Planning, Startups, Stories


Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

5 Signs of Patent Sharks Preying on Your Dream Invention 0

I’m really sorry to be the one to throw a bucket of cold reality splashing over inventors’ dreams. But darn, patents don’t mean what they once did, and businesses preying on patent hopefuls are not ethical businesses. These are shark-filled waters. Be careful.

What brings this up is this email I received last week through my ask-me form on my website:

We took a draft of an invention that would be something the everyday person could use and would be used on a daily basis. We went to an Arizona patent office and spoke with the director there. A few days later he called and said he had really great news for us. He and other people in his company wanted to patent it and try to market it, but with no guarantees. The process would take about 5 months and 13,ooo dollars to patent and to try to get it to market. Again, no promises, and if they can’t get it on the shelves it just wasn’t going to happen and they wouldn’t except it if they didn’t believe it would work. That is my life savings and i am nervous. I know to patent it my self would be cheaper, but i wouldn’t know how to market it.

Can you see what I worry about in that message? There are two clear alerts, danger signs, in this message.

  1. The wolf-in-sheeps-clothing factor: The email calls it “an Arizona patent office” as if it were a government office or some kind of public sector agency. But it’s not, clearly, because it’s talking about applying for a patent and taking a product to market. And charging money for promising to do it. My guess is it showed up on the Google search in the paid search results, as in the illustration here.
  2. The business proposal: ”He … wanted to patent it and try to market it.” But “with no guarantees.” So what, precisely, is he really offering to do, besides take the money? The only real thing offered for $13,000 is to apply for a patent. That could be as little effort as filling in the forms and editing the formal description of the inventions. What recourse is there when if the patent application sits forever without action, or is rejected? Are they giving the money back? What if the supposed “market it” yields nothing? Isn’t then “sorry, we did our best but your product failed” with no money back and nothing lost by the vendor?
  3. Skin in the game: Why aren’t they offering to do this for a percentage of revenues or profits, or, alternatively, asking you to take a royalty percent if they do it at their expense? Both of those would be more reasonable business models for a relationship between inventor and entrepreneur. They take no risk. They give no assurances.
  4. The amount of the offer: $13,000 might reasonable buy legal advice and polishing and formatting information for an application. If it came from a reputable lawyer, I wouldn’t be surprised. I don’t know what this invention is so maybe I’m wrong; maybe it’s so good that it will sell itself, just from having the patent. But If it’s like 999,999 of every million ideas, then to go from invention to design to prototype to product and take that product to market for that little money is absurd. Many self-started single-person service businesses start with that little money, but not when it’s paid to a third-party provider. And product businesses, with patents, marketing inventions? No.
  5. The division of labor, and expertise problem: Attorneys provide legal advice, not business building, not marketing and sales. Marketing and sales and business-building services don’t fill out patent applications. So what’s up with this? No self-respecting attorney would offer to take the product to market. (I’m not an attorney, but, attorneys reading this: am I right?). Yes there are plenty of competent and honest attorneys with patent or intellectual property specialty who could review the invention and offer advice about marketability and patentability. They would be explaining to this person the realities of applying for a patent. If the invention doesn’t lend itself to patenting and developing a business, then a good lawyer might give this person the bad news  for just an hour or two of fees, probably less than $1,000. And if it is the one in a million, then a good lawyer will just do the legal for it, rather than pretending that one person can do the whole thing. In many cases — and I think this is one — the honest professional makes a clear distinction between the services they do and those they don’t.
My recommendation in this case is to find a good attorney to help. If you have no idea…
  1. Contact your local Small Business Development Center, Womens Business Center, chamber of commerce, or business school in nearby college, university, or community college. Ask for help.
  2. If you have friends or relatives in business, ask them for recommendations finding the right attorney. Check references. Be skeptical. But there are good ones around, for sure, and a lot of them.
  3. And if an attorney you trust recommends it, then apply for the patent. And do it realizing how much more you have to do before you make money with it.