20 things to know about software patents

On July 31, 1790, Samuel Hopkins obtained the first patent for a process for making potash, an ingredient used in fertilizers. President George Washington signed the patent.

Since that day, more than 6 million patents have been issued.

I saw some potash/fertilizer the other day that I need to tell you about. I don’t watch much TV, but I do enjoy Shark Tank. To me, it seems like a lot of fun to be on the panel. I have great respect for anyone who is successful enough on their own to be in a position to invest. That’s what every entrepreneur works for… that freedom and those options.

That being said, I saw some advice from “Jaws” investor Barbara Corcoran the other day that made me cringe and wanted to post this as an addendum to her advice. You see, Barbara is not in the software world. She deals in real estate and products. In an interview with inc.com, she had this to say about the biggest mistakes small businesses make:

“Spending money on patents and public relations. The correct dance steps are:

1) Make the product

2) Get some sales

3) Make the big guys envy you, and only then get a patent.”

At the end of the article, I’ve linked to that quote (mainly so you don’t go away)

I cringed when I got to #3 because this advice could really put some tech entrepreneurs in a very bad place. #1 and #2 are smart!

This is what I have learned during the process of patenting multiple pieces of technology:

1) You MUST get a patent attorney. No, you can’t do it yourself. No, his wife’s friend who is a lawyer can’t understand it. Patent attorneys are highly specialized. Save the money and find a patent attorney.

2) Not just any patent attorney will. Most of them are as useless as the day is long when it comes to technology or software patents, but they will take your money anyway. Find a patent attorney who specializes in technology/software. If you need a recommendation, contact me.

3) Patent attorneys are federally licensed. If you are in Florida, you do not have to see a Florida attorney (which is unique).

4) Get ready to write! If you think it’s as easy as taking your idea to a lawyer and having him write everything down, think again. No less than 10 pages of technical documentation, drawings and images were submitted for any of the patents I applied for. If you bring crap to your lawyer, you’ll either produce a mediocre patent or charge a fortune… maybe both.

5) Use the patent attorney artists. The drawings may seem simplistic and cost $100 or so per image, but that’s another thing you shouldn’t try to do yourself unless you like rejection and wasted time.

6) Write your patent as broadly as possible. Your patent can and will be rejected and that’s okay. Go for more than you need…go big! You can scale the patent back and refine your final patentable piece based on feedback from the United States Patent and Trademark Office (USPTO). You can’t add items later if they weren’t there when you started. Do you want to increase your chances of obtaining a patent? Go for A LOT and adjust as you get feedback.

7) You MUST SUBMIT your patent idea BEFORE going to market. This is where Barbara’s advice is very dangerous. In the world of software, you cannot patent something that is being used by the public. Once it’s out, it’s in the “public domain” unless you’ve filed your provisional patent.

8) Patent laws change daily based on court cases. Many people (including Mark Cuban) think that the ability to patent technology is detrimental to the evolution of technology. It is very possible that they will reject you.

9) You can obtain a provisional patent or a non-provisional patent. The definition of a provisional patent is as follows: Under United States patent law, a provisional application is a legal document filed with the United States Patent and Trademark Office (USPTO), which establishes an anticipated filing date, but which does not become an issued request. patent unless the applicant files a non-provisional regular patent application within one year.

In short, a non-provisional is a “real patent”.

10) Obtaining a provisional patent is less expensive than a non-provisional patent. Includes patent search and secures your place in line. You can launch your product when you have your provisional patent date.

11) A non-provisional patent can take up to 5 years to be approved or rejected.

12) Most software patents are rejected because they are not mechanical or do not have a proprietary algorithm.

13) It is absolutely possible to be granted a patent and then lose in court if someone infringes on your patent. Having a patent and being able to enforce that patent are two completely separate things.

14) When you file your patent, you are teaching the world how to do what you “invented”, accept that this too has drawbacks.

15) Applying for a US patent can cost up to $20,000.

16) Once you have issued your US patent, you have 1 year of protection/time to file for any individual country in which you wish to be protected. The “Patent Cooperation Treaty” has 148 countries, which can be viewed here http://www.wipo.int/treaties/en/ShowResults.jsp?treaty_id=6

17) Each country in which you apply for a patent will have its own filing fee. Nothing is free in the world of intellectual property.

18) If you are lucky enough to be granted a patent, that patent is granted for a period of 20 years… keeping in mind that “granted” does not mean “protected”.

19) Big companies (Apple/Google) have departments that do nothing but process patents all year long. As always, the little one is at a clear disadvantage. Barbara is right that being on the radar of larger companies can be a good thing, but not in all cases. Big companies crush small ones all the time like it’s a sport.

20) You can choose to publish or not publish your patent in the worldwide distributed patent magazine. There are pros (exposure) to being published and cons (maybe getting scammed?) to choosing to publish. That is a choice you have to make.

So there you have it… what my experience with software patents has taught me. Barbara wasn’t talking about technology when she was quoted on patents, so be careful who you listen to on this topic…it could cost you a lot if her idea is good enough.

http://www.inc.com/bill-murphy-jr/17-extraordinary-candid-observations-from-shark-tank-s-barbara-corcoran.html?cid=em01017week26a