INVENTION AND IP DEVELOPMENT

INTRODUCTION

Many companies, especially those that rely upon or develop technology, will have in place, or should have in place, policies and practices that ensure that intellectual property (IP) is properly created and legally protected. 

Entrepreneurs and inventors may not have formal policies and practices, but for sure, they need to have a keen awareness of the importance of IP to:

·         Provide barriers to entry of competitors,

·         Have an asset that can be valued, and

·         Enable a “fortress” of legal protection that provides security to investors.

IDEATION & PROVISIONAL PATENT APPLICATIONS

At the earliest stages of ideation development, one need not be overly critical of any idea; however, before too much time transpires, diligent efforts to further explore the idea and determine its viability must occur.

Ideas and associated inventions that are believed to be innovative, unique, and useful need to be secured by filing one or more provisional patent applications (PPAs). The most important objective of filing a PPA is to secure a priority date, which legally establishes the date for which the invention occurred.

A PPA can be filed in as simple a form as a single piece of paper using handwritten notes with as much description as can be manifested at the time. Ideally, the PPA should contain as much supporting information as possible, especially expected claims.

Once submitted, the United States Patent and Trademark Office (USPTO) will provide the inventor with a document showing receipt of the application along with the priority date.

Subsequent PPAs that expand the description and claims being made can and should be filed. These additional PPAs should be filed as rapidly as possible to better assure that the priority date or dates are well documented. There is no need to file finely prepared, word-processed documents, especially if so doing would create a delay for submission. Time is of the essence.

Obviously, inventors and entrepreneurs expect to secure a future position within a chosen market based on the strength of the innovations, inventions, and patents they are able to secure.

HIRING A PATENT ATTORNEY

Shortly after the initial burst of PPAs is filed, it is well advised that inventors secure the help of a patent attorney and file a PPA that is better prepared and more comprehensive and for which the claims are identified. This PPA would reference prior PPAs and also could be shown to potential investors. While it may be tempting to delay this better-done PPA in deference to a regular patent application, the regular patent application prepared by a patent attorney would benefit from having a greater amount of time devoted to research and writing, to maximize the probability of securing a granted patent. The NPA should be filed within twelve months of the PPA filing date.

The process of ideation, discovery, innovation, invention, and the filing of PPAs can continue for as long as the inventor or entrepreneur wishes; however, in most situations, there is an urgency to continue forward with new venture development. It is important to keep in mind that the value of the early-stage company is heavily dependent upon its portfolio of IP, principally granted patents and patents in process.

OTHER FORMS OF IP

Of course, some technology and ideas may be best kept as trade secrets.  For instance, the exact formulation of chemicals, sequencing and types of processes, and other types of technology which is easily duplicated in a clandestine environment (e.g., outside of the US) may be better kept as trade secrets.  Designs and aesthetic and visually technical details are better kept protected as patents.  Names intended for branding should be trademarked and important literature and technical presentations should be routinely copyrighted.  Not all countries respect the role of trademarks and copyrights, but they should be used for protection with the US.

FINAL COMMENT

Never forget the important role of IP!

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Rocky Richard Arnold provides strategic corporate and capital acquisition advice to early-stage companies founded by entrepreneurs wishing to successfully commercialize high-value-creation opportunities, ideas, and/or technologies. More information about Rocky can be found at www.rockyrichardarnold.com. His book, The Smart Entrepreneur: The book investors don’t want you to read, is available for purchase on Amazon at http://tinyurl.com/pv248qq. Financial software for use by startups can be purchased on Amazon at http://www.amazon.com/gp/product/B00K2KPSI2. He posts articles about entrepreneurship on his blog at http://thesmartentrepreneur.blogspot.com. Connect with Rocky on Twitter @Rocky_R_Arnold; Facebook at www.facebook.com/rocky.r.arnold; Google+ at www.google.com/+RockyArnold01.

Who Owns Your Idea?

INTRODUCTION

If you work for a company, especially a technology company, you likely signed an employment agreement which assigns all of your inventions to the company. Many creative people devote much of their lives to thinking, solving problems, and working to make their companies better; however, it may come to pass that an employee begins to wonder what it would be like to be an entrepreneur based on their own ideas and inventions. Understanding the proper time to exit your current employer, or not, is critical if you intend to ideate and invent for your own personal gain or for a company you may start.

IDEATION AND INVENTION NOT IN YOUR EMPLOYER’S AREA OF BUSINESS

Unless you have signed a very unusual agreement with your employer any ideas you develop on your own time, in your own place, and with your own resources that DO NOT involve the employer’s area of business are almost certainly yours. However, if there are any questions about potential ownership you should consult an attorney who has specific knowledge of employment law. In these situations, which are not at all unusual, you can continue working for your current employer.

PROBLEM DISCOVERY IN YOUR EMPLOYER’S AREA OF BUSINESS

Often the discovery of problems with existing technology or products occurs from a person’s employment activities (current or past). As the company typically “owns” an employee’s ideas, innovations,[1] and inventions by virtue of an employment agreement, the person intending to intellectually pursue his or her own new innovations and products in the area of the current employer’s business should immediately quit that company, lest the issues of idea ownership and conflict of interest arise. You can then continue following the guidelines below.

INVENTION IN YOUR FORMER EMPLOYER’S AREA OF BUSINESS

A departed employee is well advised to allow some period of time to lapse between his/her date of resignation and any subsequent invention activity that may be documented (and discoverable) in writing or the verbal expressions to others.[2]

Many types of discoverable records may be purposefully or inadvertently created. For instance, even months prior to departure, the employee may be tempted to copy digital files, send e-mail information home, etc. These are all discoverable records after the fact and may create problems for the former employee if he/she continues to work in the areas of the former employer. Even notes compiled by the former employee after leaving the company may inadvertently include trade secrets and data of the former employer that would be revealing of the new entrepreneur’s intentions.

To avoid the issues that are presented by a person’s anticipated future departure, the best policy is to not copy or transmit any information to external devices before departure and refrain from immediately creating written records after departure. Essentially, take nothing when you leave.  Of course, your future plans are your business and need not be revealed to any current employer.

In conducting further thinking and work, the would-be entrepreneur must painstakingly avoid any prior employer’s intellectual property (IP) in process, trade secrets, product and marketing strategies, and business implementations. Failure to avoid any actual or perceived theft of the prior company’s underlying technology and prospective IP places the entrepreneur at great risk for being sued.

As what constitutes theft is based on the prior employer’s judgment and suspicions, it is dangerous territory for the former employee to venture anywhere near the former company’s technology and nascent patent positions.

FREEDOM TO INVENT AND INVESTORS

From an inventor’s or entrepreneur’s perspective, the goal is to avoid any conflicts or gray areas with a former employer that could obstruct the entrepreneur’s eventual search for, and securitization of, investment. Even better is for the former employee to leave on good terms with the former employer.

The issue of being free to invent can become an important issue for future investors; indeed, if there is even a hint of potential impropriety on the part of the inventor or entrepreneur, investors will quickly disappear. However, once the inventor or entrepreneur is “free,” so to speak, of the former employer, the entrepreneur has the freedom to pursue his/her own ideas and intellectual thoughts.

After a reasonable period of time has elapsed, an inventor can and should establish a record of independent research, investigation, and invention for his/her ideas and innovations. And, of course, patent applications should properly acknowledge the patents and products of others and claims should scrupulously avoid infringing on the claims of others.

FINAL THOUGHTS

It may seem paranoid to have to think so carefully about the issue of who owns an idea. Inventors and entrepreneurs, however, should have a keen awareness of the debilitation affects of legal conflicts with past employers in regards to intellectual property. They also need to realize the impact on future investors by improperly exiting from a prior employer . Properly handled in accordance with law and ethical propriety and with a little patience, inventors can establish a clean starting point for their new venture.

Footnotes

[1] An employee’s ideas and innovations not related to the employer’s business are solely owned by the inventor provided they are not developed on company time or in company facilities or with company resources.

[2] Consult a corporate attorney if there is even the slightest concern or potential for conflict with a former employer.

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Rocky Richard Arnold provides strategic corporate and capital acquisition advice to early-stage companies founded by entrepreneurs wishing to successfully commercialize high-value-creation opportunities, ideas, and/or technologies. More information about Rocky can be found at www.rockyrichardarnold.com. His book, The Smart Entrepreneur: The book investors don’t want you to read, is available for purchase on Amazon at http://tinyurl.com/pv248qq. Financial software for use by startups can be purchased on Amazon at http://www.amazon.com/gp/product/B00K2KPSI2. He posts articles about entrepreneurship on his blog at http://thesmartentrepreneur.blogspot.com. Connect with Rocky on Twitter @Rocky_R_Arnold; Facebook at www.facebook.com/rocky.r.arnold; Google+ at www.google.com/+RockyArnold01.

Entrepreneurs—Learn to Ideate and Innovate

INTRODUCTION

Some ideation is spontaneous. Other ideation results from focused effort.

For inventors and entrepreneurs who typically exist more as isolated “human” islands during the early stages of a future new venture, reliance is placed on their accumulated knowledge, skills, and past experiences.

Invention and innovation occur within large organizations (e.g., 3M, IBM, etc.) as a result of highly formalized processes that harness the collective abilities of their scientists and engineers.

Regardless of the source of invention and innovation, a process that helps to systematically enable consistent thought is valuable to those wishing to become an entrepreneur.

A SUGGESTED PROCESS FOR IDEATION, INNOVATION, AND INVENTION

No matter what a person’s level of expertise is there are ways to diligently think about a problem or opportunity, starting with understanding the landscape and environment of the area of interest (AOI) to identify problem(s) and develop the vision.  An overview of an ideation process is provided in Figure 1 Of course, there may be many innovation processes—this is but one approach.

STEP 1	SELECT AN AREA OF INTEREST (AOI)	The inventor or entrepreneur should be inspired and passionate about the AOI and have supportive knowledge and skills.
STEP 2	IDENTIFY UNSOLVED PROBLEM OR OPPORTUNITY	Both primary and secondary research can be used to identify existing solutions and unsolved problems and opportunities for new products and services.
STEP 3	DEVELOP YOUR VISION	Your vision drives the creative processes needed for innovation, invention, and intellectual property development.
STEP 4	RESEARCH & DISCOVERY	Existing technology, patents, products, and services must be diligently researched and understood with a view towards identifying what new technology, innovations, and inventions need to be developed.
STEP 5	INNOVATION	The “eureka” moment occurs when something new and useful is invented.
STEP 6	INVENTION	The innovation or idea must be captured in the form of an invention and initial patent positions and trade secrets established.

 Figure 1    Ideation, Innovation, and Invention Processes

Problem or opportunity discovery is facilitated through primary research in which information and data are acquired directly from other parties in discussions at technical conferences, interviews with technical experts, and informally in a variety of settings in which conversations with others may occur. Of course, the point of this research is to collect useful information from others and not to disclose information about what you, the inventor, may be thinking. Thus, information flow is strictly one-way. Secondary research—information collected from public documents (including the Internet)—is also useful and necessary to provide as complete a view of the landscape as possible.

The processes of creating ideas (e.g., ideation)—and yes, there are processes—start with a keen awareness of a target AOI and the environment, both of which are essential to achieving deeper insights. Critical questions must be asked and answered. What are the problems within the AOI? What would be achieved if a different solution were available? What are other companies delivering now? What would the world look like if X or Y could be achieved? In other words: “What is your vision?”[1]

Vision, in the context of entrepreneurship, is the ability to clearly see a future based on the implementation of an innovation. Vision includes naturally an appreciation for the impact on society if the new venture is successful. This vision is typically not necessarily easily shared, but it can eventually be shared among a founding team and, later, a new venture and the people within the funded company. This vision drives the entrepreneur to push forward with passion and purpose.

Necessarily, the inventor or entrepreneur becomes the “vision holder,” that person who is driven the most to succeed, persevere, and deliver the solution to society. Every company needs a vision holder, and the less developed the underlying new venture or company is, the more the will and desire of the vision holder needs to be at the forefront.

Vision drives the need to be creative, a necessary prerequisite to developing the underlying idea and innovation. Creativity is achieved often in seemingly random ways, but it can be also be brought forth or encouraged through research and discovery. Sometimes, the idea does not immediately have an identifiable product and market, in which case additional thought must be devoted to the idea and its applications. Ideally, the idea results in innovation and an invention for which a product and target market is readily identifiable.

Naturally, inventors and entrepreneurs hope to achieve that “eureka” moment, when it is realized that an innovation has been discovered—an innovation that has, at first glance, not been invented or disclosed elsewhere. At that point, it is critical that the innovation be preserved in the form of an immediate provisional patent application (followed by a regular patent application within a year).

That’s it—I have personally used this process and found it to be very useful.  Hopefully, it will be for you also.

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Rocky Richard Arnold provides strategic corporate and capital acquisition advice to early-stage companies founded by entrepreneurs wishing to successfully commercialize high-value-creation opportunities, ideas, and/or technologies.  More information about Rocky can be found at www.rockyrichardarnold.com.  His book, The Smart Entrepreneur: The book investors don’t want you to read, is available for purchase on Amazon at http://tinyurl.com/pv248qq.  Financial software for use by startups can be purchased on Amazon at http://www.amazon.com/gp/product/B00K2KPSI2.  He posts articles about entrepreneurship on his blog at http://thesmartentrepreneur.blogspot.com. Connect with Rocky on Twitter @Rocky_R_Arnold; Facebook at www.facebook.com/rocky.r.arnold; Google+ at www.google.com/+RockyArnold01.

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[1] At the earliest stages, the invention may not have been developed or the innovation not obvious. This vision may be called a dream or a goal or, most appropriately, an emerging passion. But this vision sparks the creative impulses within each of us.

[2] At the earliest stages, the invention may not have been developed or the innovation not obvious. This vision may be called a dream or a goal or, most appropriately, an emerging passion. But this vision sparks the creative impulses within each of us.

ENTREPRENEURS—Research & Discovery are Key Concepts of Innovation

INTRODUCTION

Discovery is an important concept for an inventor or entrepreneur. At the earliest stages of the invention process, a vision of a future product and business may be in mind, but it remains to develop an innovation that can form the basis for an invention that can be legally protected and products that can be manufactured and sold.

The purpose of research and discovery is to find one or more solutions that are new, unique, innovative, and suitable for legal protection in the form of one or more patents.

Inventors may have innovative solutions and inventions in mind very early in the ideation process. However, it is not as easy to be certain of their uniqueness or usefulness.

Indeed, based on the author’s experience, the likelihood of an innovation being truly new is directly proportional to the amount of research and discovery that was undertaken; that is, only through diligent efforts of research and discovery can an inventor arrive at high certainty that the innovation will result in a useful invention.

No matter the degree of certainty maintained by an inventor, the processes of research and discovery need to be executed faithfully to develop the evidence and proof of uniqueness and usefulness to third parties (e.g., founders and investors).

MULTIPLE SOLUTIONS TO A PROBLEM ARE HIGHLY PROBABLE IF NOT CERTAIN

It may be that a vision can be sustained by more than one possible solution, so in thinking forward to creating a business with high sustainability and value, it behooves the inventor/entrepreneur to secure any viable solution so that the eventual new venture has the maximum opportunities within the marketplace.

Thus, finding all potential solutions requires research into what already exists in the form of existing patents that may be acquired or licensed and also defines the “territory”[1] that is protected by that patent. That information is needed so that organic development activities can take place in territory that is not protected by the inventions and patents of others. Thus, solutions may be either acquired or developed organically. An organic solution is derived solely or mostly from the independent work of the inventor or inventors.

Acquiring a patent from another party may be impossible if that patent is owned by a company that is in the business of developing products that depend on that patent. In cases involving university or government research, securing a license is possible if one has not already been acquired under an exclusive license with another party. Or, even if it’s available and licensable, the licensee expectations for remuneration may be judged to be too great. However, many licensees are flexible, so if the patent is important enough to the expected new venture, it may be momentarily secured or fixed through a short-term agreement with the licensee to not license to another party in return for a nonreimbursable retainer/fee.

The permutations possible for securing available patents are numerous, and the entrepreneur needs to be prepared to both find available patents, whether interfering or supportive, and cope with licensor requirements. The important point to remember is that other potential solutions need to be researched and understood for their impact on the entrepreneur’s plans and the inventor’s perception of the innovativeness of his/her idea and target invention. It is also good to remember that at a future point in time, investors will be conducting due diligence and asking questions about potential competing technology.

ORGANIC INVENTION AND INNOVATION

The more likely situation for most entrepreneurs and inventors is that they have an innovative idea in mind based on their knowledge and experiences within a specific area. They may be technology experts in the area and already have sound reasons for believing an invention may be at hand. The patent research discussed above in the context of potential acquisition is an essential first step in discovery even if there is no intention to acquire a patent from another party.

The principal objective in this initial research-and-discovery period is to determine that another party has not already accomplished the innovation. Part of this research is in relation to technology and patents as discussed above. The other part of research involves the exploration of public disclosures made by others that could be found in publications (trade magazines, magazines, journal articles, etc.), the websites of expected competitors, and blogs and sites found on the Internet.

Between the problem and opportunity discovery and the efforts described herein, a good and ideally excellent understanding of where innovation potential lies should be at hand. Often, and especially when more than one inventor or entrepreneur may be involved, it is useful to brainstorm about the problems, environment, existing solutions, and probable solutions. The purpose is to broaden thinking, explore potential solutions, and begin to define the fundamental elements of one or more innovations in anticipation of the coming efforts to define an invention. It would not be unusual to see an idea and innovation become modified in important ways to make sure that an invention is more likely to result in a granted patent.

SUMMARY

During the early period of time when ideation, invention, and innovation are fervently being considered by an entrepreneurial team it is vital to comprehensively conduct research and discovery to ensure that ensuing patents, whether organic or acquired, are more likely to be robust and valuable. Value of course accrues from the ability of the patent to provide one or barriers of entry to potential competitors.

Footnotes

[1] Territory, in the context of the present discussion, refers to the ideas, thoughts, applications, etc., as delineated by the claims of a patent, primarily, but also as may be revealed in any other parts of the patent. The territory defines those areas that are, in essence, off limits to the inventor.

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Rocky Richard Arnold provides strategic corporate and capital acquisition advice to early-stage companies founded by entrepreneurs wishing to successfully commercialize high-value-creation opportunities, ideas, and/or technologies. More information about Rocky can be found at www.rockyrichardarnold.com. His book, The Smart Entrepreneur: The book investors don’t want you to read, is available for purchase on Amazon at http://tinyurl.com/pv248qq. Financial software for use by startups can be purchased on Amazon at http://www.amazon.com/gp/product/B00K2KPSI2. He posts articles about entrepreneurship on his blog at http://thesmartentrepreneur.blogspot.com. Connect with Rocky on Twitter @Rocky_R_Arnold; Facebook at www.facebook.com/rocky.r.arnold; Google+ at www.google.com/+RockyArnold01.