Small Business

Safeguarding Your Brainchild


By Karen E. Klein Q: I am developing a new product that I cannot disclose in this cutthroat industry. How early should I start thinking about intellectual-property protection? How can I choose a reputable IP attorney, and how can I possibly afford one when I barely have enough money to launch my product? Will IP attorneys agree to some type of payment plan or better? -- B.M., Morris Plains, N.J.

A: Legal experts say it is never too early to think about protecting your innovations and inventions. Keeping an inventor's journal of your efforts, designs, correspondence, sketches, and prototypes will help when it's time to file for intellectual-property protection, which is something you should do before:

1. offering your invention for sale

2. selling any rights in your invention

3. disclosing your invention publicly, or

4. using your invention in public.

Those precautions are recommended by Pasadena (Calif.)-based attorney David Farah, who specializes in IP protection at the Sheldon & Mak law firm. Remember, if you are seeking financing, make sure you have filed for protection before pitching your product to investors because a court may view that as "an offering for sale."

The least expensive way to obtain U.S. patent protection is to file a disclosure of your invention with the U.S. Patent & Trademark Office (www.uspto.gov). You can file a provisional patent application to start, after which you have a year to file a regular patent application. "The cost for filing a provisional patent application through an attorney is usually between about $1,500 and $2,000," Farah says, "depending on the work the attorney has to do to advise you in the matter, format the disclosure, and prepare the accompanying paperwork."

GET A SPECIALIST. Make sure the attorney you choose specializes in IP protection and is knowledgeable about the industry you're entering. Using a lawyer familiar with your industry brings several advantages, says attorney David Hayes, who heads the IP practice at Washington's Fenwick & West.

First, the lawyer will be familiar with other products in your market category and may be able to save you a good deal of research time, Hayes says. He or she also will be able to ensure your patent application is novel, and that the technological innovations you claim have not already been patented. The attorney also can offer strategic advice and introduce you to investors, partners, and other valuable sources.

You can ask friends and colleagues for referrals to local law firms, check your chamber of commerce for references, and search online for law firms in your region with IP practices, Hayes says. Once you've pulled a list together, call and ask whether any of the attorneys know your industry.

GETTING CREATIVE. While most attorneys decline to do patent work on contingency or in return for a share of future profits, search hard enough and you might find one who will agree to a creative arrangement -- particularly if your brainchild shows a lot of promise. "Depending on the situation, some attorneys will take delayed payments or offer free services up to a certain dollar amount for a startup client that they believe is a good risk," Hayes says. "Others will take stock in the company in lieu of fees, but only if they feel there is definite potential for the company to get VC funding and eventually become a full-service client."

Don't think of IP protection as a cost: Think of it as an investment, experts say. You will never survive in a competitive industry without it, and when your company is evaluated by investors, your patents and other legal protections will be counted as an asset. Have a question about running your business? Ask our small-business experts. Send us an e-mail at smartanswers@businessweek.com, or write to Smart Answers, BW Online, 46th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.


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