Patent Strategies To Help You Get Paid For Your Ideas

If you want to make money from your ideas, you have to be pragmatic. First, you need to realize that the odds are against you — and thus, you will need to fight to be paid for your creativity. Is this fair? No, this is business. Fairness has nothing to do with it. If you’re looking for absolutes and for things to be fair, you’re looking in the wrong place.

The question for entrepreneurs is, how can I avoid being taken advantage of as I work within the U.S. patent system? The reality today is that if you have a great product, it’s going to be imitated, and stopping the copycats has become extremely difficult. Many people find this discouraging. The traditional understanding is that a patent protects your invention from being stolen by allowing you to “exclude” others from using it. But the reality is more complicated.

“You learn in law school that patents are the right to exclude. Well, in the United States, they’re not — they’re the right to bring a case for damages, typically,” explains patent litigation investment funder Adam Gill in a recent episode of the podcast “Understanding IP Matters.”

Suing for patent infringement is not a dependable business model for inventors and startups. A better strategy for inventors and startups is to use patent applications to establish perceived ownership over their inventions and incentivize companies to work withthem. Specifically, they should focus on creating transaction-ready provisional patent applications (PPAs) to secure a licensing deal, because licensing is the quickest path to market.

How to Write a Better Patent Application

The key to getting paid as an inventor is learning how to play within the patent system’s shades of gray. These gray areas exist because there is uncertainty related to patents. In a nutshell, to get paid for your creativity, you will need to be prepared, know more than your competitors do, outwork them, out-design them, and harness the uncertainty of the gray areas.

Being perceived as an asset and taking away risk is what gives partners the confidence to move forward with you. Licensing a simple idea isn’t difficult. It’s when your idea has great potential and you’re dealing with large companies that you’re going to need to be one step ahead at all times. That starts with drafting a transaction-ready provisional patent application.

A PPA becomes a selling tool when approached from a business perspective. This is not something you can have your patent attorney or patent agent do for you. That’s not their job — it’s your job.

The following is not legal advice. It is business advice from an inventor who sold his patent portfolio for millions of dollars in the packaging industry.

1. Explain the problem your invention solves and how your invention is a solution in a way that people can understand.

Put yourself in the shoes of the reader. Humans process information as stories. So, be a good storyteller in your patent application. Explain the solution — your invention — so simply that anyone who reads it can understand it. Potential licensees and investors will appreciate this, as well as juries and judges. Even patent examiners have told me that when they truly understand the problem, they’re more likely to identify with it.

U.S. experts on patent law emphasized this point repeatedly during their opening panel at the 2022 World Intellectual Property Forum in Bangkok, Thailand. Gerald Rosen, a retired federal judge who presided over numerous patent cases, highlighted the need to craft a simple, clear narrative.

“Most judges are generalists,” he explained.

Patrick Coyne, president of the American Intellectual Property Law Association, advised against writing a document that is incomprehensible to the general layperson. Robert Stoll, the former U.S. Patent and Trademark Office commissioner, recommended telling a story using a problem-solution framework.

This is so simple to do, yet most patents don’t.

2. Include how to manufacture your invention using the most efficient tools and materials.

This information — instructions, basically — is what’s missing from most patent applications. How do you actually make it? This information is critically important, in my opinion.

So, learn as much as you can about manufacturing your invention. Consider hiring someone with relevant engineering experience to ensure you file the right methods and materials. Look for ex-employees of companies that specialize in these manufacturing techniques. Never rely on anyone you are going to negotiate with — such as a licensee — to provide this type of information.

Being knowledgeable about production makes potential partners confident that you know what you’re talking about. It removes part of the guesswork.

This is not a one-and-done situation, because innovation never stops. You will likely need to continue filing patent applications on new manufacturing techniques to prevent your licensee from claiming ownership over future embodiments. You want to “own” not only your invention, but the best ways of manufacturing it, too.

This is a common strategy for patent owners of all sizes. In a recent entry on his blog PatentDocs, patent lawyer and molecular biologist Kevin Noonan explains that pharmaceutical companies patent their manufacturing processes to maintain exclusivity over their inventions.

“… due to the complexity of producing these drugs commercially, they all have protection on those methods (without which the drugs could not be produced and regarding which each sponsor company invested money, time, and effort to develop)…. these patents protecting how the drugs are made are no less worthy than the drug patent itself.”

3. Try stealing your invention from yourself.

How would someone reverse-engineer your invention? In other words, how would someone design around the claims in your application to produce the same results? Your goal is to get paid for the innovation, not just your invention. Including workarounds in your patent application stops others from thinking they can try to get around you. The message sent is that they need you.

Combining manufacturing methods, materials, workarounds, and variations makes it extremely difficult for one person to determine whether the claims in your application will ever be issued. This is the gray area.

When intellectual property attorneys examine these types of details, they don’t know for sure what’s going to issue. When manufacturing people study all of the variations you have included, it’s difficult for them to make a determination about which method is going to be the best. They don’t know enough about intellectual property to be sure either.

You’ve created a gray area because it isn’t clear what you own and what will eventually be issued.

This strategy helped me build a wall of intellectual property and was critical in defending my ownership of my rotating label technology during litigation.

4. Include lots of drawings.

When you include drawings of all of the different variations and workarounds you have discovered, it becomes really overwhelming for others to make a clear determination about whether and which of the claims in your application will issue. It’s easier to just to work with you, they conclude.

Using Provisional Patent Applications to License Ideas

Because you’ve provided all of the information a potential partner needs to actually have a fighting chance of manifesting your idea, your patent application is transaction-ready. You’ve protected not only the invention, but the innovation. You’ve created a gray area. This is how students of what we teach at inventRight are licensing their product ideas with only a PPA.

Fundamentally, your PPA becomes a selling tool when it overcomes arguments. The biggest argument is, why should we pay you? This is what every potential licensee is thinking. By doing such a thorough job, and creating uncertainty about which claims are going to issue, it becomes easier just to pay you.

Another argument you will have to overcome is with your patent examiner. If you have a competent patent attorney or patent agent help you draft your application with these types of details, you can get a claim or two issued. Typically, that’s all you need to get paid.

If you decide to convert your provisional patent application into a non-provisional filing, and the claims that issue include variations and workarounds, there’s a very good chance companies will think twice about working around you.

Now, for the icing on the cake!

Business opportunity is created when you combine a transaction-ready PPA with market demand. You can generate market demand by showing your invention to customers of the potential licensee. This could be a retailer, or really any company that might order large volumes.

Here’s the real kicker. When you bring market demand to the table, licensees are less likely to care about intellectual property. Think about it. What’s more attractive than new business?