How to Write a Description of Goods or Services for a Trademark Application

It can be difficult to write an accurate and complete description (identification) of goods/services in a federal trademark application. When describing the goods and services you are or want to sell/provide, you want use somewhat broad language, but not too broad.

You cannot broaden the identification after the application is filed. In some cases, if the description is not accurate and the needed changes would broaden the identification, the application may be lost without a refund. However, if the description is too narrow, you could give up valuable trademark protection that you could otherwise obtain.

So how do you draft a description that is just right? I’ll explain that below, but first, why does the application require a description of goods/services?

Why Do I need a Description Of Goods/Services?

Except for famous trademarks, trademarks rights generally do not extend to protect every product or service. If you use the trademark ACME for selling tooth brushes only, you can not use trademark law to stop someone from using ACME for selling sailing yachts. Consumers don’t expect that providers of tooth brushes also sell yachts.

Trademark rights extend to cover instances another uses your mark or something similar with goods/service that are the same or similar to goods/services as you provide under the mark. Therefore, the scope of trademark protection depends on the goods and/or service that you provide under the mark.

In order to let the public know the scope of your trademark rights based on the goods/services, the USPTO requires that you provide a description of the goods and/or services that the mark is or will be used on or with. The USPTO calls the description of goods/service the identification of goods/services.

How does the USPTO use the Description (Why is it Important)?

The description is important because it is what the USPTO will use to compare to other trademark registrations or trademark applications to determine whether there is a conflict. The comparisons occur in two types of situations.

The first comparison situation occurs when the USPTO reviews your application. There, the USPTO compares your mark to previously filed applications and registrations that are live. If the description is too broad, then the USPTO might find a conflict between your mark and a previous application or registration, which would not have occurred if your identification was not over broad. This problem can sometimes be corrected by an amendment to the identification that narrows that identification to avoid similarities with the prior application or registration that the USPTO asserts is in conflict.

The second comparison situation occurs when the USPTO is examining later filed trademark applications. If your description is too narrow then the USTPO might allow a later filed trademark application to be registered. But if your application had a proper description the USPTO would have blocked a later confusingly similar mark from being registered. Therefore, a description that is too narrow will not properly operate to block later filed trademark applications that would otherwise be in conflict. As a result, a narrow identification of goods and services will necessarily narrow the blocking effect of your application and narrow your trademark rights.

Now you know why an description is needed and what it is for. Next, we’ll see how to draft one.

List Your Goods and/or Services

Before selecting or writing a description of goods or services, start by making a list. The list should include all of the goods and services that you sell or provide (or intend to sell or provide) under the mark. If you are already using the mark, look at your product list, your advertising, and your website, among other areas, to complete this list. If you are not already using the mark, look at your business plan or product/service plan to identify the goods and services that you will provide under this mark.

You got Lucky: Selecting a Description from the ID Manual 

Now see if you got lucky. What do I mean? The USPTO provides a listing of pre-approved descriptions, which are found in the US Acceptable Identification of Goods and Service Manual (a.k.a the ID Manual). If you find a description(es) provided in the ID Manual that accurately and completely describes the goods and/or services that you provide or intend to provide, then you can select it and you’re done.

If you choose a description from the ID Manual the USPTO will not object to it. The USPTO charges lower fees for an application (TEAS PLUS form application) where the description(s) are selected from the ID Manual. Why? Because the trademark examining attorney will not need to review that part of your application, because the description is already pre-approved. Less work for the USPTO, less government fees.

However, many situations are not accurately or completely covered by a pre-approved description in the ID Manual. Many of trademark applications that I file require a custom written description because the ID Manaul does not completely and accurately describe all of my client’s goods / services. And if that’s true for your case, choosing a description that is “close” but not correct or complete is a problem. Such a “close” selection may result in the USPTO rejecting your trademark application, or if registered, a registration that is unnecessarily narrow, or one that is subject to cancelation as inaccurate.

If you can’t find accurate and complete descriptions in the ID Manual don’t try to force it by selecting the closest option. You’re going to have to do the hard work of writing a description.

Doing the Hard Work: Drafting an Identification of Good / Services

In some cases, writing your own description can be one of the most difficult parts of a trademark application to complete correctly. Here are some pointers that you should know.

Use a Portion from the ID Manual, if Possible

Even if the ID Manual does not have the exact description you need, it might have a portion of a description that you could use. You might take that useful portion and modify it and/or add to it to provide an accurate and/or complete description.

Do Not Merely Repeat the Class Heading

For each description you will need to select a corresponding international trademark class (“trademark classes”), which I explain below. Your description cannot merely repeat the class heading or title of classes of goods and/or services.

For example, class 25 has a heading or title of “Clothing, footwear, headgear. Providing a description of “clothing” is merely repeating a portion of the class heading, and would not be accepted. Instead more detail is needed, e.g. “clothing, namely, t-shirts, pants, and gloves.”

Similarly, computer software must be described with particularity. It is not sufficient to provide a description of “computer software.” The description of computer software should include the function or purpose. The description “computer game software” provides a purpose or field of use of “gaming.” Searching the ID Manual for “computer hardware” shows many examples: “computer hardware and software for setting up and configuring wide area networks”, “Computer operating software”, “Computer software platforms for {indicate function or use},” among many others.

Avoid Open Indefinite Words Leading A List

Avoid indefinite words and phrases, such as “including,” “comprising,” “such as,” “and the like,” “and similar goods,” “like services”, “etc.” Instead, you can use a broad term followed by the terms “namely,” “consisting of,” “particularly,” to list a specific set of goods or services within a broader term where more particularity is needed, e.g. “power tools, namely, drills” or “needle point kits consisting of needles, thread, and patterns” or “projectors, particularly projectors for the entertainment industry.”

Don’t Use Unqualified Broad Terminology if it would Fall Into Multiple Classes

The USPTO will object if the broad terminology used in the description would fall into multiple trademark classes. For example, an description of “blankets” would not be accepted without qualifying wording. “Blankets” fall into multiple classes. e.g., fire blankets (class 9), electric blankets (class 11), horse blankets (class 18), and bed blankets (class 24).

Trademark_IDManual_Search_BlanketsTo avoid using terminology that falls into multiple classes, search the ID Manual for the terminology you are considering using in the description. If the results show that terminology falls in more than one class, then you know you need more specific wording or you need to use different terminology that does not fall into multiple classes. Click the thumbnail image at the left of this paragraph to see a screenview of a search of the ID manual for “blanket”. In that screenview you can see under the “class” column there are results in classes 9, 10, 11, 16, 17, 18, 22, 24, 25, 29, 30, 36, 39, and 43. So, the term “blanket” alone is too broad.

Use Language Understandable to the Average Person

The language used in the identification should be that which could be understood by the average person, not having an in-depth knowledge of the relevant field. If terms of art of a particular field or industry are used in the description and those terms are not understood by the general population, the identification should include an explanation of the specialized terminology.

Use Proper Punctuation (Semicolon vs. Comma)

The use of a comma instead of a semicolon can be problematic. A semicolon should be used to separate distinct categories of goods or services within a single class. For example, in the case of In re Midwest Gaming & Entertainment LLC, No. 85/111552 (TTAB 2013), the prior registrant’s use of a semicolon rather than a comma in the description of services was key to the USPTO providing that registration with a broad blocking effect. In that case, the applicant applied to register the mark LOTUS for “bar services located in a casino.” The trademark board affirmed the trademark examining attorney’s refusal to register that mark based on a previously registered trademark LOTUS (Reg. No. 3,398,674) for “providing banquet and social function facilities for special occasions; restaurant and bar services.”

The applicant argued that “restaurant and bar services” should be limited by the preceding language of “providing banquet and social function facilities for special occasions.” Particularly, the applicant argued that the restaurant and bar services of the registration, “must be limited to a specific type of such services and to a specific trade channel and class of purchasers, i.e., to restaurant and bar services provided in connection with ‘providing banquet and social function facilities for special occasions.’”

The trademark board rejected this argument, stating “Under standard examination practice, a semicolon is used to separate distinct categories of goods or services.” The board continued, “We find that here, the semicolon separates the registrant’s ‘restaurant and bar services’ into a discrete category of services which is not connected to nor dependent on the ‘providing banquet and social function facilities for special occasions’ services set out on the other side of the semicolon.”

As the registrant’s “restaurant and bar services” were not limited to any particular location or trade channel, then it was presumed to cover all trade channels or classes of purchasers, including those in a casino. In other words, the registration’s broad use of “restaurant and bar services” stood on its own, separate from and not limited by “banquet and social function facilities” services. The use of a semi colon provided the owner of the registered LOTUS mark with broad blocking protection.

If a comma was used rather than a semi colon here, the result of this case would have been different. The LOTUS registration would not have blocked the LOTUS applicant. The use of a comma, when a semi colon should be used, would have narrow the blocking effect of the LOTUS registered trademark.  A narrowed blocking effect means that similar marks will be more likely to be registered and your ability to broadly protect your trademark rights will be reduced.

Do not include trademarks in the Description

Do not include trademarks in your description. If your product is designed to work with a particular other product, describe that other product generally rather than referring to it by its brand name. Not: “engine parts for use on Ford cars”, but instead “engine parts for use on automobiles.”

Do not include goods or services that you do not sell to the public

If you use marketing to promote your business (like most businesses), but you do not help others market their business, non-profits, etc., then you should not list marketing in your description of services. The description includes goods and/or services that you sell to or provide for others.

Reviewing other Registrations in the Field

In the same way that searching for descriptions from the ID Manual can give you ideas about how to write a description, so too can searching the descriptions provided in trademark registrations in the same field as you operate. Reviewing descriptions in issued trademark registrations can help you determine if you have missed anything in your description. However, it is always possible that such registrations could be unduly narrow or incorrect. Therefore you should look at number of registrations to get a better feel for whether one particular description is an outlier. And you should never use a description just because it is found in a registration if it does not accurately and completely reflect the goods or services you provide or intend to provide. Looking at other registrations is just a way to get ideas. But not every referenced registration will provide good information applicable to your situation. And sometimes there are no good examples, or at least not ones that are easily found, for a particular product or service.

The USPTO provides a first video and a second video that further discuss the identification of goods and services. And, section 1402 of the Trademark Manual of Examining Procedure (TMEP) provides additional information on the requirements for a proper identification of goods and services.

Why do I need to Select Class(es) of Goods and Services?

In addition to writing a description, the USPTO requires you to select one or more international trademark classes of goods and services from the Schedule of International Trademark Classes of Goods and Services (Schedule) that correspond to the goods and services provided in the description portion explained above. This step seems repetitive. If you already have a description of goods and services, why do you have to select one or more classes that this description falls into?

The answer is: so that the USPTO can determine how much money to charge you for the application. The Schedule divides all of the goods and services into 45 different classes.

The trademark classification system is an administrative system where the government determines how much work it will be to process your application and charges you filing fees accordingly. If you provide a description that covers many classes, then the USPTO will have to search a larger volume of prior trademark registrations and applications to determine whether your mark conflicts with any previous trademark registrations and applications.

For example, if you are going to use your mark ACME for the goods of toothbrushes, bath towels, and t-shirts, the USPTO will need to search for prior registrations and applications that claim use of ACME (or similar marks) on all of those goods and similar goods. But if you only claim the use of ACME for the sale of toothbrushes, then USPTO will have less work to search for the use of ACME (or similar marks) for just toothbrushes and similar goods. Not needing to search for mark used with bath towels and t-shirts, means its less work for the USPTO. There are less marks to search through when an application claims fewer goods or services.

Selecting the Right Class(es) of Goods and Services

You can read the description provided for each class here and select the appropriate one or more classes. Another way to determine which class(es) you should designate in your trademark application is to look at the classes provided for the same or similar goods or services provided in the ID Manual. For example, if you are going to sell HATS and you search the ID Manual for HATS. An excerpt of the results is shown below:

USPTOIDManualHats

If you sell Hard Hats then you would select class 9. If you are selling general use hats then you would select class 25.

Also as explained above regarding the description, you can search existing trademark registrations in your field to see what classes others have selected for your type of goods and services.

Technology Fields

Certain technologies can span across multiple classes. For example, if you provide downloadable trading software for the finance industry, such as software downloadable via a website  or through an app store, then you are providing software as goods. In that case, your application would include class 9, and may have a description of goods of: “Computer programs and computer software for electronically trading securities. ”

If instead you provide the trading software as software as a service (SaaS) available through a web interface, then instead of providing goods, you are providing services. In that case the correct class will not be class 9, but will be class 36. Class 36 covers financial services. An appropriate description might be “Securities trading and investing services for others via the internet.” If you provide a downloadable app as well as online trading then your application could include both class 9 and class 36.

In some cases, more than two classes might be needed for the broadest protection in the case that the technology component does not fit within the industry class. For example, if your services involve telecommunications, telecommunications consulting is in class 38 and telecommunications technology consulting is in class 42.

Conclusion

Sometimes providing an appropriate description of the goods and/or services and selecting the right is easy, e.g. hats. In many other cases, it is hard. Yet, providing an accurate and complete description of goods / services in one of the most important components of a trademark application. The description determines (1) whether your application will conflict with a prior registration or application, and (2) the extent to which your registration will act to block later filers from registration on similar marks. In short, the description and class selection impacts the scope of your trademark protection at the USPTO.

Lead image credit to USPTO here.

Trademark Application Part: The Mark (Drawing)

TrademarkApplication_Mark_and_DrawingFiling a federal trademark application online looks easy. Just fill in the blanks in the online form, right? But it is not necessarily easy. Some errors are uncorrectable and can doom a trademark application. This is the first post in a multi-part series discussing the parts of a U.S. federal trademark application. In this post I’ll discuss the mark (the drawing) portion of the trademark application. Before filing a trademark application you should considered doing a trademark search.

The mark/drawing section of the application is were you specify the mark that you want to register. You will have to choose between a standard character trademark or a special form trademark. If you intend to register a standard character trademark, then you need to know the words/characters of your mark. You can enter the words/characters of your mark in the USPTO form. You don’t need to worry about section 1-4 below. You can skip straight to section 5.

If you intend to file a special form mark, you will have more work to do. A special form mark is one where a logo, font, style, color, or other graphical element is claimed as a feature of the mark in the application. First, you will need to have a JPG version of your mark having a height and a width each in the range of 250 to 944 pixels. The drawing should show the mark by itself and not together with packaging or product in the background (e.g. the STARBUCKS COFFEE drawing below does not include a coffee cup or adjacent advertising or products). A separate part of the application, called the specimen section, is were you provide evidence of the mark used on or in relation to the goods or services. The depiction of the mark in the mark/drawing section is how it will appear on the trademark registration certificate, if granted.

1. Claiming Logo, Font, or Style Elements

What if you have a logo used together with the words/characters of your mark? Or what if you have the characters of your mark provided in a stylized form or font? Should you automatically register your mark as a special form mark? No.

In many, but not all, cases the best course will be to register your mark as a standard character mark without any claim to a logo, style or font.  Claiming a logo, font, or style element may cause problems maintaining the registration if you later change/redesign the logo or style elements. In other words, are you sure you will like the style or logo elements in 10 years, or will they need a design refresh?

On the other hand, if the words/characters of your mark are weak, then you may want to include a logo or style elements to increase the chances of obtaining a registration on the Primary Register. There are several factors that you will want to consider in deciding whether to claim a logo, font, or style elements in your trademark application and whether you should pursue multiple trademark applications.

2. Including A Claim of Color or Not

Another issue that arises when claiming a special form mark is whether to include a claim of color. Generally, you probably do not want to make a claim of color, unless the color is very important. When color is not claimed, the registration will cover the mark presented in any color arrangement.

If you do not intend to claim color as a feature of your mark, then the JPG version of your mark that you submit to the USPTO in the mark/drawing section cannot contain any color. Instead the features of your mark should be shown in black. If you are claiming color as a feature of your mark, then the JPG file should show your mark in color.

3. The Drawing: A Quality Drawing

It is important that the JPG file of the Mark (e.g. the drawing) is high quality and shows the mark without noise or graininess when applying to register a special form mark. The USPTO recommends that the image be between 300 and 350 DPI. The file showing the mark will be what is used when comparing your mark other potential conflicting marks. If a feature of the mark is difficult to distinguish due to poor file quality, this may be held against you as the trademark owner who uploaded the low quality version of the mark.

4. A Description of the Literal Elements and Drawing

StarbucksCoffeeUSPTOImageIf you choose to proceed with a special form mark, the USPTO will require that you describe the literal elements in the mark that are in the uploaded JPG file. Literal elements are the character(s) of the mark appear in the Trademark Office’s standard character set, which includes letters, numbers, and certain other symbols. For example, in Starbucks’ Trademark Registration no. 3,907,157, shown at the right, the literal element is STARBUCKS COFFEE.

Also, the USPTO will require that you provide a description of the mark. The description will describe in words the design elements and the standard characters in the mark and their spacial relationship between one another. The description of the mark for Starbuck’s registration “The mark consists of the wording ‘Starbucks Coffee’ in a circular seal with two stars, and design of a siren (a two-tailed mermaid) wearing a crown.”

If color is claimed, the USPTO will require that you list the the colors that are claimed in the application in a part of the application form providing: “The color(s) [  List of Colors Here  ] is/are claimed as a feature of the mark.”

5. Changes to the Mark After Filing Rarely Allowed

Once your application is submitted changes to the mark are rarely allowed. Therefore, it is important that your mark is presented in the federal application exactly as you are (or will be) using the mark in your business. For example if your trademark has two words, will the words be used separated by a space or will they be run together? The application should include the mark in whichever way you intend to use it. Since you need to submit an example (a specimen) of the mark used on or in connection with the goods or services in addition to the drawing, the USPTO will check to see if your use of the mark matches the mark that you claimed in the mark/drawing section of the application.

Further you should use the mark consistently (e.g. with a space or without) in all of your uses of the mark. Inconsistent use can negatively impact your trademark rights.

6. Conclusion

Gathering and entering accurate information in a trademark application for a special form mark involves more work than for a standard character mark. The first decision that needs to be made in the application process is whether you should make a special form claim in the application. For more information on the mark/drawing section of the trademark application see the USPTO videos here and here.

Lead image credit to USPTO here.

How to be a Disruptive Inventor: Lessons from Alexander Bell

TheMasterSwitch_TimWu[the inventor’s] significance is enormous…The inventors we remember are significant not so much as inventors, but as founders of “disruptive” industries, ones that shake up the technological status quo. Through circumstance or luck, they are exactly at the right distance both to imagine the future and to create an independent industry to exploit it.

On the same day in 1876 that Alexander Bell’s patent application on the telephone was filed, a patent application by Elisha Gray was filed on the same invention. Sixteen years before this, Johann Philip Reis of Germany presented a primitive telephone to a scientific group. And, Daniel Drawbaugh, a Pennsylvania electrician, claimed that by 1869 he had a working telephone in his house.

The story of the invention of the telephone is similar to other invention stories where multiple inventors independently invent the same or similar invention within a short period of time. Steve Johnson notes that this substantially simultaneous invention occurs because the invention becomes “an adjacent possible” once founding or necessary elements or parts are created, discovered, or otherwise available. Tim Wu, author of The Master Switch: The Rise and Fall of Information Empire, notes the same phenomenon. One might question whether a particular inventor’s act of inventing is ever significant, if the invention/discovery was bound to happen, by this or another inventor. Wu argues the inventor’s significant is very important for founding of disruptive information industries in a process he calls “the Cycle.”

In The Master Switch, Wu provides a look at the control and innovation in information industries, such as the industries involving the telegraph, telephone, entertainment, radio, TV, and the Internet. These information industries tend move from a freely accessible channel to a channel that is strictly controlled by one corporation or cartel.

Wu’s thesis is that the history of information industries shows that such industries oscillate from an open to closed state in what he calls, i.e. “the Cycle.” Based on this history, Wu predicts that the information industry of the Internet may move from an open platform (which it currently is) to a closed system. A separation principle is needed to protect the Internet from being turned into a closed system. The separations principle provides, in part, the following must be kept separate: those who develop information, those who own the network infrastructure on which it travels, and those who control the tools or venues of access.

The book provides a discussion of the development of the telephone industry as one example of (1) a birth of an information industry and (2) the characteristics of a disruptive inventor.

Inventor’s Enormous Value As Disruptor

Wu describes invention as making available the adjacent possible. The reality that there was no single inventors of the telephone “suggests that what we call invention, while not easy, is simply what happens once a technology’s development reaches a point where the next step become available to many people,” said Wu.  Wu notes that others had provided the tools for the adjacent possible telephone, e.g. others has invented wires, the telegraph, and discovered electricity and the basic principles of acoustics. Therefore the building blocks for the telephone were available and Bell had to put them together. Wu asserts, that “inventors are often more like craftsman than miracle workers.”

Given the regularity with which simultaneous discovery/invention occurs, should the lone inventor be accorded much significance? Wu says the inventor’s significance is still enormous:

…I would argue his significance is enormous; but not for the reasons usually imagined. The inventors we remember are significant not so much as inventors, but as founders of “disruptive” industries, ones that shake up the technological status quo. Through circumstance or luck, they are exactly at the right distance both to imagine the future and to create an independent industry to exploit it.

Bell build the telephone industry that eventually killed the prior communication industry, the telegraph industry dominated by Western Union. Bell’s patent turned out to be a critical asset for doing so.

Be an Outsider

Wu notes several conditions that help a disruptive innovator succeed. First, it is important for the inventor to be an outsider with some distance from the current industry:

Let’s focus, first, on the act of invention. The importance of the outsider here owes to his being at the right remove from the prevailing currents of thought about the problem at hand. That distance affords a perspective close enough to understand the problem, yet far enough for greater freedom of thought, freedom from, as it were, the cognitive distortion of what is as opposed to what could be. This innovative distance explains why so many of those who turn an industry upside down are outsiders, even outcasts.

Disruptive innovation supplants or destroys existing products or industries, and sustaining innovation provides incremental improvements. The outsider status of some inventors provides him/her the freedom of a disinterested party:

Another advantage of the outside inventor is less a matter of the imagination than of his being a disinterested party. Distance creates a freedom to develop inventions that might challenge or even destroy the business model of the dominant industry. The outsider is often the only one who can afford to scuttle a perfectly sound ship, to propose an industry that might challenge the business establishment or suggest a whole new business model. Those closer to–often at the trough of–existing industries face a remarkably constant pressure not to invent things that will ruin their employer. The outsider has nothing to lose.

Bell was an outsider. Bell was a professor, who taught the deaf, and amateur inventor. He worked out of the machine shop in his attic trying to transmit voice across wires. These early efforts are described by Wu as “mostly futile, and the bell company was little more than a typically hopeless startup.”

But not too Far Away

It is not any distance that will work. The right distance is needed because but too much distance from the industry or the adjacent possible puts you out of the game:

It may be that Daniel Drawbaugh actually did invent the telephone seven years before Bell. We may never know; but even if he did, it doesn’t really matter, because he didn’t do anything with it. He was doomed to remain an inventor, not a founder, for he was just too far away from the action to found a disruptive industry.

Wu credits Bell’s partnership with patent attorney, Gardiner Hubbard, a critic of the Telephgraph company, as placing Bell close enough to the industry. Hubbard formed Bell’s invention into a campaign to supplant Western Union as the dominate communications company. Here, like in the case of Telsa, the Bell brought on savvy partner to help with the commercialization efforts.

In contrast, Elisha Gray’s backer was Samuel White. White wanted Gray to focus on an acoustic telegraph. The acoustic telegraph appeared to be destined for large profits as compared to the unestablished telephone. Wu suggests that but for White’s opposition to Gray working on the telephone and Gray’s need to keep his work on the telephone secret, Gray might have developed a working telephone and patented it before Bell.

Don’t be Distracted by an Apparent Pot of Money for Incremental Invention 

Wu says, “The inability of Hubbard, White, and everyone else to recognize the promise of the telephone represented a pattern that recurs with a frequency embarrassing to the human race.” To a hammer, everything looks like a nail. Our minds are too lazy to seek out new ways of thinking when old ones will due.  “Nothing … concentrates the mind like piles of cash, and the obvious rewards awaiting any telegraph improver were a distraction for anyone even inclined to think about telephony, a fact that actually helped bell.” said Wu.

Conclusion

Wu says “through circumstance or luck” the disruptive inventor is at the right distance to disrupt an industry. However, you may be able to intentionally set yourself up for to be a disruptive inventor by exposing yourself to diverse ideas across disciplines to be in the position to recognize the adjacent possible, having some distance from the targeted industry, and not being distracted by the apparent financial gain available from incremental invention within the targeted industry.

What is a NDA (NonDisclosure Agreement)?

NondisclosureAgreement2A NonDisclosure Agreement (NDA) or Confidentiality Agreement is a written agreement where one or more parties agree to keep information that is disclosed confidential. Generally a NDA will be used when one party wants to disclose confidential information to a second party. Occasionally, a mutual NDA will be needed if both parties intend to disclose confidential information to each other.

Patent Law and Disclosures
Prior to the enactment of the America Invents Act (AIA), the United States provided a one year grace period which requires that within one year after certain activities, such as a public disclosure of the invention, a patent application must be filed or the inventor is prohibited from filing a patent application. The AIA made changes to the law which raised doubts about how and under what circumstances the one year grace period applies. The new AIA provisions have not yet be interpreted been a court.

Therefore, it is now best to file a patent application in the U.S. before any non-confidential disclosure. Further, most foreign countries do not provide a grace period and require a patent application to be filed before any public disclosure. Therefore, in order to best protect your ability to seek patent protection, it is a best practice to have a NDA signed by any person or party that you intend to disclose your invention to before a patent application is filed. However, if a disclosure has been made without an NDA, check with a patent attorney, as you still may have an option to file a patent application.

Examples Scenarios
While the safest approach is to have a patent application filed at the earliest time before any disclosure, there may be scenarios where you believe it is necessary to disclose an invention or other confidential information to a third party before a patent application is filed. For example, it may be necessary to engage an engineer to assist in creating CAD drawings of your invention. Further, it may be necessary or desirable to work with a manufacturer or designer to develop a prototype of the invention before filing a patent application. The inventor may also need to disclose the information to bankers, venture capitalist, other financial backers, or potential business partners in order to move forward with the inventors business or to otherwise exploit the invention. In these and other scenarios it is important that the inventor or invention owner obtain a signed NDA from the party that is to receive confidential information about the invention so that the disclosure does not negatively impact your ability to seek patent protection.

NDA Provisions
A NDA generally has several components. A NDA will identify the parties to the agreement. It will identify the information that the disclosing party(ies) deem confidential. It will identify information that will not be considered confidential, if any. It will require that the receiving party maintain the information disclosed by the disclosing party in confidence and to take reasonable steps to ensure that the information is not disclosed. Often the NDA provides provisions that the information can used for (1) specific purpose, such as for the purpose of evaluating potential business and/or investment relationships with the Disclosing party or (2) more generally, only for the sole and exclusive benefit of the Disclosing Party.

Some NDAs have a specific time frame where the NDA is effective, such as for 3 years. Other NDAs provide a time frame that extents indefinitely.

Trustworthy Receiving Parties
NDAs are not self-enforcing. Therefore, you should endeavour to disclose confidential information only to those that are trustworthy. If the party that you are disclosing to breaches the NDA, you will be forced to hire a lawyer and take action against that person. This can be disruptive and time consuming. Therefore, it is generally worth investigating the trustworthiness of anyone you will be disclosing confidential information to under an NDA.

Conclusion
Having a written NDA signed is an important first step before disclosing confidential information to others before a patent application is filed.

Photo credit to flickr user DaveBleasdale under this creative commons license.

Childhood Hands-on Play an Indicator of Furture Creativity

Play_StuartBrown“Unlike their elders, the young engineers couldn’t spot the key flaw in one of the complex systems they were working on, toss the problem around, break it down, pick it apart, tease out its critical elements, and rearrange them in innovative ways that led to a solution.”

Scientists and engineers at Cal Tech’s Jet Propulsion Laboratory (JPL) have over the years invented and designed major components of manned and unmanned space missions. In the 1990’s, JPL began replacing retiring engineers and scientist that started in the 1960’s. However, while the new hires came from top engineering schools, the new hires were not very good at certain types of problems solving that involved taking theory to practice. What were the new engineers missing?

Stuart Brown’s book Play: How it Shapes the Brain, Opens the Imagination, and Invigorates the Soul explores the important effect that play has on our lives.

Indicator of Future Creativity

One area that play positively effects is creativity. As Brown explains regarding JPL, the new hires had excellent grades from the best schools, but that was not enough. Nate Jones, owner of a machine shop specializing in racing tires, encountered the same problems as JPL did in hiring. Jones found that employees that had “worked and played with their hands as they were growing up were able to ‘see solutions’ that those who had not work with their hands could not.”

The managers at JPL found as similar pattern. They found the older employees, in their youth, had taken a part clock to see how they work, or made soapbox derby racers, build hi-fi stereos, or fixed appliances. The young engineers that had done the same thing–worked with their hands in their youth–were good at problem solving, but those who had not, were generally not. After making this discovery, JPL managers changed their interview process for new hires to ask applicants about projects and play they engaged in during their childhood.

In view of this Brown states, “The engineers that JPL found to be so adept were the one who had played [using] their hands in their youth…They performed well as adult engineers not because they had lots of practice working on watches, but because in a sense they were doing for work what they had always done for pure enjoyment.” This is along the same lines as  Paul Graham’s advice to hire programmers that write software in their free time.

Brown continues: “..there is a kind of magic in play. What might seem like a frivolous or even a childish pursuit is ultimately beneficial. It’s paradoxical that a little bit of ‘nonproductive’ activity can make one enormously more productive and invigorated in other aspects of life.”

Defining Play

Brown asserts that it is difficult to provide an all-inclusive definition of play, but provides that play generally has the following properties: (1) it is apparently purposeless and done for its own sake, (2)  it is done voluntary, (3) it has inherent attraction, (4) it provides freedom from time in that we can loose track of time in a state of flow, (5) it provides diminished self-consciousness, (6) it creates potential for improvisation, and (7) it creates a desire to continue doing it.

The examples provided by Brown may be anecdotal, but Brown is not the only one drawing the connection between childhood play and creativity.  If childhood hands-on play is, in fact, an indicator of future creativity, business owners and hiring managers may like to consider this factor when choosing employees or business partners.

What Corporate Attorneys Should Do About Trademarks Before Forming a Corporation

StartupA client arrives at your law office and wants to start a company and form a corporation or LLC. Your client had a company name in mind. You search the Secretary of State records for other companies with the same or similar name and find nothing. You also search the state trademark database and find nothing. You prepare an engagement agreement for the work of forming the corporation. Is your client in the clear to use the name? Not necessarily.

The formation of almost every company implicates trademark law. Every new company needs a name. That name will often be used with the relevant group of purchasers or suppliers. Therefore, in addition to counseling on whether the chosen name is protectable as a strong trademark, an attorney’s process forming a corporation, LLC, or other entity should include a trademark search or an informed waiver by the client of the trademark search. Below I explain the reasons why a search or waiver is necessary and provide an example client waiver.

Searching Secretary of State Corporate Records is Insufficient

Searching the corporate, LLC, and DBA records of the relevant secretary of state is not enough. Trademark rights, e.g. the right to use a name or other indicia to identify a source of goods or services, is controlled by federal law under the Lanham Act. As federal law trumps state law, approval of the name of the new corporation by the Secretary of State cannot be used to defend against claims of trademark infringement. The decision of the secretary of state does not authorize your client to use a name, if that name would infringe a third party’s prior trademark rights.

Obtaining a State Trademark is Insufficient

Moreover, an Illinois state trademark registration provide few benefits because they are subordinate to federal and common law trademark rights. Burger King of Florida Inc. v. Hoots, 403 F.2d 904 (7th Cir. 1968) demonstrated that an Illinois state trademark registrations is subordinate to a federal trademark registration. Steak & Brew Inc. v. Beef & Brew Restaurant, Inc., 370 Supp. 1030 (S.D.Ill. 1974) demonstrated that an Illinois state trademark registration does not grant the owner rights throughout the state. Therefore obtaining a Illinois state trademark will not insulate your client from claims of trademark infringement.

Searching USPTO Trademark Database is Insufficient

Still further, searching the trademark database at the U.S. Patent and Trademark Office is not sufficient to fully clear a name for use. This is true because in the United States trademark rights can be obtained by use alone. A registration is not necessary for a person or entity to obtain trademark rights. Therefore, searching the U.S. Patent and Trademark Office (USPTO) trademark database is not sufficient to determine whether your use of a mark is clear. Someone could have gained superior rights in the mark by use without registering.

U.S. common law provides rights based on use alone because trademarks are designed to prevent consumer confusion. Therefore, in one example, the law grants rights to trademark users where the relevant purchasing public has come to recognize a particular trademark as representing a source of particular goods/services, even if that trademark is not registered. This rule protects consumers, but increases the search burden on companies because searching the USPTO database may not find all relevant uses of a mark.

Receiving a Federal Registration is Insufficient

Further, even if the USPTO grants a trademark registration on the mark, that is no guarantee that your client can use your mark. This is true because, as stated above in the U.S. trademark rights can be generated based on use alone without any registration. The USPTO will only check the USPTO database and will not check state databases, the Internet, or common law usages to see if someone else has previously used the same or similar mark for the same or similar goods / services as your client plans.

If a prior user has superior rights, in some circumstances, the prior user can seek to have your client’s trademark registration canceled along with demanding your client stop using the mark. For example, 15 USC 1052(d) provides that a mark may not be registered if it “so resembles a … mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods or services of the applicant, to cause confusion, or to cause mistake, or to deceive….” See TBMP 309.03(c).  Therefore, if a third party was first to use the same or similar mark on the same or similar goods, that third party might be able to oppose your client’s trademark application or seek to cancel your client’s trademark registration.

In other circumstances, the prior user might have trademark rights in the geographic area that they were operating in before your client registered. Such rights might prevent your client from expanding to market and sell in that area. The way to know that your client is clear to use the mark throughout the U.S. is to have a comprehensive trademark search performed. Therefore, you cannot rely on the USPTO’s approval of the mark as clearance.

Comprehensive Searching

The comprehensive search should include direct hits (identical wording/characters) as well as marks that are similar or might lead to consumer confusion. This search frequently includes searching for homonyms, synonyms, phonetic equivalents, alternative spellings, anagrams, marks with similar components, and marks that start or end the same, or that have any other similarity.

A comprehensive search may look in federal and state trademark databases, online databases, trade directories, product catalogs, internet domain names, and the like. The goal is to find an actual use of the proposed mark, or a similar mark, whether or not it is officially registered. Third party search services may be able to provide such raw comprehensive search results. Then the search results will need to be analyzed to determine whether any of the search results present a risk.

Client Acknowledgement / Waiver

Many times a client may decide to forgo the comprehensive trademark searching due to the expense. If the client decides to skip searching, the lawyer should include a written acknowledgement of the risks and the client’s decision in the lawyer’s engagement agreement or in a separate writing. One sample acknowledgement could be:

This engagement does not include undertaking any trademark searching. This engagement does not include advising whether or not the use of the above listed Mark/corporate name would infringe another’s trademark rights. The (1) approval of a trademark application by the U.S. Patent and Trademark Office or (2) acceptance of the articles of incorporation by the Secretary of State does not guarantee you can use the Mark/corporate name and does not guarantee that the use of the above listed Mark/corporate name will not infringe another’s trademark rights.  Only a comprehensive trademark search can reveal information sufficient to provide advice regarding whether the Mark/corporate name is clear to use. Comprehensive searching and related analysis is not included within the scope of this engagement.

Name changes are disruptive and can be expensive. The client should know what risks they are taking when skipping a comprehensive search. Including a written explanation of the risks in the client engagement letter can avoid problems between you and your client down the road if valid claims of infringement are made by a third party.

Photo credit to flickr user dierken under this creative commons license.

Fending Off Competitors with Barriers to Entry: Hard Problems and Networks

BarriersToEntry_HardProblems“If you can develop technology that’s simply too hard for competitors to duplicate, you don’t need to rely on other defenses. Start by picking a hard problem, and then at every decision point, take the harder choice.” – Paul Graham

Patents are not the only barriers to entry. Sometimes the technology can’t be patented, sometimes patent deadlines are missed, sometimes there’s not yet enough money to pursue a patent, sometimes you’re not sufficiently certain whether the invention will be the next big thing so as to justify pursuing a patent. Sometimes your looking for protection instead of or in addition to patents and you already explored the legal alternatives to patenting. What other barriers are there?

Barriers to entry provide a competitive advantage in the market place. If it is too hard for your competitors to enter a market or solve the problems you are solving, then you will have less competition. With less competition, you will be able to charge a premium for your solution. Financial backers, such as venture capitalist, are often interested in barriers to entry related to your solution because those barriers protect the financer’s investment. Barriers to entry come in many forms. Below I look at the strategy of picking hard problems and building networks, among the many others that might apply.

Pick Hard Problems

Paul Graham explains why it is important to pick hard problems to solve.

Use difficulty as a guide not just in selecting the overall aim of your company, but also at decision points along the way. At Viaweb one of our rules of thumb was run upstairs. Suppose you are a little, nimble guy being chased by a big, fat, bully. You open a door and find yourself in a staircase. Do you go up or down? I say up. The bully can probably run downstairs as fast as you can. Going upstairs his bulk will be more of a disadvantage. Running upstairs is hard for you but even harder for him.

What this meant in practice was that we deliberately sought hard problems. If there were two features we could add to our software, both equally valuable in proportion to their difficulty, we’d always take the harder one. Not just because it was more valuable, but because it was harder. … I can remember times when we were just exhausted after wrestling all day with some horrible technical problem. And I’d be delighted, because something that was hard for us would be impossible for our competitors.

Seth Godin notes Ford’s advantage by taking on hard problems:

Henry Ford did the same thing [take on hard problems] with the relentless scale and efficiency he built at Ford. Others couldn’t imagine raising their own sheep to make their own wool to make their own seat fabric…

“How do we do something so difficult that others can’t imagine doing it?” is a fine question to ask today.

Build-in Network Effects

VC, Fred Wilson, notes another way to create a barrier to entry is to develop a product or service that features a network effect. Fred provides an illustrative story–read the whole story here–involving the dentist industry where the first entrant provides high priced software for managing a dental office. A second entrant run by two entrepreneurs develops a low priced version of the software with mobile apps which eat away at the first entrant’s market. Then an open source version of the software is developed, which kills the first and second entrant’s businesses. Fred concludes:

…software alone is a commodity. There is nothing stopping anyone from copying the feature set, making it better, cheaper, and faster. And they will do that. … we asked ourselves, ‘what will provide defensibility’ and the answer we came to was networks of users, transactions, or data inside the software. We felt that if an entrepreneur could include something other than features and functions in their software, something that was not a commodity, then their software would be more defensible. That led us to social media, to Delicious, Tumblr, and Twitter. And marketplaces like Etsy, Lending Club, and Kickstarter. And enterprise oriented networks like Workmarket, C2FO, and SiftScience….
[emphasis added]

Conclusion

When you build technology that requires a network of users and you gain a user base, it is hard for competitors to be successful because simply copying the software is not enough. The competitor needs users too. Getting users is (or at least can be) hard. So the “network effects” barrier to entry may simply be one type of “pick hard problems” barrier to entry.

Photo credit to flickr user Anton Steiner under this creative commons license.

How to Invent Like Nikola Tesla

 Tesla“I do not rush into constructive work. When I get an idea, I start right away to build it up in my mind. I change the structure, I make improvements, I experiment, I run the device in my mind.” – Nikola Tesla

Nikola Tesla had a theoretical approach to inventing. His theoretical approach to inventing was different from Thomas Edison’s experimental approach to inventing. Tesla would work the invention over in this mind and try to discern the fundamental principle on which the invention would be based. In my first post on Tesla, I discussed lessons for licensing inventions based on how Tesla’s AC power system was licensed to Westinghouse. In this second post, I’ll look at the process that Tesla undertook when inventing.

Nikola Tesla is an inventor best known for his contribution to the design of alternating current (AC). His AC power systems provided the foundation for the AC power systems we have today. Tesla invented (1) a new AC motor that used a rotating magnetic field, (2) a multiphase AC system used in generating and transmitting electric power, which was used in a hydroelectric project at Niagara Falls, (3) a high frequency high-voltage transformer (now known as a Tesla Coil), (4) new electric lamps, and (5) a combination steam engine and electronic generator, among other inventions. Bernard Carlson’s biography,  Tesla: Inventor of the Electrical Age, provides a detailed look at Tesla’s life and work. Here’s how Tesla took to inventing.

Theoretical Approach to Invention

Tesla explained his theoretical approach to invention as contrasted with Edison’s experimental approach:

I have unconsciously evolved what I consider a new method of materializing inventive concepts and ideas, which is exactly opposite to the purely experimental of which undoubtedly Edison is the greatest and most successful exponent. The moment you construct a device to carry into practice a crude idea you will find yourself inevitably engrossed with the details and defects of the apparatus. As you go on improving and reconstructing, your force of concentration diminishes and you lose sight of the great underlying principle. You obtain results, but at the sacrifice of quality.

My method is different. I do not rush into constructive work. When I get an idea, I start right away to build it up in my mind. I change the structure, I make improvements, I experiment, I run the device in my mind. It is absolutely the same to me whether I operate my turbine in thought or test it actually in my shop. It makes no difference, the results are the same. In this way, you see, I can rapidly develop and perfect an invention, without touching anything. When I have gone so far that I have put into the device every possible improvement I can think of, that I can see no fault anywhere, I then construct this final product of my brain. Every time my device works as I conceive it should and my experiment comes out exactly as I plan it.

It is doubtful that the final product always worked exactly as he planned it. But, the excerpt shows that he thought that moving to experimental prototypes too soon forced the inventor to get too deep in the details of the invention. When deep in the details of prototyping the inventor might loose sight of the fundamental principle at issue. In loosing sight of the principle at issue the inventor might miss the ideal version of the invention.

Invention Incubation and Refinement

The final conceived invention did not come to him all at once. Instead a long incubation period may occur. In this period the invention or idea is set aside from deliberate effort and the invention and its components are allowed to incubate in the mind. The subconscious mind is allowed to work on the problem. Tesla discussed his incubation and refining stage of the inventive process:

After experiencing a desire to invent a particular thing, I may go on for months or years with the idea in the back of my head. Whenever I feel like it, I roam around in my imagination and think about the problem without any deliberate concentration. This is a period of incubation. Then follows the period of direct effort.

I choose carefully the possible solutions of the problem I am considering, and gradually center my mind on a narrowed field of investigation. Now, when I deliberately think of the problem in its specific features, I may begin to feel that I am going to get the solution. And the wonderful thing is that if I do feel this way, then I know I have really solved the problem and shall get what I am after.

After incubation, Tesla would analyze the possible options and choose a direction. As Carlson stated, “In spite of the vast popular literature celebrating Eureka moments, Tesla found that an insight, intuition, or hunches had to be refined in the mind through rigorous thought and analysis.”

Expansive Imagination

But to come up with the ideas in the first place, Tesla needed to tap an expansive imagination. Carlson states:

“Tesla’s great strength was that he was willing to think like a maverick. With his [AC] motor, for instance, while most other investigators worried about changing the direction of the magnetic poles in the rotor, Tesla instead figured out how to create a rotating magnetic field in the stator… If everyone knocks on the front door, Tesla is suggesting, then one way forward is to go around the house and see if there is a back door. To find that back door, though, one needs to cultivate an expansive imagination…If we don’t take chances in our imagination, how can we even begin to find the maverick ideas or ideals?”

How to Invent Like Tesla

To invent like Tesla, you need to cultivate an expansive imagination. Next, gather information relevant to your field and allow information and ideas to incubate in your mind, often without deliberate concentration on the idea or problem. Once you have centered on a solution or invention, work through variations, improvements, and refinements in your mind before moving to the prototyping stage.

Licensing an Invention: Lessons from Nikola Tesla

TeslaNikola Tesla was reduced to taking work as a day laborer digging ditches after previously working as an engineer with the Edison Company and then being forced out of a company he started with two other investors. He was down on his luck, unable to find work as an inventor or engineer.  He was broke and despondent describing this time as “a year of terrible heartaches and bitter tears.” He lamented that all of his high education in science and mechanics was “a mockery.”

But in the midst of this hardship he did not give up on inventing. He continued his work and filed a patent on a hydromagnetic motor. Opportunity would come through an unexpected place–through a network connection prompted by the mere discussion of his hydromagnetic motor invention on the ditch digging job. This story shows the need for carrying on in the face of adversity.

Nikola Tesla is an inventor best known for his contribution to the design of alternating current (AC). His work on the AC motor and AC power allowed for transmission of power for longer distances. His AC systems provide a foundation for the AC power systems used today. His work on AC electricity brought him recognition and wealth in his 30’s, but in his forties his stature fell somewhat by his actions and efforts related to the wireless transmission of power. Bernard Carlson’s biography,  Tesla: Inventor of the Electrical Age, provides a detailed look at Tesla’s life and work.

The success in licensing rights in Tesla’s AC motor and AC power system patents to the Westinghouse Electric Company provides potential lessons for licensing an invention and taking it to market.

 1. Use your Network to Find A Partner

While Tesla was working day labor digging ditches, as explained above, Tesla told the foreman about his invention efforts on the hydromagnetic motor. The foreman then introduced Tesla to Alfred Brown, who was the senior Western Union Manager. Brown knew he needed the business help of Charles Peck, who he knew previously. Brown was technically oriented and Charles Peck was business savvy.

Peck and Brown agreed to cover Tesla’s development and patenting costs. They also provided him with a salary of $250 per month. The three agreed to split the profits in thirds with a third to Peck and Brown, a third to Tesla, and a third reinvested in future developments. Before focusing on AC motors, Peck and Brown first encouraged Tesla to work on a pryomagnetic generator.

Not every inventor needs a financial/business partner but sometimes its helpful. You never know who in your extended network can help. Its not clear that Tesla was asking for help from the foreman. It appears that he was merely talking about his invention. Tesla was able to talk freely about his thermomagnetic motor invention because he had already filed a patent application on it. Sometimes you might want to keep your invention confidential even after filing a patent application for business or competitive reasons (not patent reasons). But in other cases, talking about the invention after filing a patent application in conversations with others can produce unexpected positive connections and results.

2. Know When To Pivot

Tesla’s efforts at making a pyromagnetic generator ran into problems. As Carlson recounts, Tesla was “[d]istressed that he was an able to perfect this invention, [and] Tesla feared that Peck and Brown might abandon him….” But they did not. Peck had confidence in Tesla. Peck encouraged Tesla to focus his work on an electric motor.

Peck likely encourage Tesla to work on electric motors, because he was aware of the market at the time. Carlson writes, “Peck and Brown were probably comfortable with Tesla investigating motors because of the growing discussion in electrical circles about using motors in central stations.” It can be difficult to know where to pivot to. But it is important to be aware of the market developments, which can indicate where to turn next.

3. Have Something to Show

Tesla had to convince Peck and Brown that he should work on AC motors rather than DC motors. Nearly all of the central stations in the U.S. in the mid-1880’s were running DC not AC. The DC generators and the copper distribution network required Edison to sell DC systems in densely populated areas. Westinghouse therefore saw an opportunity to design AC systems that could serve dispersed populations profitably.

In order to convince Peck and Brown that AC was the way to go, Tesla devised a demonstration. The demonstration had a similar purpose as Christopher Columbus’s alleged demonstration to Queen Isabella where Columbus allegedly stood an egg on its end in order to convince the Queen to finance Columbus’ ships.

To demonstrate the power of AC rotating magnetic current, Tesla attached a four-coil magnet to the underside of a table. He placed a copper plated egg and several balls on top of the table. Tesla applied two out-of-phase currents to the magnet, which caused the egg to stand on end and caused the egg and the balls to rotate on the table top. Tesla explained that the spinning was caused by the rotating magnetic current. Peck and Brown were then impressed and supported Tesla’s work on AC motors.

Tesla learned from this that to sell others on his invention he had to provide a demonstration or a show. I think this is likely true for many inventions. It harder to sell an invention without a prototype or a demonstration that allows others to see how it will work. Oral and written descriptions often do not have the persuasive power of a prototype or demonstration that others can see and touch. In Tesla’s case the demonstration was not even a motor. Instead the rotating egg showed the power of AC. Since a motor’s function is to rotate an output shaft the rotation of a metal egg was a sufficient proxy to achieve the desired interest from Brown and Peck.

4. Have a Story to Tell

Every successful inventor must tell a story that sells the invention to financial backers, other companies, decision makers, and/or the ultimate consumer. As Carlson stated, “no idea, no invention goes anywhere unless one is willing to tell a story about it, a story that another person finds interesting and persuasive.”

Not only did Tesla have something to show, he had a story that accompanied the demonstration. His story tied his invention to a famous figure, Columbus, who achieved what others thought was not possible–sailing west without falling off the flat earth–and in doing so, made a remarkable discovery, America. The implicit link that Tesla made was that if Peck and Brown got on board with AC, they would be associated with an endeavor that would change the world.

5. File Patent Application(s)

After Tesla developed a prototype model polyphase AC motor in his lab, he proceeded to file a patent application. And instead of filing multiple applications on individual motor designs, he and his patent attorney Parker Page filed one comprehensive patent application that included not only a new AC motor, but also a new system of electrical power transmission. According to Carlson, this was a bold and unusual move at the time. However, now it is quite common to file a patent application covering an overall system.

As Tesla did, the safest position is to file a patent application before going public with the invention. In the U.S. (but not most foreign countries) there is a one year grace period, but its best not to rely on it if you don’t need to.

6. Build Your Reputation, Obtain Social Proof

Brown and Peck decided on a strategy of patent-promote-license regarding Tesla’s inventions. They decided that in order to successfully promote Tesla’s inventions, Tesla needed to gain recognition in the field. Tesla had not previously joined any trade organizations or been involved in the electrical engineering community. First, they obtained the endorsement of a known exper in the field, Professor William Anthony. Tesla demonstrated his AC motor to Anthony and Anthony was impressed. Anthony then spread the news about Tesla’s motors to his fellow engineers and discussed the motors in a lecture he gave at MIT.  Therefore, the endorsement of Anthony provided the initial social proof within the relevant community. Then, Peak and Brown contacted the technical press and Tesla’s inventions received favorable coverage there. Then Tesla was invited to give a lecture on his motor and system of electrical power transmission at a meeting of the American Institute Electrical Engineers. This set the stage for the licensing of the patents to Westinghouse.

Not every invention requires a strong technical reputation in order to gain recognition with the intended audience. However, you need to have an understanding of what your audience expects in order to gain their attention and have them take you seriously. Tesla gained the social proof within the required group in order for his invention to be taken seriously. You need to figure out what social proof and reputation is necessary or helpful in promoting your invention. And as Telsa’s experience shows, you don’t have to have a preexisting strong reputation, you can build one when you need it.

7. Make the Sale

Ultimately Peck worked out a license of the patents to the Westinghouse Company for what amounted to $200,000 over ten years. More work had to be done in the development of Tesla’s AC power systems at Westinghouse, but licensing was a step along the path that ultimately put Telsa’s power systems in commercial use.

Peck died later and Tesla was unable to find someone like Peck who could guide his inventive efforts and help sell his later inventions. Therefore, Tesla is often known for his later inability to successfully commercialize his inventions after the AC motor/power invention. Yet, as shown above, Tesla benefited from the partnership with Peck and Brown. They were able to successfully guide the licensing of this inventions related to AC power. Of course, not all inventors require a business partner. But inventors and entrepreneurs sometimes forge relationships that foster a balance between creativity/imagination and business.

Do I need a utility patent or a design patent?

Design patents protect the visual ornamentation embodied in an article of manufacture (e.g. a product). In other words, a design patent protects the way a product looks. This is in contrast to a utility patent that protects a process or the way a product functions or operates.

The Ordinary Observer
The protection afforded by a design patent is quite narrow as compared to that provided by a utility patent. Design patents are effective at preventing direct knockoffs. Courts have set out an ordinary observer test for determining whether a design patent covered a product, e.g. whether the product infringed the design patent. The court will consider whether the product and the design shown in the drawings of the design patent are substantially the same in the view of the ordinary observer.

What do your customers care about?
If customers would be satisfied with a competitor’s product that has an appearance that is not substantially the same as your product, then a design patent may not provide a large competitive advantage. However, design patents are particularly useful for product the visual appearance of products where the appearance an important factor in the purchasing decision of a customer.

Protecting Unique Portions of Product
Design patents can be drafted to cover not just the entire visual appearance of a product, but also a portion of the visual appearance of a product. In this way, the most unique portion of the product can be protected regardless of the more usual or unimportant portions of the product.

Protecting an Invention with Design and Utility Patent Protection
When concerning whether to seek a design patent or a utility patent, it is important to consider whether you would like to stop competitors from copying the visual appearance of your product (design patent protection) or the functional features of your product (utility patent protection). You might decide that you want to prevent competitors from copying the visual appearance and the functional features of your product, in which case you would file a design patent application and a utility patent application on your product.

Summary
A design patent (1) is relatively inexpensive compared to a utility patent, (2) protects the visual appearance of a product or a portion of a product, (3) is effective for preventing or stopping direct copying of the visual appearance of the product, (4) has a 14 year term, and (5) does not require the payment of maintenance fees after the design patent is granted.