Startup Founder’s Dilemma To Patent Or Not To Patent - Entroids

1. Startup Founder’s DilemmaTo Patent Or Not To Patent Vijay Kambhammettu Co-Founder Entroids LLC

2. What you could learn in here…. • Considerations before filing A patent • I patent my product because … • I would not patent my product because… • Two typical patents types. Which ones for you? • The 3rd type that saves you time & money

3. Considerations before filing a Patent • Prototype; • Build a prototype first to determine your product's functionality. It will ensures you have a close-to-final design when you do file for a patent. Changes in materials or mechanics is difficult once your patent's been filed. It address you to solve the Problem-Solution fit in the product development process. • Market research; • Define your market and determine how large it is. If it's too small, your product may not be commercially viable. Validate the market acceptance by talking to actual beta customers in private. This helps validate your Product – Market fit understanding. • Cost to manufacture; • Estimate how much would it cost to manufacture and sell in your product in the identified market segment. If it costs more to make and sell than the market is willing to pay, your invention is just a money pit. • Patent research; • Make sure your idea isn't infringing on someone else's patent. To do that, you should conduct a "preliminary patent search." This step will help ensure that your idea hasn't already been patented. Visit www.uspto.gov on how to do search yourself.

4. I would patent my product for …. • Manufacturing and commercial rights; • So you are a startup founder who has successfully developed a customer fit product for a very large market size but you know the some XYZ company is going to make a cheaper copy and reduce your sales. This is where you SHOULD patent your product and acquire manufacturing and commercial rights to make the maximum profit. • License the patent or sell it; • So you have done further research and found out that you can launch a better version and make more money and the current patent is of no longer interest to you. This is where you SELL your patent to make money. • Keeping competitors at bay; • The primary reason that founders patent their creation is to prevent competitors from using their idea and technology. Secondly investors feel secure with a patented product as their investment would not go in vain.

5. I would not patent my product for…. • Finances Involved • To Patent Product: A significant legal fee must be paid to retain the rights. Failure to pay results in loss of patent rights meaning anyone can copy your idea. Being a startup founder who has just started product development there are so many things to worry about; most important of which are customer validation and development of a product which actually sells. Extra financial burden of the patent hurts such early stage startups and burns out their capital. • For Defending Patent : Even if you patent the product there still is a possibility that someone somewhere may be working on the similar idea. If such a situation arise then you must be ready to defend your patent to retain rights. • Diverts Focus • Patent is an important step but not the first step. If you are focused on protecting an idea without even considering that how will it look once it goes into the stage ahead of blueprint; will consumers be interested? What if the design isn't as productive as the theory? If you are not asking these questions in the beginning then you are wasting your investment on patent rights. Remember “Development of the product which your customer want is the first and the most important step not preservation of idea” • Public Records • Once you patent your product ‘s every single details of it becomes public. Even your competitors have access to it and they can launch the better version once your patent expiresor find loop holes and beat your to market

6. Two key types of patents for StartupsWhich ones for you? • Utility Patent • Issued for the invention of a new and useful process, machine, manufacture, or composition of matter, or a new and useful improvement thereof, it generally permits its owner to exclude others from making, using, or selling the invention for a period of up to twenty years from the date of patent application filing, subject to the payment of maintenance fees. Approximately 90% of the patent documents issued by the USPTO in recent years have been utility patents, also referred to as "patents for invention". • Benefits: 1. Protects the functional aspects of an invention. 2. Can provide broad patent protection making it difficult for a competing product to avoid patent infringement. 3. Capable of protecting many different variations of a product with a single utility patent. • Pitfalls: 1. More expensive than a design patent. 2. Takes longer to receive patent protection (normally 2-3 years). 3. Does not protect the ornamental features of an invention. • Design Patent • Issued for a new, original, and ornamental design embodied in or applied to an article of manufacture, it permits its owner to exclude others from making, using, or selling the design for a period of fourteen years from the date of patent grant. Design patents are not subject to the payment of maintenance fees. • Benefits : 1. Cheaper than utility patent. 2. Usually faster patent protection at the U.S. Patent Office (normally between 1-2 years). 3. If the main feature of the new product is the appearance (i.e. ornamental design), then a design patent will protect this main feature • Pitfalls: 1. Design patents do not protect the functional features of an invention (most inventions have functional features). 2. Design patents can be relatively easy to design around by simply changing the overall appearance of the competing product. 3. Difficult to protect different variations of product. Source: http://www.uspto.gov/web/offices/ac/ido/oeip/taf/patdesc.htm

7. The 3rd type, that saves Time & Money “Provisional Patent” • What is Provisional Patent (PPA)? • PPA is a patent application that can be used by a patent applicant to secure a filing date while avoiding the costs associated with the filing and prosecution of a non-provisional patent application. More specifically, if a non-provisional application is filed within one year from the filing date of a PPA, the non-provisional application may claim the benefit of the filing date of the PPA. • Because a PPA is not examined, an applicant can also avoid the costs typically associated with non-provisional patent prosecution (certain attorney's fees, for example) for a year while determining whether his/her invention is commercially viable. Further, because a PPA is not made public unless its application number is noted in a later-published application or patent, the failure by an applicant to file a non-provisional application based on his/her PPA will not lead to public disclosure of his/her invention • The Benefits • A PPA essentially provides a one-year extension as to the filing of a U.S. non-provisional patent application. • Because a PPA is not examined, an applicant can also avoid the costs associated with prosecuting a non-provisional application during this one-year period. • The Pitfalls • There are no extensions on the one-year time limit for filing a non-provisional application claiming benefit of a PPA filing date • If the PPA does not adequately describe all that is claimed in the later-filed non-provisional application, then the material added in the non-provisional application may not rely on the PPA filing date Source: http://www.uspto.gov/web/offices/ac/ido/oeip/taf/patdesc.htm

8. More Information …. http://bit.ly/211BujS http://1.usa.gov/1HeRz7w

9. Success = Planning + ExecutionPerfectExecution is the art of getting things done faster About Entroids Your Innovative Product Development GPS Strategic Execution Key to success is simplifying strategy to tactical activities that result in achieving the goals; and keeping the team focused and getting these tasks done. The activities of the team will be in flux depending on circumstances. Keeping team tasks nimble and aligned to strategic needs is the ultimate challenge. It is the key differentiator for winning at execution. Perfect Execution The best selling book by Larry Bossidyand Ram Charanhas the title “Execution – The discipline of getting things done”. Perfect execution is an extension to this definition. Startup life is chaotic and its easy to get caught in the whirlwind of daily firefighting and lose focus on more important things. Keeping focus of the team and the habit of getting important things done is the core of Perfect Execution. The Science Of Startups I wish we could say there is a formula for success. Next best thing is to use productivity tools that keep your team tasks aligned to the strategic needs. One simple and effective tool to use is the “A3 Management Process” popularized by Toyota. At Entroids.com, we understand the need for speed and consistency in getting results. It is one way to automate productivity and promote team accountability.

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