My idea is patented... Now what?

[Deleted17784]

What's up people.

I had an idea for a new product. I found a manufacturer through Alibaba and had some prototypes made. I'm ready to take the next step and market this thing and I found that this idea is patented... I guess I should have checked on that before... Ready, fire, aim approach on this one.

Anyways, there is nothing like my idea on the market but the patent exists. What should I do about this? Contact them? Move forward anyways and ignore it? Chuck my samples in the trash and cry like a baby?

Just wondering if any of you folks had this issue and pushed through it.

Cheers.

 

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[BeDoHave]

I'd contact the patent owner and ask if he/ she had any plans of actually bringing the product to market and what actually prompted them to register the patent in the first place. You could even tell them your ideas for the business and if you really believe in the product, try to come to some sort of agreement to buy the patent, or get distribution rights/ permission to sell your product under the patent.

 

[Deleted17784]

Thanks. I will reach out to them and see what happens. What confuses me is I see two patents that match my idea... The patents are very broad and cover a lot of things. As I said before, I don't see my idea or anything like it on the market.

 

[jlwilliams]

You have a couple of choices. You can either work with the current patent owner or you can take a step back, look at this with the idea of "how do I make this better?" then patent that improvement and run with it.

A lot will depend on how the patent holder reacts. A lot of people patent an idea and think that owning the patent will make them rich. They think that owning the idea means they deserve half your money for all you do. Some people are so wrapped around the idea of control that they won't let anybody make their idea because they want "all the money" for it. I assigned a patent for a single digit percentage royalty and made a ton of money while my accountant tells me another of his clients patented his idea, made it himself in his garage and got ten or twenty grand over the same two decades. I dealt with a big company who could produce, market and protect the IP better than I could and had a solid reputation in the industry, and that worked for me.

Owning a patent doesn't make any money. I allows you to preclude others from making your patented idea. Owning an idea doesn't make money. Selling product makes money. The lease or sale of the patent is just one wheel in the big machine that makes the product and therefor the money. If the patent holder will license to you for a couple percent, then make money and pay them. If they want half (and yes, I've heard that line of crap from aspiring inventors) then screw it. Move on. Either patent your improved version and make that, or just find another product or idea to run with.

I really should write a book about my experience with the patent. It changed my life, taught me a lot, and it is a cool story.

 

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[Deleted17784]

Thanks for the response. Let me know when your book is completed.

 

[JPHerrmann]

Just like jlwilliams said, Improve the products and make the new patent. That is legal. WORST CASE, if the original patenter is nothing but difficult, Manufacture the product in another country and sell to foreign markets.

 

[Deleted17784]

Just like jlwilliams said, Improve the products and make the new patent. That is legal. WORST CASE, if the original patenter is nothing but difficult, Manufacture the product in another country and sell to foreign markets.

Thanks for the reply. That's an interesting idea... If it's a US patent then I'm still good to go in other countries? That's a possibility if all else fails.

I've been reading about patents for a few days now and my head hurts.

 

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[JPHerrmann]

Well its extremely common that companies in china imitate current american patented products and sell them in asia and europe. The law of US patents ends at US borders. I would assume you would need to research foreign legal systems, theres always weird barriers in other countries. To be really sure that you can sell your product in certain countries, consult an attorney that specializes in international business affairs, he will do the leg work and put it in easy words for you.

Good Luck

 

[jlwilliams]

International patenting costs a ton and is only worth it if you have the ability to market globally. US patents only control US market, but if they have a US patent and are actually making the product they may well have PCT (Patent Cooperation Treaty) protection.

If they have a US patent and aren't willing to play ball, then I'd really think long and hard before putting resources into overseas manufacture and foreign marketing. The US is the biggest, most retail consuming-est game on the block. If you are going to lift a finger marketing anything, you want to target the US market. You speak the language, you (from appearances of your posts) live here. This is where you need to be selling. If you can't sell this product in the USA, find another product. It's that big of a deal. That is why you owe it to yourself to figure out how to make this work. Make this work, or find something else that works.

Take a look at who owns the patents. Is it an individual or a company? What do they make? While your product may be contemplated by their patent, your product may or may not represent market competition. Maybe it's a win-win for you to pay them a little to let you make something they don't make. Is it assigned (which is an indication it may be being produced somewhere) or is it just an issued patent gathering dust? How old is it? A fairly fresh patent with years and years left on it, or is it a couple years from expiring? All of that will factor into how you should approach the owner. If it's new and held by or assigned to a manufacturer, they may or may not want to hear it. If it's owned by a guy who drafted it up and did nothing with it and it has five years left on it, he may be inclined to listen to any offer. Lots of patents are filed by academics because it makes them an "expert" while others are filed by people who (because of who they work for or whatever) may not be allowed to license or assign it to anybody. Lots of maybes. Do as much research as you can. Figure out who they are. Figure out what you will be willing to pay to license the patent (1%? 3%? 15%?) What is it worth, and what's it worth to you?

There is a huge up side to your idea already being patented by someone else that you may not have considered. If you hold a patent, it's up to you to chase down infringements and to do it on your dime. Sure, Customs will seize patent infringements when they find them. They catch less than they miss. When you own a patent and someone brings copies in from China, it's up to you to sue them for damages. Lots of patent holders spend more time and money chasing infringements than they spend focusing on building and selling the goods. (That being one reason we assigned to a strong company, they had the means to and track record of protecting their IP). When you find this patent owner, the un said leverage you have is that if he doesn't make a deal with you, there is no guarantee you won't just make and market the goods from behind the protection of a legal entity that will make it really, really hard to get anything out of you. If he want's 10% and you want to pay 1% and settle at 3% or 5% and you pay him (tax deductible on your end) then you are really doing him right. If, on the other hand, you patent an idea and start building it, and some other guy goes on AliBabba and rips you off; you can either sue him (if you can find him) or just accept the loss which I assure you, will keep you awake at night. Being the marketer/mover/shaker DO-er who actually makes product and pays the inventor a legit royalty, you will sleep at night as your bank account grows. If you license (basically rent) the rights and build the product, you get the benefit of having legal enforceability to your market monopoly. You can make the goods. You can sick Customs on infringers. You aren't obligated to sue at the risk of losing your rights by failing to enforce them, but you have standing to sue if you so choose.

Licensing a patent buys the rights to make the product. Owning a patent bears the responsibility to enforce it and nearly assures you the probability of paying big lawyer's bills.

Research the patent and it's owner. Formulate an offer based on what you want to make, price point, percentage vs lump pay out and so on; then approach them. Set a time limit for action. Say two weeks to research online and make a plan. Then make a phone call on the Monday of the first full business week of '15.

 

[Deleted17784]

Great stuff here. Thanks a lot! I will keep you all posted on what happens.

 

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[Phenom]

Nothing much to add sorry. But it seems like @jlwilliams gave you some solid advice. @jlwilliams please do write that book.

 

[JAJT]

Personally I'd hire a patent lawyer to look over it and advise me on how to proceed.

Lawyers pay for themselves in spades when it comes to issues that require tremendous expertise like this.