The Disclosure Dilemma: an Inventor’s "Catch-22"
How to Talk About Your Invention Before It's Protected
by Mike Marks
An inventor’s greatest fear is often that someone will steal his or her idea. This fear is justified and is a good and understandable reason to keep an idea secret. With few exceptions, however, an inventor needs help to turn an invention into a product. Secrecy is an impediment to getting help. This is the dilemma: those most useful and capable of giving help may also be those to be most feared. The dilemma begins at the concept stage when an inventor wants to confirm the validity of an idea and continues through distribution when a product is publicly sold.
How to talk about your invention when it's unprotected:
- Compare it to products that are already on the market. "It's a better mousetrap." Do not say "there's nothing like it." Find something that exists that it can be compared to. "It's like a ____ but better."
- Describe some of the benefits - faster, less expensive, more fun, more effective.
- Thie ability to describe what you have while keeping it secret is very important when you first contact a company and hope to get them interested enough to sign a Confidentiality Agreement.
An inventor can protect "proprietary rights" with patents and confidentiality agreements. Often, however, the protected "proprietary rights" are far less than an inventor would like. The "proprietary rights" granted in a patent exclude anything obvious or already known in the public domain. The "proprietary rights" generally acknowledged in a corporate confidentiality agreement are limited by what is known in the public domain along with what may be disclosed by other inventors and what may already be known or in development at the company itself.
The definition of what is in the public domain may cause more grief for an inventor. It is a vague concept that may include not only all of the expired patents in all countries of the world but also all written records available in all of the libraries of the world... and more!
How, short of getting a patent, does an inventor know if his or her idea is really unique and not in the public domain? He doesn’t. Even when a patent has been issued, it can be challenged. In what can only be described as a Kafkaesque nightmare, an inventor may never really know if a patent is any good until a law court has, at great expense, actually ruled that it is.
At this point the inventor may feel daunted and decide that since the entire body of knowledge of mankind, since the beginning of time, might be considered public domain, then almost any idea can be legally stolen. This is sort of true.
BUT, this stretches a little far. Most patents are respected and challenging a patent is difficult. Respectable companies are not in the business of stealing ideas from inventors. In fact, most companies cherish inventors and place a high value on new ideas, especially marketable ideas that receive patents. (For general information on patents please refer to the article, Protecting Your Invention. For more detailed information please consult with an attorney and refer to the book, Patent It Yourself).
Moreover, at this early stage, most individuals and companies are too busy with their own plans and ideas to really take the time to steal someone else’s idea - no matter how good - with one, very crucial, exception. If an inventor allows a company or an individual to invest time or money in an idea, then the investor will feel certain rights to that idea.
An inventor might therefore be only somewhat careful with disclosure (maintaining special respect for patentability issues) and petrified of investment.
In my own company, WorkTools, Inc. we have resolved the disclosure dilemma in the following way. (PLEASE NOTE THAT THIS IS NOT A RECOMMENDATION AND INVENTORS ARE ADVISED TO CONSULT WITH A PROFESSIONAL ADVISOR BEFORE MAKING ANY DISCLOSURE. The following is only an example of what WorkTools has done). WorkTools is in the business of developing and licensing patented hand tools and other consumer products. Because patents are expensive and many ideas are not worth the cost of a patent, WorkTools’ projects are often disclosed to certain individuals and companies before a patent has been applied for. The disclosure process is crucial in determining an idea’s commercial viability and, in turn, the value of obtaining a patent. WorkTools’ disclosure process can be seen as a series of steps.
STEP 1, PRODUCT EVALUATION: Using a process similar to the Invention City Survey, WorkTools’ employees survey family members and close friends. In general, if at least 50% of those surveyed do not say "yes, I would buy it," an idea is dropped. This survey process may also be extended to professional acquaintances such as car mechanics, carpenters and plumbers. No formal confidentiality agreements are used, but each person with whom the idea is shared is told that the disclosure should be kept secret.
STEP 2, MANUFACTURABILITY EVALUATION: At this stage WorkTools is engineering the product for manufacture and is in contact with numerous outside companies. Each company contacted by WorkTools is asked to sign a confidentiality agreement.
STEP 3, DISCLOSURE TO PROSPECTIVE LICENSEE: By this time WorkTools will have filed at least a Provisional Patent with the US Patent and Trademark Office. Each company contacted by WorkTools is asked (or demands of WorkTools) to sign a confidentiality agreement. WorkTools believes in disclosing an idea to only one company at a time. This gives the first prospective licensee a real competitive advantage over others in an industry. WorkTools encourages a prospective licensee to invest in a WorkTools’ invention believing that the more a company invests the more likely a licensing agreement will be reached. WorkTools begins this process with its best or favorite prospect and only moves on to other companies if the first prospect says "no." In this manner, WorkTools feels that the threat of being ripped off is reduced. It’s easier for a company to agree to a reasonable licensing agreement than to fight an expensive court battle. In general, WorkTools frowns upon putting an idea on the auction block and offering it to the highest bidder.
INVENTORS SHOULD BE EXTREMELY CAREFUL ABOUT PUBLIC DISCLOSURE. Public disclosure of an idea can reduce or eliminate "proprietary rights" and some or all options for patent protection, especially outside of the United States. Definitions of what constitutes public disclosure are not absolute. INVENTORS ARE THEREFORE ADVISED TO CONSULT WITH A PROFESSIONAL ADVISOR BEFORE MAKING ANY DISCLOSURE. Books such as Patent It Yourself (highly recommended) and other publications available at the Invention City Bookstore may be helpful.
The issues of disclosure do not fade once a patent has been issued and a product is on the market. If a product is successful it is virtually certain that copies, knockoffs, will appear. Some knockoffs will be in direct violation of patents issued or pending. Others will be more or less legal - even though they may have been inspired by the original, patented, product. WorkTools has addressed the issue of direct patent violations by trying to persuade a violating company to change its design so that it is not in violation. This has been successful with some companies when it has been accompanied by an opinion on what, exactly, WorkTools considers its patents to cover - THIS TYPE OF DISCLOSURE IS NOT RECOMMENDED UNLESS INFORMED COUNSEL HAS BEEN SOUGHT - SPECIFIC LEGAL RIGHTS MAY BE LOST BY TAKING SUCH ACTION. The value of persuasion is that an expensive court battle and confusion in the marketplace may be avoided. Disclosure of a company’s own opinions on what a patent covers may be a necessary ingredient for persuasion to work.
It is hoped that none of this will dissuade an inventor from moving forward. While the risks are real, so are the rewards. The world market is huge. Even if an inventor does not have the only design for a product, he or she can have a good one and make plenty of money with it.
Mike Marks is President of Invention City and has been active in the field of product development since 1987. In conjunction with WorkTools, Inc. he has brought numerous products to market directly and through licensing agreements with others.
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