Ask Patent Insider® Anything (AMA) – Frequently Asked Questions (FAQs): Part One

Ask Patent Insider® Anything (AMA) – Frequently Asked Questions (FAQs): Part One August 18, 2021Leave a comment
Frequently Asked Questions

 

At Patent Insider®, we are committed to providing quality IP solutions to our clients. Your business ideas are your currency.  We believe in empowering your business through idea ownership.

Patent Insider® delivers intellectual property (IP) solutions to business owners. Clients choose us because of the available IP services, our unique expertise, and our high standards of quality.  We have educated hundreds of innovators, creatives, and small business owners on the importance of using intellectual property tools to secure ideas and create value in the marketplace.  During our fifteen plus years in this industry, we get tons of questions.  We’ll do our best to answer the most frequent ones in this post!

At Patent Insider®, we put the needs and best interests of our clients before billable hours minimums.  Putting it all together, since we started, we’ve helped our clients with over 153 patent and IP matters and counting.

We’ve seen a lot of business scenarios and received tons of questions about startups, patents, and innovations:

  • Is a patent right for our startup?
  • Does getting a patent make us profitable?
  • Is it worth the investment?
  • How do I license my idea/product out to a manufacturer?
  • How do we get VC capital?
  • What about crowdfunding?
  • Do we need a patent before raising money?
  • What about blockchain and crypto?
  • Is adding blockchain to something people already do enough to get me a patent?
  • Can I really make money of an idea?

We get many of these same questions and questions like this over and over again.

Let’s start answering them.

Question: Is a patent right for our startup?

Answer:  This reminds me of the Harvey Firestone quote I read years ago, “Capital isn’t that important in business. Experience isn’t that important.  You can get both of these things.  What is important is ideas” (Harvey Firestone).  While it may sound cliche, its actually quite true that your idea is what matters.

 

AirBnB® shook up the hotel industry with a disruptive innovative business idea of creating software that would allow homeowners to rent out rooms to consumers.  Netflix® decimated the video rental marketplace putting household names like Blockbuster Video® out of business with a disruptive innovative idea of streaming video online immediately.  Amazon® already jumped way out ahead of its book seller competitors, now it’s literally putting brick and mortar box stores like Sears® out of business by revolutionizing online shopping and fulfillment using an innovative spin on the old Sears® catalog.  Uber® pioneered digital ridesharing severely crippling the Taxi industry.

If these ideas were not patented and protected, the huge profits that have been established for these innovative companies would have been at risk.  If you are starting an innovative startup built on a disruptive technology or innovation, a patent should definitely be part of your startup costs and due diligence.  If your company is not building a technology or invention, but is more of a commercial brand, clothing line, fashion brand, or something built on a trending style, a celebrity, or influencer personality; a trademark is the better solution.  If you’re simply a new business that is outhustling, out marketing, and outselling the competition for something that is not necessarily innovative like selling producs, drop shipping, selling on Amazon, flipping products from Ali Baba to sell on Amazon, selling on Shopify, selling apps on mobile platforms, or selling a course, then more than likely a patent isn’t for you.

Question: Does getting a patent make us profitable?

Answer: It depends.  You probably don’t want this answer, but it really does depend on a number of factors.  What are your assets?  What are your liabilities?  How much cash to you have on hand?  Are you generating any revenue right now?  If yes, how long can you go before you need more cash?  If no, are you raising capital?  How do you plan to raise capital?  What is your plan for your innovation/business for the next 18 to 24 months? For the next 3 to 5 years?  Wherever you are in the process of answering these questions will give you the necessary answers to determine if the patent will you profitable or not.  One essential piece of the puzzle is the marketing analysis.  Are you building something that has a demand? Using a model like the Lean Canvas: 1-page Business Plan is helpful to everything down on paper so you can flesh everything out.  In the end, this is a projection of estimated cost versus estimated revenue generated.  This is a constantly evolving analysis, but this will get you started and help you get clear about where you are now and where you need to go.

 

Question: Is it worth the investment?

Answer: Like we said before, it depends.  As with anything in business and IP, answers vary based on the contextual details, specific information, situations and circumstances.  Many factors have to be considered.  One way to approach this analysis is by starting by imagining a scenario where money is no object.  In this particular scenario, would investing in intellectual property protection be worth it to achieve the overall goal.  If so, you have your initial answer.  Now for the next step, you must conduct a cost/benefit analysis again after plugging some real variables and projections (choose your model, there are several).  Now you can  see what needs to be adjusted for it to work.  Now you have a working model.  Manipulate the variables for various conditions and circumstances in different scenarios.  What’s your break-even analysis?  What’s the minimum threshold of revenue you need to hit to be successful?  Answering these questions will give you a number of datapoints that will inform what metrics you need to meet in order to break-even and generate a profit.

That’s all for now.  We’ll answer more questions next time.

At Patent Insider®, we help companies streamline, manage, and increase profitability of their patent portfolios.  Patent Insider represents companies of all sizes, ranging from funded startups to Fortune 500 companies. We are a skilled team of patent professionals focused on protecting the intellectual property assets and developing the patent portfolios of companies in a variety of industries, including software, consumer products, mechanical devices, medical devices, robotics, electrical signal processing, and electronic and computer technologies and more. Patent Insider® also provides patent prosecution support for intellectual property law firms assisting with their patent matters.  Schedule your consultation at www.patentinsider.co

Disclaimer: All the opinions expressed herein are his alone and do not represent the opinions of any other person, firm, or company. None of the information provided herein should be construed as legal advice. You should always consult with a licensed attorney to discuss any legal concerns you might have. Please know that if you are interested in legal or consulting services no services will be provided or representation undertaken except after a fully executed engagement letter and the payment of the required retainer.

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