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By
Ronald
J. Riley
It is important that you closely
study all correspondence between the patent office examiner and your attorney.
Attorneys do not always fully understand the patent and it is possible
they will make a mistake in the way they argue your claims.
A misunderstanding of what the patent should cover can lead to the attorney
not arguing for the correct claim language, which can significantly limit
the scope and value of the patent. Remember that you have a partnership
with your attorney and you must be active in the whole process to help
insure the best results. If you do not invest the effort to follow the
process and your patent is not executed in the most favorable manner, you
are as much to blame as the attorney. The inventor will be the one who
suffers as a result of any problems with the way it has been executed.
After filing for your patent(s) you
need to organize your business. This is important to prepare for the inevitable
conflicts you will have over patent
infringement. Large businesses' strengths are their marketing organizations
and their deep pockets. Both give them an advantage over you if they decide
to infringe your ideas. You need to neutralize that advantage. I recommend
that you form one or more corporations to shield your assets from any attack
a well-healed infringer might launch. Being well shielded from attack is
a big deterrent that often will keep your adversary from launching one
in the first place.
I believe it is best to hold patents
in your own name rather then assigning them to your company. You should
form a corporation whose purpose is to market the inventions. Have a contract
that licenses the right to market the patents and any products created
on a non-exclusive basis to your marketing corporation. This contract needs
to specifically state that it is not transferable to new ownership of the
corporation and that it is renewable at six month or one year intervals
at the licenser's sole discretion. The purpose of the contract is to create
a situation where a judgment against your marketing corporation is worthless
because the right to market the invention is not transferable. This approach
reserves the right for you to license the patent to others if your first
corporation comes under attack by an infringer or for any other situation
such as product liability.
The purpose of the corporation is
to shield you and your patents from a company that has deep pockets and
tries to break you with harassing litigation. Your marketing corporation
should have minimal assets. You must operate the corporation precisely
as proscribed by federal and state laws. This means that all the necessary
meetings and paper work must be done in the manner dictated by laws where
your corporation is formed for it to limit your liability.
If you have other substantial assets,
you should consider putting them in their own corporations. In my case,
I have a laboratory in which I develop products and a farm where each is
separately incorporated. Also consider having ownership held jointly if
you are in a secure marriage. Your spouse should not be active in the corporate
operation to prevent your opponent from suing them. In many cases, judgments
may not be executed against jointly held property until it is liquidated.
I would strongly recommend that you
establish a relationship with a good CPA, a general business background
attorney, and one or more patent attorneys early on in your quest to become
a professional inventor. Attorneys come in two basic flavors; one type
excels at filing and the other at dealing with infringers. I strongly recommend
that you locate a litigator that works on a contingency basis and show
him your patents before you start marketing. Having a contingency litigator
available will deter infringers. You should also establish a business activity
that will supply cash flow and sustain you during your effort to license
your patents. Expect to work at licensing at least one to three years before
you sign up your first licensee.
Continue
with >> Marketing
and Licensing Choices - How They Affect Patent Infringement
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