Intellectual Property

You have a great idea. You want to bring it to market. How do you protect your intellectual property from imitation, copying and outright theft? In the US, and other countries, ideas such as trademark, patent and copywrite are used to protect intellectual property.

Patent

"A grant made by a government that confers upon the creator of an invention the sole right to make, use, and sell that invention for a set period of time."

Patents are best known in the pharmaceutical industry. They invent a drug and get exclusive right to that invention for X number of years. Same thing with Intel and their chips. What many don't realize is under patent law is something called Trade Dress that protects others from copying the visual appearance or use of your product. This is one thing I am exploring right now.

Trademark

"A distinctive characteristic by which a person or thing comes to be known"

Trademarks include Logos, product names and sayings that are used to identify your product or company. Best known trademarks would include Coca Cola, Disney, Intel and Nike. Anyone can apply for a trademark, but understanding the strength of that trademark is difficult. Trademarks can be looked at in four different ways:

Descriptive

Describes the goods or service offered, such as Computerland for computers, or Park and Fly for airport parking. These tend to be the most difficult to trademark.

Suggestive

Indirectly refers to quality or use of a product. Examples might be, 7-11, for stores open from 7 AM to 11 PM, or mustang for a fast car.

Arbitrary

Similar to fanciful, arbitrary trademarks include names that have nothing to with the product. Arbitraty might be Apple, for computers and MP3 players, or Sun for servers. These along with Fanciful tend to be the strongest.

Fanciful

Fanciful trademarks are the easiest to register, and describe a term that has been coined and
had no meaning before the trademark. Examples would include Verizon, Starbucks or Yahoo!.


Primary versus Secondary

Your trademark might not be distictive enough for a primary trademark registration. That doesn't mean you can try and get a listing on a secondary trademark registration. While not as strong as primary, over time, that secondary trademark can move up into the primary zone.

The best example of a secondary trademark is the shape of coke bottles. Coke bottles have a distictive shape and if you look at Pepsi or Dr, Pepper, their bottle shapes are quite distinct. This is where a competent trademark attorney can help you.

Copyright

Copyright gives the author exclusive right to their published work for a set period of time. As of right now, life plus 50 years I believe. Copyright law states unless you specifically exclude it, all your work is copyrighted. But to enforce it, it has to be registered with the copyright office.

Most people think of music and movies being protected by copyright, but in reality, the content of this blog, or the content of your web page.

Disclaimer

I am not a lawyer and if you have any questions about protecting your intellectual property, you really should consult a competant IP attorney. A lot of companies are out there to help you file applications and do IP searches. You are better off doing your filings early, versus having to deal with the legal fees associated with infringing on someones intellectual property, even if accidental.

Legal Counsel

As my business moves along, and I try and bootstrap it from the ground up, trying to minimize or eliminate fees is key, as it will be for your small business. But at the same time, I am trying to avoid being pennywise and pound foolish. From the get go I have questioned whether I can get any patent protection for my product. At the very least, I was going to trademark it.

Unfortunately, these are dollars that should be spent to at least get adequate counsel. I am glad I did. I met last week with a law firm on an initial consultation. The information I received was invaluable before I paid a dime in legal fees.

First, how did I find this law firm? Truth be told I looked up a few of the local legal firms, that are known for their corporate law practices, and sent introductory email messages to them, explaining who I was, why I was emailing and what I needed. In particular I wanted to talk with an associate that specialized in IP, as well as general corporate law questions, and if possible sales and use tax attorneys.

First law firm came back to me and said, sure we can meet with you, we charge an initial consultation fee of $150. I was prepared to pay it if I needed to until I reached out to the second law firm. They set up an appointment with one of the senior partners, where he listened to what I was doing, and what I was trying to accomplish. He then put me in touch with a younger associate that specialized in trademark.

I talked with the trademark attorney, and set up an appointment to meet with him. Before we even met he gave me some things to look up on a google search so I could understand what I was looking for. All of this at no charge. We met and talked about where I could run into problems, and what else I was looking for. All of this before I got charged a dime. We agreed to let him do some work, maximum two hours at $175 an hour. In addition, he was going to put me in touch with a colleague at another firm to talk patent.

These are the type of lawyers you want. Those that are interested in learning about your business. They make it up in more legal work in the future. Right now I am quite happy I met with them, and will continue to use them in the future. Because they are in a less urban area, their per hour fees are quite a bit less then what I would be charged in Silicon Valley. I figured I just got $10k in education on trademark for nothing.

My advice, do not pay an initial consultation fee. If this law firm wants to build a business with you, they will take a little time to meet with you and understand your business. At the same time, don't waste their time. Come prepared with your prototype, copies of your logos and names, so that the meeting goes smooth and fast. Remember, in the future, $175 per hour billed in 10 minute increments starts to add up over time.

5 Minute Business Lesson

Bob Parson, the founder of GoDaddy.com gives you a five minute business lesson.

Hurry up and wait

So as you noticed I haven't written in a while. I had the contract manufacturer look at the drawings and prototype, answered their questions and they have sent off to the factory in China for initial pricing. I am still waiting! Ughh! How frusterating.

One thing to remember is when you find a qualified factory to do your work, you will also be the smallest customer they have. I know they have not received one dime of revenue from me yet, but have also indicated how serious I am at the moment.

My advice, is don't get steamed up. I have to calm myself down as I am trying to maintain a schedule. Take the time to work on other things. Meet with your attorneys and understand your obligation for sales and use tax, for filing your trademarks or tweaking your corporate structure.

I am trying to meet with a trademark attorney next week, a sales and use tax attorney and a couple CPA's to do my sales and use tax filings. I will let you know my experience with that and my cost when it is said and done.

I am trying to have a working prototype by the time I leave for a wedding in Napa a the end of October. It is important to have prototypes as I will have a working session to get everyones take on the product and changes.

GoDaddy.com - Rules for Success

A new video by Bob Parsons, the founder of GoDaddy.com on the rules for success in entrepeneurship and business.

Contract Manufacturer - Update

As you reach out to contract manufacturer's, there will be up days and there will be down days. Frankly, my conversations with the first two contract manufacturers, left me disheartened about this project.

The first company I talked to said, go find a designer to make a prototype then we will see if we can make it for you. And oh ya, budget $5,000 for tools, dies and forms. Hmm, if I am gonna go out and have my own prototype built, then I will bid the business to the lowest bidder. At best this was a, if you run through all these obsticles, maybe we can do business with you.

The second company, I had more hope for. This is a product they are supposed to specialize in. Their website was beautiful. I provided drawings, and they came back 3 days later and said, sorry, we are not going to bid this project. To complicated. At this point you start to second guess your idea. Stop! This is normal, but will admit, I was at a low point.

Finally, I found a local company, in all places a state manufacturing directory. It is close to where I live too. Sent an informational request, and set up a time to go in and see the sales manager. Already I got good vibes.

The sent me a copy of their Non Disclosure Agreement that was surpringly in my favor. I made some slight changes, and prepared for my meeting. I created cardboard prototypes and sent an agenda for the meeting.

I sit in the meeting, we each sign the NDA, and frankly, it was a breath of fresh air. The salesperson knew what I wanted, we talked about minor changes, material selection, and marketing strategy. We discussed the pro's and con's of various materials, and even better, I got him excited about the product as well.

It doesn't stop there. As we discussed more, he mentioned since it will be a virtual business (no storefront), they can warehouse the product for me at a nominal charge, and even handle mail fullfillment. This is great as I had planned to fullfill myself until I had enough volume to talk to a fullfillment company.

Even better, he offered to put me in front of third party retailers that order through them already, with the hope of getting a spike in sales volume early. They mentioned bringing the product to trade fairs they participate in. They do this to show their manufacturing abilities, but it is also free marketing.

At this point I am completely stoked. I couldn't ask more from a partner. Right now, he is having their designer take a look at my crude prototype and drawings, to figure out pricing. Once that is determined, it should cost me a few hundred dollars to make a few production prototypes and then it is off to the factory for production.

Meeting in person allowed him to see my passion and seriousness. It allowed us to talk about the design philosophy, target customer, and for him to see I did my homework. Go into the meeting, with a crude mock-up. The salesman told me, people seldom come to meetings with them, and it is very helpful at determining intent. It also shows you are serious.

While production costs are important, find a good partner, and try not to nickel and dime them. Be honest and upfront as they may be able to help you more then you think. As for payment, he mentioned a deposit up front. I agreed we had not progressed enough to look at trade terms, my only request is to pay by credit cards to get my points.

As it is, I should hear in a week about initial production cost estimates. We can then tweak design or materials to lower costs. Once we have agreed, they will build a shell prototype, and send material samples. I will then decide on material, and have a production sample created. I expect this to take a month so will update you as things change.

Charge ahead and conquer!

Rules for success - GoDaddy.com

Those of you who follow the technology scene, or have your own websites and blogs, know about godaddy.com. For those of you who don't godaddy.com is a site/company where you can purchase domain names. If you want to purchase yourcompany.com you can go to godaddy, search for availability and purchase it. Godaddy.com is actually Bob Parson's third company he has started. Watch his video where he lays out the keys to success.