Florida Intellectual Property Law Blog

Not a day goes by that I don’t get a call from a distressed business owner who – after using one of those ‘trademark filing’ services online – contacts me because their trademark got rejected.

And it always brings to mind the origin story of the lucky horseshoe.

Legend has it a blacksmith (who later became St. Dunstan) was approached by a man who asked that horseshoes be attached to his own cloven feet. Dunstan recognized the customer as Satan and explained that he must shackle him to the wall to perform the service. While hammering, Dunstan deliberately made the job so excruciatingly painful that the bound devil begged for mercy. He refused release until the Devil promised to never enter a house where a horseshoe was displayed from the door.

Hence the reason today’s door “knockers” look like horseshoes.

The application for and granting of a trademark is a process. One in which several steps must be taken. Not paying proper attention to any one of these steps can easily cause your trademark to be rejected. And not a horseshoe, rabbits foot, four-leaf clover or any other good luck symbol will help you otherwise.

For this reason we always use our “Trademark Checklist” before filing. This ensures we don’t leave anything to luck and gives you the best chances of getting one.

Let’s take a closer look at these 7 steps.

1. Before filing for a trademark you should perform a search to see if it is available.
2. There are multiple trademark categories (45 to be exact). If the search results show your word or phrase is already "taken", you still may be able to use it if your product or service falls into a different category
3. Be careful of spelling when searching for a mark. Your mark cannot be "confusingly similar" to other marks (example: you cannot trademark Nyki because it sounds too much like the shoe brand Nike)
4. If your mark is available, you still may not be able to get a trademark if it is too descriptive of the product or service
5. When filing the trademark it is better to leave the category blank and let the trademark examiner decide what category your product or service falls into (there are other tricks to filing that make it more likely your mark will get approved)
6. If your trademark is not filed properly you will receive an "office action" from the trademark examiner. This is a document that basically says "We do not approved your trademark for reasons x,y, and z". It is then your responsibility to respond to this action with your argument on why you should get the trademark. Hiring a lawyer to respond to an office action is generally more expensive than hiring a lawyer to fill out the trademark application in the first place.
7. You can file in multiple categories. Some places charge you multiple times for this. We don't.

If you need help trademarking your name, then we've prepared a short package to guide you through the process. It's absolutely free for people who need to get their name protected. You can get a copy one of three ways:

1. Request your copy online at http://ideaattorneys.com/free-patent-information/free_trademark_information_request.html
2. Call us at 1-866-New-Ideas (1-866-433-2288)
3. Or if you're in the South Florida area, stop by our Coral Springs office at 11575 Heron Bay Boulevard suite 309

If you are an inventor with tattoos, you must read this...

I just tripped upon this interesting little story about the patent behind the electric tattoo machine.

Seems this tool was based on an engraving machine invented by Thomas Edison. It just goes to show how you can take an invention that is already out there...add a little twist of your own...and come up with an entirely new patent.

Click the link for the full story:

http://reason.com/blog/2011/12/08/got-a-tattoo-say-thanks-to-the-electric

The November 28^th, 2011 edition of Newsweek magazine featured an interesting article on a rather unexpected inventor – the “most beautiful woman in the world” actress Hedy Lamarr.

The story of how she became a patent holder is an interesting one…

It start in 1931 with a Czech art film called Ecstasy. In it is a nude scene that caught the eye of ammunition manufacturer Fritz Mandl. They marry, and the young bride is soon attending dinner parties with generals and scientists who regale her with their stories of advances in missile technology.

Fast forward ten years and she’s in Hollywood hearing stories of German torpedoes downing boats in the North Atlantic during the blitz. Recalling the details of the discussions with her ex-husbands colleagues, she turns inventor to help the war effort.

The Newsweek article mentions a few of her inventions: the radio-controlled submarine missile-guidance system, the anti-aircraft shell with a proximity fuse and the fizzing cube (turns water into soda).

But the one I found most interesting is the Secret Communications System.

It's no secret lawyers aren't cheap. But just how much is it to retain an attorney to draft your patent application?

Let's take a closer look...

--- Question from a Reader ----

Matt asks, "I was wondering, what is it that you do to confirm that a certain idea is not already taken? Also What are some of the fee's in hiring a Patent Attorney and how much?"

Dear Matt,

To answer your second question first - you're looking at about $3,000 to $15,000 for us to draft the patent.

If that seems like a lot, consider these two points.

First, the average hourly rate for any lawyer is $150 an hour for a recent grad and up to $500 an hour for an experienced attorney. So imagine for a second you had an attorney defend you in a court case. He'd spend a few days preparing for the case. He'd have his time in court. And of course there would be the follow up to the court case.

Let's say that's just three 8 hour days at $150 an hour. That's $1,200 a day. Or $3,600 for just three days of work.

Second, most patent applications run dozens of pages. This takes time (roughly 6-8 weeks for a full application). Why so long? Because a patent is a legal document. If it is not carefully prepared, it will not hold up in a court of law.

For example, a few years back there was a patent that was ruled invalid because of one letter in a single application. Because of this little mistake, the company lost out on potential millions of dollars in sales (you can read more about this case in my post - 3 Common Patent Application Mistakes).

Now, for your first question.

For us to find out if you idea is taken we must research it. The way we do this is fairly simple. We search existing patents that are relative to your idea using special software. Depending on the type of invention, what category it is in, and how complex it is affects how long this takes (sometimes it's like trying to find a needle in a haystack).

But it's not just a matter of time. Remember how I said patents are legal documents? Well that means they are filled with legal terminology.

For example. Normal people might call the end of a broom the, well, end of a broom. Patent Attorneys might call it the distal end (because it's the end farthest away from the body).

Why use "legalese"? Because it makes your patent stronger in a variety of ways (that's a discussion for another day).

If you have a question about patents or the patent process, send it to newideas@ideaattorneys.com. Or you can request your Inventors Patent Kit by mail and email, just click on the link ----> Free Inventors Tookit Page.

In 2010 Google’s innovative Android mobile phone technology was the target of no fewer than 12 infringement suits from rivals Apple, Oracle, Microsoft and others.

Part of the problem is the culture clash between old style devotees to intellectual property rights and adherents to the newer, more collaborative environment of open source. But the bottom line is always money: Billions of dollars are at play in what can only be described as the brokerage of intellectual capital.

The focal point in the patent war is the data center, the methods by which companies collect, analyze and store the vast amounts of information they accumulate over millions of transactions.

Recognizing that information is the new currency, Google recently purchased more than 1,000 database patents from IBM for an undisclosed amount of money. In keeping with the company’s avowed commitment to open source, Google made some of that know-how public and Facebook promptly suborned it for use in their own data management technology.

The rules of engagement in the corporate food chain would dictate that Google must now come after Facebook for infringing on its patents.

Will that happen? Stay tuned.

Invention can put a company at the front of the line for the big bucks. Facebook, which launched in 2004 but became overwhelmingly popular in 2006, currently has a market valuation of $50 billion according to Goldman Sachs.

But Facebook like its fellow social media companies Twitter and LinkedIn, is vulnerable on the invention front: With only 12 patents in its portfolio, as compared to thousands in Microsoft’s portfolio, unless Facebook wants to reinvent the wheel every time it tweaks a change, any software innovation the company wants to make to its platform is likely to be challenged in court.

Fortunes Can Be Made From Software Patents

Huge fortunes are at play in the software game. Silicon Valley-based Electronic Arts (EA), the biggest developer and distributor of digital games in the United States and the Western world with 16 percent of the total market share, recently purchased Seattle-based PopCap Games for a whopping $750 million in cash and stock. Not a bad return for the three founders who as recently as a decade ago were working out of their own homes. 

The three had founded the company initially to promote an online strip poker game they called Foxy Poker. Fortunately for Bejeweled fanatics, Foxy Poker was too risqué for the home gaming market and not quite sleazy enough for the porn market. A short time later they created the amazingly addictive game Diamond Mind which Microsoft, which licensed the game for a time, renamed Bejeweled.

Interestingly, PopCap co-founder and Chief Creative Officer Jason Kapalka admits that at least some of Bejeweled’s core mechanics were lifted from the Russian game Tetris Attacks. No lawsuits are pending on that account, however.

Fortunes Can Be Lost In the Software Game

Fortunes can also be lost in the software game. Or potential fortunes. One of the primary ways is through patent infringement lawsuits.

Sweden-based Spotify is an online music streaming service that uses a modified peer-to-peer technology to allow users to listen to literally millions of songs as well as to share these songs with friends. Its market valuation has been put at roughly one billion dollars. Since 2008, it’s attracted well over ten million avid European users, and when it recently announced plans to become available to American users, signed up 70,000 in the first week. Speculation about a possible Spotify/Facebook business development is a hotly debated topic in various financial circles.

But at the end of July 2011, Spotify was sued for intellectual property infringement by a software company called PacketVideo, the originators of a streaming music technology that was the Next Big Thing a decade ago.

Does the suit have merit?

Experts say the technology – U.S. patent 5,636,276 – is quite broad. Of course the broadness of its intellectual property claims have not mitigated Apple’s position in its war against the Android phone, the chief rival to its own proprietary iPhone.

If courts find for PacketVideo in this case, every music streaming company could find itself in their gun sights, and the fabulous riches that eluded the company’s founders a decade ago when they started the business could be theirs at last.

SOURCES

http://thenextweb.com/eu/2011/08/13/how-the-us-patent-mess-affects-european-tech-and-startups/

http://www.npr.org/blogs/money/2011/07/26/138576167/when-patents-attack

http://www.gameinformer.com/b/news/archive/2011/03/03/the-sordid-history-of-popcap-games.aspx

http://www.ibtimes.com/articles/189228/20110729/spotify-lawsuit-patent-infringement-packetvideo.htm

If you are in business, and are successful and profitable, your business name should be registered.

Why?

It prevents others from using it to do the same type of business, represent their businesses as yours, steal your customers and ruin your business reputation. Without it, you have a big liability, almost as if you are leaving the door to the shop open when you leave at the end of the day.

Registration also offers you other rights. The United States Patent and Trademark Office website lists seven specific ways trademarks protect your business.

1. Public Notice of Your Claim of Ownership of the Mark

When you apply for a ownership of your business name and are approved, it is published in the Official Gazette. This weekly online publication gives the public 30 days to examine and oppose your registration. If there is no opposition, the patent office generally issues registration certificates about 12 weeks after publication. 

2. A Legal Presumption of Your Ownership of the Mark

Registering with the USPTO creates a legal presumption of your ownership of the mark. Plus it gives you the exclusive right to use the mark nationwide (and in connection with the goods or services listed in the registration). It is part of your business identity. And if others use your business name, they are in violation of federal law. It also allows you to use the encircled symbol ®, which may only be used after registration. 

3. The Ability to Bring an Action Concerning the Mark in Federal Court

With registration you may bring legal action in federal court against anyone using your business name. 

4. The Use of the U.S. Registration as a Basis to Obtain Registration in Foreign Countries

Registered business name or symbol holders may register their marks in foreign countries to give further protections against infringement and piracy. 

5. The Ability to Record the U.S. Registration with the U.S. Customs and Border Protection Service to Prevent Importation of Infringing Foreign Goods

Registered marks can be recorded with the U.S. Customs and Border Protection Service for further protection from infringement. This lists your registration in customs’ computers to check imported goods.

6. Listing in the USPTO's Online Databases

Registering puts your business mark into the USPTO's online databases. When others consider your business name and search to see if someone holds it, your registration comes up letting them know you own it.

7. Registering is the Only Way to Protect the Name of Your Products or Services

The process of registering your business name or business identity with the USPTO is the only way to really protect the name of your products or services. It saves you money by affording legal protections in the event of infringement or fraud. The USPTO process is designed to protect businesses in commerce and prevent confusion and fraud in the marketplace.

While there is no legal requirement to federally register with the USPTO, doing so makes it easier to prove your ownership and stop anyone from stealing your business identity.

Patents may grant you exclusive rights to prevent others from manufacturing, selling, and importing your idea…but that doesn’t necessarily mean the money will just fall into your lap.

To actually profit from your patent you must do one of three things…

1.       You must create and sell some aspect of the product

2.       You must sell the actual patent itself

3.       You must license the patent to someone else

What option should you decide on? That's what we are going to talk about today.

Why license your patent?

The obvious reason is to avoid the hassles of running a business (things like manufacturing, stocking inventory, and actually selling product).

The not so obvious reason is that you may not know how valuable your patent actually is until you start selling product. And the last thing you want to do is sell your patent for a fraction of its actual worth.

By licensing, you can retain ownership of the idea and allow others to sell your idea for a small fee.

The downside is that you give up some of the profits. But as you’re about to see, you don’t need 100% of the profits if you’re idea benefits a big market.

How to License Your Patent

There are a few options when it comes to licensing your patent. One gives you a big chunk of cash up front…one gives you little nibbles of each unit sold…and one gives you the best of both worlds.

Let’s take a closer look…

License Option #1: Flat Fee

Your first option is to exchange rights for cash. In this case you would negotiate for a lump sum in exchange for signing over rights to another party, generally for a limited time frame. These rights can be exclusive or non-exclusive.

For example, let’s say you research diaper usage and stumble across an article in Time magazine that says an estimated 27.4 billion disposable diapers are used each year in the US. And then you invent a diaper that costs 2 pennies less to manufacture.

All those pennies add up!

That would be an annual average savings of 54.8 billion pennies…or…$548 million dollars.

Could you see how your patent would be worth 5, 10, maybe 100 million dollar per year in licensing fees?

License Option #2: Royalties

On the other hand, wouldn’t it be nice to get a little piece of the action for every one of those diapers sold? And that’s where royalties come in. Royalties basically allow you to collect a little bit off of each sale of an item.

Going back to our diaper example. Let’s say you negotiated for 1/10^th of one penny of every one of the 27.4 billion diapers sold per year. That would be worth $27.4 million every single year to you.

There is a downside to royalties though. If you sign a royalties only agreement, you run the risk of the other party “sitting” on the license…not selling anything…and not owing you a penny.

That’s why your best bet to profit from your patent is…

License Option #3: Flat Fee Plus Royalties

In this scenario you take a little bit up front and a little bit of each sale.

For our diapers example, this would mean you’d ask for a few million dollars up front. And maybe 1/20^th of a penny for each one sold rather than 1/10 of a penny (still netting you $13.9 million per year, not too bad).

Patents give you 20 years of exclusive ownership of your idea.

That means no one else can sell your idea...no one else can manufacture your idea...no one else can import your idea.  In short, nobody can profit from your idea without obtaining your permission (which you can charge for, by the way!).  And if they do, you can sue the pants off of them (sometimes getting as much as 3 times the damages as well as reimbursement of your attorney fees from them).

But that's only if the patent application is properly prepared.

Said another way, if you make a mistake on your application – even a tiny one – you can flush those twenty years of protection down the drain.

How small of a mistake can put your idea at risk?

Very small. 99.99% of your patent application can be squeaky clean: no errors, no omissions, nothing wrong. However, just that .01%...sometimes just ONE letter...and you are out of luck.

And that's exactly what happened that cost one company potentially millions of dollars.

The One Letter Patent Snafu

A few years back, Central Admixture Pharmacy Services (CAFC) sued Advanced Cardiac Solutions for patent infringement relating to a chemical solution used during heart surgery. 

A certificate of correction was sought on the patent and was issued by the patent office to replace all instances of the word "osmolarity" with the word "osmolality".

You might be thinking what's the big deal? So they changed the "R" in osmolaRity with a "L" so that it reads osmolaLity. The problem was changing the two words broadened the claims of the patent.

Enough so that even though the district court found the certificate of correction proper, the CAFC disagreed, resulting in massive litigation.

Seeing as average legal costs for patent litigation can easily run $10,000 or more a month, it pays to make sure a patent is written correctly the first time.

With that in mind, let's explore a few common patent application mistakes.

3 Huge Patent Application Mistakes

Patent Application Mistake #1: Not filling out the patent application in its entirety

Believe it or not, patent examiners reject applications simply because they do not contain all the necessary ingredients. If you fail to include required elements, such as talking about the background of the invention and prior art references, scope of invention and fail to include claims...your patent application may be dismissed immediately.

Patent Application Mistake #2: Being too specific in the claims

Patents are title to property. And explaining too many aspects of your invention in excruciating detail can actually shrink your intellectual property...and...reduce the profitability in the long run.

For example, imagine you have a new invention that uses a metal spring.

While you are describing your invention in the claims of the patent, you explicitly state it uses a metal spring. Now, what's stopping another inventor from copying your invention piece for piece, but instead of using a metal spring they use a plastic spring, rubber spring or even an elastic band?

Do you see how this seemingly small specific wording could invite other people to copy your idea and make small changes that would all them to get around your patent?

Patent Application Mistake #3: Being too vague

Now this may sound contradictory to mistake #2, but too many patent applications do not go into detail about how their idea works. Do not assume your idea is understood. Failing to describe the idea in detail could leave "gaps" in the patent making it invalid for not enabling the invention.  If your patent is invalidated, anyone can come in and sell similar products.

Make no mistake, applying for a patent is tricky.

Worst of all, you may not know you even made a mistake on your patent until YEARS after submitting the application...when an examiner at the patent office finally gets around to reviewing your patent application.  Sometimes the mistake is not even caught until you go to enforce your patent and find out it is worthless.

What good is finding out your brakes don't work when you are need to stop.

A qualified patent attorney can make sure this never happens to you. If you would like free information on the ins and outs of the patent application process (including how to get a patent and the fees involved) go to our free patent information request page. Include your information and we will rush you an informational packet immediately.

I had the pleasure of meeting Patent Office Commissioner Robert Stolll this week in Fort Lauderdale, Florida.  Commissioner Stoll is the person in charge of the Patent & Trademark Office.  The buck definitely stops with him.  He came down for a Symposium on Intellectual Property at the Riverside Hotel on Las Olas Boulevard and gave a fascinating talk on proposed changes and improvements at the Patent Office.