Determining whether your invention will be successful or not is an integral part of being an entrepreneur. Here are three reasons inventors are outsourcing the review process to increase efficiency.
When entrepreneurs and companies invent new products or technologies, they are understandably reticent to share their ideas with outsiders. After all, the business landscape is cut throat. They do not want to risk giving away their competitive edge. Still, most entrepreneurs are aware they need some feedback to ensure that their ideas are viable. They may form an internal review team to analyze their prototypes and conduct a market analysis.
While this choice may seem logical, internal invention reviews can be a waste of time and money. External reviews are a smarter choice. For instance, consider independent taste testers, who food companies outsource sensory testing of their products to in order to capture a broad and objective range of preferences. Beware of in-house reviewers, who are often incapable of delivering the objective analysis and insights you need to make sure your product does not fail.
We will come back to the point about internal reviews inherently being nonobjective. There are additional reasons to outsource the invention review process. For starters, internal reviews can require significant time and money. Since the team members tasked with the review are employees, they may have to balance this assignment with their other responsibilities.
Generally speaking, internal reviews can take up to 30 hours at minimum, although they can take up to 30 days at larger companies. If you are paying employees over $75,000 per year (and, in the case of an attorney, far more) and you assign several people to the task, you are looking at thousands of hours and potentially hundreds of thousands of dollars to conduct your internal reviews, when they could be working on developing the top ideas and technologies instead. Be aware of where you’re spening money, as very little of your review expenses should be on the front end.
In addition, internal reviewers are not necessarily trained to conduct these types of analyses. A quality product study includes thorough research into your market, competitors and patent prospects. Someone who is not trained to vet ideas for commercial potential will not be able to generate the level of insights and recommendations you need to screen a technology. By comparison, external teams specialize in product analyses.
Privacy can be a concern when inviting outsiders to review your ideas. However, a non-disclosure agreement or confidentiality clause can prohibit external reviewers from revealing any sensitive and proprietary information. There are both legal and business incentives to adhere to these guidelines as the reviewers want to build a reputable business and are not in the business of stealing ideas for themselves. If the right safeguards are in place, you can trust that the review process will not expose your business’s important competitive information.
Here are three ways in which an outside review is more advantageous than an internal report.
Unlike your team members, review agencies focus solely on compiling invention reports. They can turn around an analysis much faster than your internal staff, and it will include a SWOT analysis, competitive research and intellectual property (IP) research – all the information you need to decide whether to move forward.
While some consultants charge high rates, many third-party vendors offer fast and affordable services. Instead of paying salaried employees to produce a lackluster review, you can secure a top-quality analysis at a fraction of the cost, freeing up your employees to concentrate on the development of your best ideas and IP assets.
I promised we would come back to this and saved it for last because I cannot stress it enough. When it comes to evaluating your commercial prospects, objectivity is everything. You need input from professionals who have no stake in the product’s performance. A third-party team is solely concerned with getting you informed answers and giving them to you with no pretense. Their jobs and egos do not depend on your product’s success. Those are the people you want reviewing your invention because then you will have solid feedback and perhaps fresh insight into whether your idea can be successful.
The worst thing you can do for your company is go to market blindly or with misinformation. Sourcing high-quality evaluations from professional invention reviewers will provide you with the necessary knowledge to help your company succeed. Whatever the reports contain, it will give you the knowledge to make informed decisions and develop ideas the world really needs and wants.
Biomedical engineer Melanie Watson had plenty to grapple with when prenatal tests during her second trimester revealed her daughter, the second-born of two, had a very serious genetic condition called trisomy 18. In this condition, instead of normal two chromosomes on the 18th chromosomal pair, there are three.
Half of all babies born with trisomy 18, or Edwards syndrome, die within the first week, with many others stillborn. Only 5 percent to 10 percent live beyond age 1.
“She is my miracle baby,” Watson said of Claire Juliette Watson-Ray, now 5½. It’s important to get the one-half in there “because every day counts,” said the Trine University assistant professor of biomedical engineering, who earned her undergraduate and doctorate degrees from Louisiana Tech.
Watson has fought every day for her fragile daughter’s life, not accepting the no-hope pronouncement given by doctors at the Texas hospital where Claire was born and not giving up when Claire, at age 14 months, was diagnosed with liver cancer.
That tenacity and resolve to give Claire the highest quality of life possible is what also led Watson on a journey to seek an innovative solution to quickly and easily perform routine blood tests so Claire — and anyone with a health condition that requires frequent blood testing – can do so wherever and whenever they want, with results sent via a cell phone to the doctor.
The eighth version of the hand-held, blood-testing device prototype is now being 3-D printed, and Watson is in the process of patenting the invention. It is the culmination of more than five years of research and development, and Watson’s entrepreneurial endeavors through her company Blaire Biomedical have drawn high praise from regional and state funders. She was recently named one of two first awardees of support through Indiana’s Elevate Ventures’ new Community Ideation Fund.
The fund, created in 2018, enables ideation-stage high-potential companies to move closer to a specific, measurable technology or product development milestones through an investment between $5,000 and $20,000. Eligible applicants include Indiana-based companies with headquarters in communities under a partnership with Elevate Ventures, and with no more than $50,000 in trailing revenue over the past 12-month period.
Elevate Ventures, a venture development organization based in Indianapolis, Ind., provides entrepreneurs with the expertise and resources needed to transform ideas into profit-making companies. The Community Ideation Fund $17,500 convertible note will help Watson move ahead with final development of the blood-testing device by hiring a part-time design engineer.
“We need to improve the optics (in the device) in order to increase the accuracy of blood tests,” Watson said, noting this funding and a recent $1,000 micro-grant from the Elevate Northeast Indiana Farnsworth Fund, plus additional funding she is seeking through other regional and state sources is crucial. “It is essential for up-and-coming entrepreneurs to get into the seed round to draw venture capitalists and angel investors.”
Already available is a hand-held blood glucose testing device that operates similarly through a phone app, but Watson said there is no other such device on the market that can perform multiple blood tests.
“There has to be a better way” To read the rest of the story click:
The patent troll narrative has dominated our cultural consciousness ever since a clever Intel lawyer coined the term in the early 2000s. Even if you know nothing about patents, you’re probably familiar with the concept. Companies with no intention of producing anything buy up overly broad patents to extort other businesses with. Do you remember when the podcast This American Life devoted not one but two episodes to the subject? I do.
It was so persuasive that legislation — the Leahy-Smith America Invents Act (AIA)— was passed in 2011 to address it. Congressman Thomas Massie (R-KY), an award-winning inventor and successful entrepreneur, began his term the year after Congress passed the AIA.
He perceived the legislation would be damaging, he told me in a phone interview earlier this month, and he was right. It has been. (Read some of the reasons why I believe independent inventors are in danger.)
As an undergraduate at MIT, Massie invented a haptic computer interface in 1993— enabling users to “feel” virtual objects. His thesis advisor encouraged him to reach out to the technology transfer office on campus. With the university’s help, he obtained patent protection. Without it, he is certain he wouldn’t have been able to raise the funds he needed to commercialize the initial prototype.
It took three to four years and $9 million dollars to create a version for consumers.
Thirty patents stem from his initial invention and improvements. Now owned by 3D Systems, his technology is still in use today.
On June 28th of this year, he introduced the Restoring American Leadership in Innovation Act of 2018 into the House of Representatives (H.R. 6264). It is co-sponsored by Congresswoman Marcy Kaptur (D-OH) and Congressman Dana Rohrabacher (R-CA). Its goal is to roll back some of the “worst parts” of the AIA, Massie said.
Others have been sounding the alarm about the adverse effects of the AIA for some time now. They include the Innovation Alliance — a group of research and development-based technology companies from a range of industries, including Qualcomm; patent experts writing on IPWatchdog.com and for the Center for the Protection of Intellectual Property; innovation policy advocates at Inventor’s Project; and activists from US Inventor, a not-for-profit.
To Massie, the relationship between strong patent rights and the incentive to innovate could not be clearer.
“Ideas never get developed if no one can recoup investment from them,” he explained. If ideas were made free and anyone could develop them, he thinks there would be less development of ideas — not more.
Notably, H.R. 6264 abolishes the Patent Trial and Appeal Board (PTAB), the body established by the AIA to review new kinds of patent challenges.
One very successful inventor I know has been tied up in the PTAB system ever since an infringer challenged his utility patent. It’s been years now. Before the AIA, he earned sizable royalties from a licensing agreement for 10 years uneventfully. Originally issued 13 claims, after battling seemingly endless rounds of appeals, he’s down to one. Meanwhile, while his patent remains under re-examination, infringers have flooded the market and sales of his invention have been cut in half.
Massie’s bill explicitly restores patents as a property right, which would reverse a recent Supreme Court decision. As he put it, “Who is going to build a building on a piece of property when someone could say two years later, ‘We reviewed your deed, and you don’t own this property.’”
In its attempt to police malevolent actors and rid the system of overly broad patents, did Congress tip the scales too far against independent inventors and small business owners? Maybe.
“It’s an economic decision, whether to steal or license. Which is cheaper?” Massie explained. There’s even a phrase for it: Efficient infringement. In 2015, Joe Nocera described it as follows in his New York Times op-ed “The Patent Troll Smokescreen.”
That’s the relatively new practice of using a technology that infringes on someone’s patent, while ignoring the patent holder entirely. And when the patent holder discovers the infringement and seeks recompense, the infringer responds by challenging the patent’s validity.
Not everyone agrees, of course. For some, the patent troll issue reigns supreme. There really are far too many bad patents, that perspective contends — which is why processes like inter partes review (IPR) are necessary and good. Filing an IPR is cheaper than going to court.
Andrea Evans, an IP attorney who spent five years examining patents and trademarks at the USPTO, sees that as a potential benefit. She recently celebrated her firm’s 11th anniversary.
“I do think the Patent Trial and Appeal Board is necessary, because I like the idea of having a resource for people who cannot afford to go to federal court. It’s a faster process and less expensive,” Evans noted, adding that it must be policed properly.
Evans hosted the first day of a conference of inventor group leaders from across the country put on by Inventors Groups of America, an organization I co-founded last summer. It took place at the United States Patent and Trademark Office with the help of the United Inventors Association. We were all cheered when Andrei Iancu, the new director of the USPTO, stopped by unannounced to deliver a supportive message.
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When a company copied their invention, Natasha and Fred Ruckel began investigating — and got an inside look into how products are ripped off.
On Valentine’s Day in 2015, Natasha Ruckel and her husband, Fred, were sitting in their living room in Gilboa, N.Y. Natasha was improvising on the piano, and Fred was listening while messing around with the couple’s cat, Yoda. Fred noticed a ripple in the living room rug, forming a half circle on one side. Again and again he tossed toys into the ripple and a delighted Yoda darted in and out. Natasha looked up from her playing. “That’s when we came up with the idea for the Ripple Rug,” she says.
The Ruckels, who had spent around 25 years earning their living in marketing and advertising for brands from PepsiCo to ESPN to Hasbro, were already in the midst of creating their first venture: an app that provided a way for amateur photographers to monetize online images. But they both agreed that the Ripple Rug was a better bet.
A couple of days later, Fred went to Home Depot and bought some cheap pieces of carpet, and they got to work on a prototype. When they had that, they launched a Kickstartercampaign in May 2015, pricing the American-made product at $39.95, to test the market. Within 30 days, they received $15,000 in backing. They had the products made in Georgia for $15 each, and filled the orders.
The Ruckels were weighing their next step when, that fall, the opportunity of a lifetime hit. QVC, in conjunction with the Today show, hosted an ongoing competition called the “Next Big Thing” for entrepreneurs with new retail products. Participants presented their offerings on the TV program, and the winning products received an order from QVC.
Following an arduous vetting process — including proof of a multimillion-dollar insurance policy, a guarantee of having 1,500 items available for sale and sample videos of the Ruckels in pitch mode — Ripple Rug made the cut. “We drove into New York City, and at every exit, we practiced the pitch,” Fred remembers. “We were there by 5 a.m. and hardly slept the night before.”
They sold a few hundred units immediately. QVC bought 1,500 more and Ripple Rug became a top seller. “It was pretty damned amazing,” says Fred. “We were profitable out of the gate, which is virtually unheard of. It felt like a great moment.”
It was, and it wasn’t. Over the next 14 months, the Ruckels learned that coming up with a truly original innovation attracts not only devoted customers but also the kind of highly organized, deep-pocketed bootleggers who rip off products and systematically grind their inventors into the ground — both financially and emotionally. “It creates so much discord that you are willing to give up the dream of entrepreneurship and go back to your day job,” says Fred.
In the thick of battle, however, the Ruckels learned critical lessons: the importance of copyrighting assets before launching; the reality that people will steal everything from your marketing pitch to your product to your advertising photos; the need to continually patrol for ripoffs and take action. They also got a darkly fascinating glimpse of how ruthless, well-funded, deeply sophisticated bootlegging operations work — and how, with tenacity, vigilance, a good lawyer and the right strategy, they can be beaten.
To read how they won, here is the rest of the article:
Read the Fine Print before you sign.
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:
Don’t be the next one to get burned. If you have questions, or need help, email us at email@example.com
Josh Malone, the inventor of Bunch O Balloons, won a $12.3 million judgement against Telebrands’ recently. Josh’s patents were challenged at the Patent Trial and Appeal Board (PTAB) and were found to be invalid. However, the Eastern District of Texas found that the patents were valid and also found Telebrands’ and others had willfully infringed the patents owned by Tinnus Enterprises and Zuru that cover the toy, Bunch O Balloons. Zulu and Tinnus are now looking forward to enhanced damages since the jury found willful infringement by Telebrands’.
Another patent used to protect the invention of Malone was challenged by Telebrands’, but the PTAB did not grant the petition for hearing since the same issues and the same prior art had been reviewed by the examiner in the application for patent. This may show that the tide is starting to turn in favor of the inventor in further reviews of patents in this on-going battle.
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.
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 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.