online investment in a company with multiple unknowns, would you rather know they at least have their technology patented?

I advise any company that is getting ready to start raising funds to take the following actions:

  1. Get dressed. By that I mean get your corporate books and financial statements in order.  Have your Board of Directors in place and make certain that they are people who have some experience to the business that you are in.
  2. Have a detailed business plan that is well researched. Any investor will discount your financial projections but that does not mean that your projections should not be based in reality.  Know your market, your customers and your competitors.
  3. Hire the right people.  Having a patent is great, but investors expect execution. You are going to need marketing and sales executives and a CFO.  Hire them or at least identify them so that investors can evaluate their skills and experience.
  4. Know how much money you need and be prepared to describe how you will spend it. A line item that says “general overhead” does not tell investors what they want to know.  If you need office or manufacturing space, you should have a good idea of how much space, where it will be located and how much it will cost.  You should be able to estimate how much each executive salary and benefits will cost and how many other employees you will need.
  5. Be prepared to mount an aggressive and focused marketing campaign to drive investors to your company. There is a big difference between a presentation that says “look at this great widget I patented” and one that says “look at this great patented business I am building!”

Equity crowdfunding has created a new, intelligent and efficient way for small companies to access the capital markets. If you have taken the time and expense to obtain a patent for your product, it is certainly worthy of your consideration.

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ByCarolyn Keane

2018 BEST COLLEGES FOR ENTREPRENEURS

 

Paul Bradbury | Getty Images
Nobody instinctively knows how to build a company. They either throw themselves into the role as a first-time leader, or they begin inside a classroom at the growing number of colleges and universities now catering to entrepreneurs’ needs.

Inside these institutions, future founders and CEOs are taught the skills and — perhaps just as important –meet the people that empower them to turn smart ideas into real companies.

Each year, Entrepreneur partners with The Princeton Review to rank the top 25 undergraduate and top 25 graduate programs for entrepreneurs. The annual survey looks at more than 300 colleges and universities (including one in Mexico) and weighs each institution’s commitment to surrounding its students with world-class mentors, professors, and alumni, as well as an environment for budding entrepreneurs to thrive. (To read more about our methodology, pick up our Dec. 2017 issue of Entrepreneur.)

Related: Are Entrepreneurs Born or Made?

Click on the slideshow to see who made the list for the top 25 undergraduate programs for entrepreneurship.

https://www.entrepreneur.com/topcolleges?utm_source=newsletter&utm_medium=email#

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ByCarolyn Keane

Angry inventors accuse patent office’s appeals board of favoring Big Tech

Fed up with what he perceived as bureaucracy run amok at the U.S. Patent and Trademark Office, Paul Morinville staged a striking protest this summer, with inventors marching on the agency’s Alexandria headquarters, holding signs and burning their patents.

He said too many patents approved by the agency had been revoked by administrative law judges at the Patent Trial and Appeal Board, which he said tends to side with major technology companies in disputes with independent inventors.

“If you like to steal other inventors’ stuff, then you must love PTAB,” said Mr. Morinville, managing director of U.S. Inventor Inc., an organization advocating for stronger patent protections for startups.

Since its creation by Congress in 2012, the board has angered the inventing community, which says the review process is biased.

One judge, for example, represented Apple Inc. in private practice and then ruled in favor of the tech giant 17 times after joining the court. Another judge represented AT&T Inc. as a private lawyer and later presided over a case involving the telecommunications company.

Mr. Morinville estimates that the review board has invalidated patents in 92 percent of the cases it has resolved.

Eyebrows were raised this summer when a lawyer representing the patent office in a federal court appeal of a board decision acknowledged that the agency had added extra judges to reviews in order to achieve the desired outcome. The patent office attorney said the move was necessary to “ensure the [director’s] policy positions are being enforced.”

The Supreme Court will take up the issue in a case that asks the justices to declare the appeals board process unconstitutional.

Oral arguments in the case, Oil States Energy Services v. Greene’s Energy Group, are scheduled for Nov. 27.

Congress created the Patent Trial and Appeal Board to address complaints that the patent office was approving too many applications that were vague or overly broad. The board was expected to be cheaper and more efficient than courts to resolve patent disputes.

It handles contested patent cases through administrative proceedings known as inter partes reviews. All cases are managed by panels of three to five administrative law judges.

Inventors say the rulings often seem arbitrary and are particularly irked by what they see as a pro-corporate bent among the administrative law judges. They say anyone can bring a challenge, and the judges can continue a case even if the complaint is withdrawn.

The appeals board is not subject to review by the regular court system, which the inventor community says leaves it with little recourse.

“There is no code of conduct for PTAB judges,” Mr. Morinville said. “There is no rule of law in the PTAB, and that is what really angers people in terms of the invalidation which should rely on the rule of law.”

The patent office’s chief information officer did not respond to multiple requests for comment.

The test case before the Supreme Court involves Houston-based Oil States, a company that provides equipment for the oil and gas industry. It received a patent for a tool that pumps fluid into an oil well without fluid making contact with the wellhead.

Greene’s Energy Group of Imperial, Pennsylvania, challenged that patent through a review, and the board invalidated it. Oil States asked the board if it could amend the patent, but that motion was denied. The company then filed an appeal with the U.S. Court of Appeals for the Federal Circuit.

Oil States said the review process is unconstitutional because a patent is a form of private property and the same agency that grants a property right can eliminate it without a jury trial in federal court.

The Federal Circuit rejected Oil States’ argument and affirmed the board’s decision. Oil States petitioned the Supreme Court, which agreed to hear the case.

The Supreme Court denied similar requests over the past few years to determine the constitutionality of the Patent Trial and Appeal Board’s reviews.

Some patent analysts said Justice Neil M. Gorsuch may be the reason the court chose to hear Oil States. Justice Gorsuch, who was confirmed to the court this year, has expressed concerns about administrative adjudication in judicial opinions.

“Clearly, the court took this on to not just leave things as status quo,” said Art Monk, vice president of patent transactions at TechInsights, a San Jose, California-based provider of patent data. “They could do something radical like invalidate the entire America Invents Act or do something more benign like provide guidance on how property rights need to he handled.”

If the Supreme Court decides the board’s reviews are unconstitutional, then the ruling could restrict other federal agencies’ uses of administrative tribunals to resolve disputes. The Federal Election Commission, Securities and Exchange Commission and Federal Communications Commission are among the agencies that rely on such systems, known as administrative adjudication.

“A ruling striking down PTAB would show the Supreme Court wants to tighten the constraints on administration adjudication and could lead to challenges over other well-established forms of adjudication,” said Greg Reilly, who teaches patent law at Chicago-Kent College of Law.

Small companies and independent inventors say patents are property rights and can be revoked only by a federal court. Several groups, including conservative organizations and a coalition of patent law professors, have filed briefs in support of Oil States.

“We have judicial opinions written over the past 150 years affirming patents as private property rights,” said Greg Dolin, a patent law professor at the University of Baltimore Law School who filed a brief in support of Oil States. “Court after court and justice after justice keep saying patents are private property rights that can only be adjudicated in courts.”

Large tech companies contend that patents are public property and the same government that recognizes them can regulate how they are adjudicated.

The Patent Trial and Appeal Board system gives challengers more leeway to invalidate a patent based on the portion of the technology used instead of the entire patent.

“The PTAB and its review process are constitutional,” Mr. Reilly said. “Patents are created by federal statute, which also gives Congress the right to specify administrative adjudication. Inter parties reviews are appealable to Federal Circuit which protects due process concerns.”

Even if the court finds the review process unconstitutional, it’s not clear what would happen to the patents the PTAB has already invalidated.

“I think we could have a situation in which changes to the law don’t apply retroactively. I think there is still a lot of uncertainty surrounding this case,” Mr. Reilly said.

The debate over the Patent Trial and Appeal Board has attracted attention on Capitol Hill. In June, Sen. Christopher A. Coons, Delaware Democrat, introduced legislation dubbed the Stronger Patents Act. Delaware is the nation’s busiest jurisdiction for patent disputes. More than 6,500 patent cases were filed in federal court in Delaware in 2014, according to the most recently available data from PwC, the brand name for PricewaterhouseCoopers.

Mr. Coons said the bill would bring more balance to the board’s reviews. If passed, the bill will attempt to bar patent challengers from seeking both a Patent Trial and Appeal Board review and a district court hearing, limit board reviews to one claim per patent, and ensure a challenger has a business or financial reason to attack a patent.

“The bill requires the PTAB to use the same standards that a district court applies when evaluating if a patent claims something truly new and nonobvious, standards that are fairer because they account for the fact that inventors have already had to prove to a patent examiner that they deserve a patent,” Mr. Coons said.

https://www.washingtontimes.com/news/2017/nov/9/inventors-patent-office-favors-big-tech/

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ByCarolyn Keane

Many ‘invention promotion’ companies nothing but scams

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Inspiration is a funny thing. Sometimes it comes when we least expect it.

For me, the “a-ha!” moment often hits in the dead of night, or when I’m in the middle of a meeting or driving. We Americans are a nation of problem-solvers, and it’s no wonder that we’ve come up with some of the world’s best ideas. The list of world-changing inventions dreamed up by Americans is astounding.

Sometimes, what you or I think of as a revolutionary idea has already been tried; other times they’re not practical, not marketable or are hamstrung by red tape and competition. But every once in a while, somebody comes up with something amazing and makes millions. It’s this quest for fame and fortune that drives many people to take their idea for a “better mousetrap” and go for it.

TV shows such as “Shark Tank” have propelled many inventors to riches and glory, as celebrity investors decide whether the ideas are worth a shot. An industry has even sprung up around the potential profit in new inventions, promising to help get your idea patented, protected and marketed.

Related: Feds bite down on ‘Shark Tank’ winner

But, as some budding Edisons have discovered, many “invention promotion” companies are nothing but scams, designed to hook the hopeful into spending big bucks with dreams of getting their products to market.

Also read: Freezing your credit after the Equifax breach

Back in March, the Federal Trade Commission busted a Miami Beach, Florida-based company called World Patent Marketing, which had allegedly promised would-be inventors it could help its clients successfully develop and market their products. Instead, the FTC told a federal court, all but a few consumers found themselves shelling out big bucks with nothing to show for it. In all, the FTC’s complaint alleges, the scheme bilked consumers out of more than $10 million. The complaint also accused parent company Desa Industries and its CEO Scott Cooper of involvement in the scheme.

The company is accused of using a variety of tactics to lure new customers and reassure existing ones, such as made-up “success stories” about people the company had helped. Adding insult to injury, some customers claimed that when they tried to complain or wrote negative online reviews, the company used intimidating tactics to shut them down, including threatening them with lawsuits.

One potential inventor told the Broward County, Florida, Sun-Sentinel that he had given $300,000 to the company to promote his idea for a net device that could be attached to a cellphone case to hold keys and other small items, only to come up empty-handed.

For its part, Cooper’s legal team has noted in court filings that the invention-promotion business is risky, and that fact is made clear on its website and promotional materials as a warning to potential clients.

If you do come up with an extraordinary idea, the U.S. Patent and Trademark Office advises that you proceed carefully. The agency has a brochure at https://www.uspto.gov/sites/default/files/documents/ScamPrevent.pdf that lists some of the warning signs of an invention-promotion scam, and notes that the law requires invention promotion companies must disclose the following information:

  • The total number of inventions they’ve evaluated in the past five years and the number of those that received positive and negative evaluations.
  • The total number of customers with whom they’ve contracted for actual invention-promotion services.
  • The total number of customers who have received a net profit after working with the firm as a direct result of that relationship, as well as the total number of customers receiving licensing agreements as a result of the company’s work.
  • The names and addresses of all companies associated with the company.

If you want to find out more, visit https://www.consumer.ftc.gov/articles/0184-invention-promotion-firms, as well as http://ipwatchdog.com.

Contact Bill Moak at moakconsumer@gmail.com.

http://www.clarionledger.com/story/news/2017/09/17/many-invention-promotion-companies-nothing-but-scams/666212001/

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ByCarolyn Keane

Supreme Court of Canada Promises New Utility Test for Patents

What does “useful”, one of the basic requirements for the patentability of an invention, mean in Canadian patent law? On June 30, 2017, in AstraZeneca Canada Inc. v. Apotex Inc.(AstraZeneca), the Supreme Court of Canada (SCC) ruled that the threshold for utility is low — a mere scintilla will do. In fact, requiring anything more is not only overly onerous; it is incongruent with the Patent Act and antagonistic to the bargain theory on which patent law is based.

 PROMISE AS PART OF PATENT BARGAIN

To be eligible for a patent, the law requires that an invention must be, among other things, new, useful and non-obvious. Should a new, useful and non-obvious invention be denied patentability because a patent application and the resulting patent include a superfluous statement as to a specific level of utility that is not fulfilled at the time the application was filed?

The “bargain theory” of patent law is based on the grant to an applicant of the exclusive rights in an invention for a limited period of time in consideration for disclosure of the invention to benefit society. In recent years, a statement of utility in a patent has been considered a “promise”, forming part of the bargain. If a promise extended beyond that which could reasonably have been understood as a hoped for advantage at the time of filing the application, the patent was held invalid for a lack of utility. This is no longer the case.

In AstraZeneca, in a unanimous ruling, the SCC struck down what had come to be called the “promise doctrine” as “unsound”. In doing so, the SCC reversed years of judge-made law and more closely aligned the utility requirement with that of most of the industrialized world.

THE PROMISE DOCTRINE

The requirement that an invention must be useful is enshrined in the definition of “invention” in the Patent Act (Act). But how is usefulness or “utility” assessed?

In a 1981 decision, instead of defining what utility is, the SCC defined what utility is not. The SCC said that there is a lack of utility if “the invention will not work, either in the sense that it will not operate at all or, more broadly, that it will not do what the [patent] specification promises that it will do“. It is the latter part of this statement that led to the promise doctrine.

Over the years, the Federal Court of Canada has interpreted and applied the above language to construe a statement in a patent that speaks of an advantage, directed to what the invention will or will not do, as a promise. This “promise of the patent [was] the yardstick against which utility [was] measured” and had to be either specifically demonstrated or soundly predicted at the filing date of the application. In Canada, unlike some other countries, evidence of events after the filing of the application is prohibited. Additionally, if a patent included multiple promises, each had to satisfy the utility requirement independently.

BACKGROUND

In the above action, Apotex sought to invalidate AstraZeneca’s patent for the commercially and functionally successful esomeprazole drug, sold under the NEXIUM trade-mark, comprising salts of one of the two mirror image molecules contained in the previously known mixture, omeprazole. Both drugs are used to decrease stomach acid and treat gastric reflux and related conditions; the difference being that the single molecule was found to work better than the mixture.

Apotex succeeded at trial on its argument that AstraZeneca’s patent included a promise of utility beyond a “hoped for advantage”. Specifically, the construed promise said that the new drug is more effective than the previously known mixture and provides less variation in patients’ response.

Esomeprazole did provide an improved therapeutic profile, which did lead to a lower degree of individual variation. However, AstraZeneca did not specifically know this at the time the application was filed and only became aware of it through clinical trials that took place later. The trial court held that, on a purposive construction, the patent as a whole did not provide a sufficient basis to soundly predict this result at the filing date. Therefore, the patent lacked utility and was invalidated. The decision was upheld on appeal.

The result in AstraZeneca was due in part to the fact that the patent was a “new use” case, in which the esomeprazole molecule was previously known and the foundation for the invention was the new (or improved) use. A new use patent is subject to an elevated disclosure requirement, which is meant to prevent an applicant from making an unverified promise to obtain a monopoly on an invention that, but for the promise, would be in the public domain. Importantly, however, even under this standard, if no promise was made in the specification, a “mere scintilla” of utility would have sufficed and the patent would stand.

NEW TEST FOR UTILITY

On further appeal, the SCC considered whether a patented invention that includes a statement that could be construed to be a promise should be required to satisfy that promise at the time of filing of the application.

The biggest challenge the SCC appeared to have with the promise doctrine was that the promise could be found anywhere in the claims or the patent’s description, although the claims alone are traditionally analyzed for the other requirements of patentability and the description is only considered when there is ambiguity in the claims. The SCC concluded that there is no basis in the Act for looking to the description to satisfy utility, and doing so conflates two distinct requirements (utility and disclosure).

The SCC abolished the promise doctrine and replaced it with another, simpler test of utility that requires determination of:

  • The subject matter of invention, as defined by the claims; and
  • Whether that subject matter is capable of use for a practical purpose.

The SCC noted that any degree of usefulness related to the purpose of the invention satisfies this requirement.

WHAT’S ALL THE FUSS ABOUT?

The only reference in the Act to utility is the reference to “useful” in the definition of “invention”. The promise doctrine appears to have gone far beyond this requirement. As the doctrine became entrenched, numerous patents for drugs were invalidated for an absence of utility despite the commercial success of the drugs.

The costs to the innovative pharmaceutical industry of dealing with the promise doctrine were significant. To illustrate, after two of Eli Lilly’s Canadian patents were invalidated by the promise doctrine, it initiated a C$500-million claim against the Government of Canada, alleging that the doctrine violated the intellectual property standards under the North American Free Trade Agreement (NAFTA). Although the NAFTA challenge failed, the value of challenging the promise doctrine demonstrates how significant the SCC decision on utility will be for patentees going forward.

 

http://www.jdsupra.com/legalnews/supreme-court-of-canada-promises-new-94248/

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ByCarolyn Keane

Judge Extends Freeze on Accused Scammer’s Assets

One emotionally disabled 25-year-old New York farmer dreamed up Socially Accepted, a social networking site for people like him or others with Downs syndrome and autism to find friends.

Another North Carolina man thought he invented a device, Teddy’s Ballie Bumpers, to prevent toys from rolling too far under sofas and other furniture.

And a Broward County surgeon envisioned millions of people buying SmartNet, elastic netting snapped onto the backs of smart phones and tablets to secure objects that might otherwise drop or get lost.

They had ideas and they all testified Thursday in federal court that they were scammed out of a total of nearly a half-million dollars by a Miami Beach company.

After hearing their testimony, a federal judge extended for at least two weeks a freeze on millions of dollars in assets amassed by the head of that $26 million Miami Beach patent promotion operation — one the federal government alleges was a scam.

The assets were locked up and World Patent Marketing at-least temporarily shut down last month after the FTC sought a temporary restraining order against the company and its founder and CEO, Scott Jason Cooper.

Cooper, 43, is asking to regain control of the assets, including a waterfront mansion he bought for $3.2 million last April and a 70-foot yacht worth more than $1 million.

But he has more basic needs, attorney Michael Pineiro told the court Thursday. “He can’t access his bank account to pay for food to feed his children,” he said, adding Cooper also can’t pay his lawyers, something Cooper’s mother is currently helping with.

After four hours of argument and testimony Thursday, U.S. District Judge Darrin Gayles was not yet persuaded to lift the freeze, giving the attorneys two more weeks to obtain more information about bank accounts, credit card histories, companies and trusts which may shed light on whether more assets exist.

So far, a court-appointed receiver has found World Patent Marketing, or WPM, had gross revenues of $26 million from November 2014 through January 2017, but has only about $350,000 left in the bank.

Cooper is also seeking to restart the company, but the receiver, Jonathan Perlman, is for now siding with the government, saying “it is unlikely that WPM can be operated profitably, while also lawfully.”

“It is undisputed, and Mr. Cooper agrees, that no WPM inventor has ever realized a profit from their invention using WPM’s services. Nor has any customer, through WPM, sold a meaningful number of units,” Perlman wrote in a report filed Wednesday with the court.

Read the rest of the story:

https://www.nbcmiami.com/investigations/Judge-Extends-Freeze-on-Accused-Scammers-Assets-418650953.html

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ByCarolyn Keane

Court Issues Temporary Restraining Order Against Invention Patenting and Promotion Company for Unfair and Deceptive Trade Practices

There are many businesses focused on helping inventors develop and monetize their ideas.  There are companies that, for instance, help people seek patents on their inventions, license their inventions, turn their ideas into tangible products, and promote those products.  World Patent Marketing in Florida bills itself as one of those companies.  But according to a complaint filed by the Federal Trade Commission this month, World Patent Marketing is in fact “an invention-promotion scam that has bilked thousands of consumers out of millions of dollars.”  The FTC charges World Patent Marketing with committing unfair and deceptive trade practices in violation of Section 5(a) of the FTC Act. On March 8, the Southern District of Florida found that the FTC was likely to succeed in proving this charge and issued a temporary restraining order.

Read more at http://www.jdsupra.com/legalnews/court-issues-temporary-restraining-50911/

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ByCarolyn Keane

The Inventors’s Dilemma: Drafting Your Own Patent Application When You Lack Funds

By Gene Quinn
October 22, 2016

financial crisis dollar on a white backgroundFrequently inventors are faced with a dilemma that is all too common for entrepreneurs. Generally speaking, most will bootstrap a project, whether it is an invention or start-up. That means long hours working without compensation, without revenue and not enough money to do everything that really needs to be done in a perfect world. Lack of funding presents great challenges.

The first entrepreneurs’ dilemma that inventors typically face is with respect to whether to hire a patent practitioner or to simply go it alone and prepare and file a patent application. Obviously, if you can afford competent legal representation that would be the best path to take, but entrepreneurs, and inventors, rarely have the funds available to do everything that really needs to be done. Thus, corners sometimes need to be cut. That is just the nature of business.

The problem with cutting corners in the patent space is that there are so many pitfalls lurking around nearly every corner. Indeed, representing yourself can be a little like taking out your own appendix. If you have acute appendicitis and you are hiking in the mountains many hours away from the nearest hospital taking out your own appendix looks like a much better option all of the sudden given the alternatives. But ordinarily you wouldn’t dream of removing your own appendix. Similarly, if possible you really shouldn’t be representing yourself as you seek a patent. There will be times, however, when it is either do at least some of the work yourself or the project just can’t move forward.

Not surprisingly, many inventors faced with this entrepreneurs’ dilemma will decide to proceed on their own, at least initially. That is a perfectly fine choice, but it needs to be done with eyes wide open. It also requires the do-it-yourself inventor to become as knowledgeable and familiar with the process of describing an invention and drafting a patent application as possible.

The problem with cutting corners in the patent space is that there are so many pitfalls lurking around nearly every corner. Indeed, representing yourself can be a little like taking out your own appendix. If you have acute appendicitis and you are hiking in the mountains many hours away from the nearest hospital taking out your own appendix looks like a much better option all of the sudden given the alternatives. But ordinarily you wouldn’t dream of removing your own appendix. Similarly, if possible you really shouldn’t be representing yourself as you seek a patent. There will be times, however, when it is either do at least some of the work yourself or the project just can’t move forward.

  1. What are functions or features that consumers will identify as an advantage?
  2. Are those functions or features likely to be patentable or contribute to the patentability of your invention?
  3. What other solutions currently exist that consumers could identify as substitutes for your invention?
  4. What patents or published applications exist that relate to your invention? If there are patents are they in force or have they expired?

These questions are critical because they will start to get you thinking about your invention in a different way; in a way that most inventors are unaccustomed to thinking. The truth is that with any invention there will be pieces, parts, features, functions or characteristics that are more likely than others to contribute to patentability. A patent attorney would need to identify what those features are, so you should as well. Inventors absolutely must start with identifying the patentable feature. Only then can you really ever determine whether moving forward with a patent application makes sense.

For example, it might be interesting that your new widget is the first of its kind to be painted yellow, but will painting it yellow contribute to the patent examiner believing you’ve invented something worthy of a patent? No. What you need to do is identify the inventive concept and decide whether that is enough to warrant the time investment and cost associated with obtaining a patent. Hopefully that inventive concept will be something that consumers will identify as an advantage. Remember, obtaining a patent costs money so the only way it will make sense is for you to be able to charge a premium for your product or service. If you patent something that consumers do not perceive as an advantage that usually winds up being a poor business decision in the long run.

In addition to focusing on the core of what makes the invention unique, which will hopefully be perceived as an advantage, you need to know what else is available on the market, and what else has been patented or attempted to be patented. For you to get a patent your invention must be unique when compared with the prior art (i.e., that which is known, such as those things available on the market, patented or published in patent applications). You simply cannot know whether what you have is unique unless you compare it to what is known to exist. That means you absolutely must know what previously exists and then compare it to your invention. This means you are going to need a patent search. While it makes sense to do your own search it is generally the case thatinventors find little even when there are volumes of relevant information to be found, so a professional patent search can be a very worthwhile investment even if you are going to otherwise attempt to do the rest of it (or much of the rest of it) yourself.
The last critical thing from the list above deals with whether any previously issued patents that relate to inventions that address the same problem have expired. This is an absolutely critical consideration because once a patent expires the invention and all obvious variations of the invention fall into the public domain. When a patented invention falls into the public domain anyone could use that invention or any obvious variation of the invention for free. It can be very difficult to compete against free unless what you’ve come up with provides a significant advantage. Therefore, it is important to not only consider the existence of the prior art, but it is critical to consider whether there is prior art that is too close that has now fallen into the public domain and is freely available. Potential licensees will consider this, and so should you. It can be a major hurdle to a business deal, which means it is better to know up front rather than after you’ve invested large amounts of time and money.

For those who are going to go it alone I’ve created a self-help system – The Invent + Patent System™ – which has helped many thousands of inventors create provisional patent applications. Even if you wind up deciding to hire a patent attorney using this system can and will help you create a much more detailed disclosure of your invention, and get you to think about things you undoubtedly never would have thought about otherwise. If you are going to go it alone I strongly recommend you consider using it, but frankly any inventor could benefit from using the system. I also recommend you do as much reading on IPWatchdog.com as possible, focusing on those articles that relate to completely describing your invention in a patent application. Specifically, at a minimum I recommend the following articles:

Each of these articles mentions and links to other articles, so please read as much as you can. If you are brand new to the subject you might find it most easy to start with Invention to Patent 101 – Everything You Need to Know to Get Started, which is a tutorial broken down into discrete reading assignments that start with the basics and get more and more complex as your knowledge progresses.

Best of luck, and happy inventing!

Before you decide to embark on the path of preparing your own patent application, even a provisional patent application, there are a few questions about your invention you really need to consider. Ultimately, whether you decide to go it alone and do-it-yourself or you hire a patent professional, having this information at the ready will greatly facilitate the process.

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