Patents: Who, What, Where, When and Why?
•Who - Who should apply for a patent? Pros and cons? Anyone launching a new product should file some sort of patent, even if it is just a simple Provisional or Design patent application. This allows you to claim “patent pending” status and hopefully deter potential competitors. At the very least it will prevent direct theft of a new product. If you are developing a product with significant improvements, you should try to obtain a Utility patent, to completely lock in your protection and exclude competitors from this product entirely. Pro: Ideally, these patents, or a combination of them, can be used to completely dominate a product listing, and enable a seller to maintain healthy margins and a top listing. Cons: The only real con is the cost of filing the patent applications; however, this is a relatively minor expense in comparison to the potential benefits of dominating a successful product listing. •What - What are the differences between Utility and Design patents? Pros and cons? Utility patents are used to secure exclusivity to significant structural/functional improvements, and prevent any use of this improvement. Pro: They are very powerful, and last for 20 years. Cons: They are more expensive, and are difficult to get allowed without a significant structural and/or functional improvement. Design patents protect the external ornamental appearance of the product. While much narrower than a Utility patent, they can still be very useful, especially since many knockoff products are extremely similar to the original product. Importantly, knockoffs are often produced by your own factory, if your Chinese factory tries to pick up some extra sales, and these can easily be shut down. Pros: Easy to obtain for even minor changes, last for 15 years, and easy to enforce on Amazon. Cons: May be easier for competitors to get around by making changes to the external appearance of the product. Provisional patent applications are a temporary form of Utility patent protection, which last for one year. This enables a seller to get initial protection at a relatively low cost, and defer further Utility expenses until the product has been tested and proven successful. If the product sells well, you can invest in a full Utility patent application; and if it is not successful, you can simply drop the application and avoid further expenses. Pro: fast and inexpensive. Cons: The provisional is not examined by the patent office, so this slows the grant of the patent by a year. Also, a provisional does not protect design features of the product, and so it ideally filed in conjunction with a Design patent application. •When - When should I apply for a patent? Is there a critical time frame when I can no longer apply for a patent if I have publicly disclosed it? Preferably you should file your patent applications before sending it to a factory for sourcing, and definitely before any sales of the product or public showing of the product; however, you can wait for up to 1 year from first public disclosure or sale and still file (if nobody else has already filed). It is important to note that U.S. patents are granted based on who was first to file a patent application, so it is risky to show the product publicly prior to filing. After 1 year from public showing or sale, the product is no longer patentable, and is public domain. So be very careful with this 1 year “statutory bar” deadline. •Where - Where shall I apply for my patent? Patents are filed in each country in which you would like to have protection (with the exception of Europe, which offers a regional patent that covers all of the European Union). Once you file your first application, typically in the United States, you have a period of international protection based upon international treaty. A Utility patent gets you 1 year of international protection, while a Design patent gets 6 months. Before this period expires, you need to file additional applications in countries in which you want protection. Large consumer countries (the EU, Canada, Australia) are popular. Some also like to protect manufacturing countries, such as China. But foreign filings can be expensive, so be caution in deciding where to file. For many Sellers, the United States is all that is required. For Utility patents (not Designs), there is an International PCT application which can protect your rights internationally for up to 30 months. This is a very popular method of starting your international filing process, especially if you might want to protect the patent rights in multiple countries, or if you are unsure of where you will need protection. •Why - Why should I bother with patents? The goal of a sophisticated e-commerce seller is to establish and maintain healthy profit margins, and a top seller position in e-commerce sites. Yet there is no point in investing time and money in developing a new product, if you allow the competition to simply copy your product once it has become successful, undercut you in pricing, and steal your top listing spot. Even Amazon itself will undercut your pricing if they see that your product is successful. An experienced product developer files patent applications, sometimes many of them, to completely lock up a new product, so that they can exclusively sell it and maintain high profit margins. If you are going to launch a new product, it is essential that you get whatever protection you can, to prevent this competition. Even if you are only making modest changes to existing products, you can obtain a Design patent, a significant tool to exclude competition. And EVEN IF YOU ARE COPYING SOMEONE ELSE, you can file a simple Provisional application, and claim that it is your “patent pending” product, which can give you significant marketing advantages, and often scare the competition. Finally, some Sellers file patent applications DEFENSIVELY, so that none of their competition can get patents on the idea, and sue them. Sometimes it is valuable to just make sure nobody else gets a patent on the product and excludes you!
About Karich & Associates
Eric Karich is a Registered Patent Attorney who has worked with hundreds of start-ups, and witnessed first-hand the effects of trademark and patent protection, which is critical to the success of a developing business.
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