11 Ways to Stop Companies From Ripping Off Your Invention
Inventors, wake up! It’s a cruel, cruel world.
Commercializing a product idea has never been easy. And today, competition is fiercer than ever. True, the internet has provided new outlets for marketing and selling. But there are also copycats around every corner waiting to pounce.
If you want to succeed as an entrepreneur, you need to make smart choices -- very smart choices. My advice? Stop complaining and get in the game! What’s "fair" doesn’t matter. In business, there’s no right or wrong. This is war!
I hear the stories often. Some naïve, innocent creative person shares his or her idea with a large company during a meeting only to discover, later on, that said company has taken action. Are you kidding me? People in business taking advantage of one another?
This is not news, but it’s reported as such.
For example, consider U.K. paper The Register’s recent article, “The dingo... er, Google stole my patent! Biz boss tells how Choc Factory staff tried to rip off idea from interview.” The story went this way: A researcher at MIT who'd met with Google's Advanced Technology and Projects group admitted that during their exchange, she shared what she had been doing to develop interactive books and storytelling techniques.
By way of background, she explained on her blog: “I never thought about patents much. I just wanted to make stuff and share it with others. Then one day someone else patented my work.”
My advice to any inventors out there with a similar stance would be to get their heads out of the sand and find a better strategy than just wanting to "make stuff and share it with others."
Large companies have been known to work around and even, yes, take inventions that are not patented. So, please, do your homework. Whom are you dealing with? Study the company's track record so you can properly prepare. You have leverage; you just don’t know it yet.
The reality is that any company of any size is not your friend. Its people will try to work around you if possible. So, the sooner you start thinking more like an entrepreneur and less like a creative, the better.
Being fearful is not the answer. Arming yourself with knowledge is. If you want to avoid being ripped off, here are my tips.
1. Don’t disclose your invention to anyone without taking precautions.
That means, don’t share your invention on your website, Facebook, Instagram, LinkedIn or any other social media websites hoping that the right someone will find you.
2. Approach crowdfunding cautiously.
"A catalog for copycats" is how someone recently described crowdfunding to me. If you go this route, make sure you file a design patent and a trademark. Approval takes about 10 months.
3. Try to license your product idea.
This is the best protection today. Why? Because when you license to a company already in business, the speed to market is on your side, and that's important. Said another way: “Sell first, sell fast.” That’s how As Seen On TV expert Michael Weinstein of Allstar Products recently put it when I interviewed him.
Also consider the story of Bunch o Balloons inventor Josh Malone. He was able to fight a copycat in court because he licensed his invention -- originally a smash hit on Kickstarter -- to the toy company Zuru.
And then there's this from U.S. Rep. Thomas Massie, R-Ky., a congressional representative, yes, but also an inventor fighting to protect patent rights with federal legislation: “It’s almost always preferable to find someone who will license your idea," Massie told me by phone. "Do as I say, not as I did. I started my company from scratch, raised a lot of venture capital, hired marketing folks and got into manufacturing. As an inventor, I might have been better off trying to license my technology.”
Postcript: His startup never went public or was wildly successful, he pointed out.
4. Be highly selective about whom you approach about working together.
This seems obvious, but you'd be surprised. Always conduct a background check first. How does this company treat inventors? How many lawsuits is it currently involved in? What does its history reveal? If its track record is poor, you have two choices: Move on, or follow the steps below.
5. Don't share confidential information with anyone before filing for some form of intellectual property.
I am a huge fan of provisional patent applications because they’re inexpensive to file, and allow you to describe your invention as patent pending for the next 12 months. (Read my article “3 Basics for Filing a Patent That Actually Has Value” to help you write a better provisional patent application.)
6. Always share the benefit of your invention first.
If you are asked for any technical information, have the individual or company sign a non-disclosure agreement (NDA). Not just any NDA: Make sure you extend the time frame for up to five years. You also need to own any improvements made to the invention. No reverse engineering, either. Before the company shows your invention to anyone, it must sign the NDA. Don't allow any wiggle room.
Related: An Entrepreneur's Guide to Inventing
And, please, don’t cobble together your own NDA based on what you find on the internet. Have a licensing attorney draft one specifically to meet your needs.
7. Document every phone call and meeting, with next steps.
This is what’s known as a paper trail. In my own federal infringement court case, it made a difference. Make sure yours is thorough. Don’t be too obvious about it. Simply get into the habit of documenting and sharing what was discussed and "next steps."
8. Out-think them.
File additional provisional patent applications that include workaround language. Basically, try to steal your invention from yourself. How could you do that? Including variations is one of the best ways to strengthen your intellectual property.
Also examine your listener's patent portfolio and any patents pending so that you understand what’s important to that person or company.
9. Understand all manufacturing techniques and procedures related to your invention.
This advice is important! If you have to visit manufacturing facilities or hire a special engineer, that time is worth it. To ensure there’s no confusion on ownership, have this person and others you work with sign an NDA with work-for-hire agreement language.
10. Understand the landscape of intellectual property in your particular field.
Know your point of difference in relationship to all prior patents. Companies will argue that there’s prior art, and they'll be absolutely right. (Prior art is evidence that your invention is already known, which means it cannot be patented.) But if your invention hasn’t made it to market, there’s a reason why. Find out, and make your discovery the basis of your intellectual property. This is your point of difference.
For example, many patented inventions do not include a method of manufacturing. They’re conceptual only -- which leaves the door open for you to figure out how to produce them.
11. Hire a great attorney to help you with your intellectual property.
Again, start by examining your contact's track record. Make sure this person has had many patents issued. (You can find out on the USPTO’s website.)
Your attorney also needs to have a great bedside manner, which will come in handy when he or she fights with your patent examiner over office actions. If you’re in a particular field, find an attorney who specializes in the field. Ask for the total cost up-front, including office actions. What you read there could signal that your patent attorney doesn’t have your best interests in mind.
Your goal, overall, is to keep companies you work with honest. So, be a professional. Don't give them any reason to work around you. Work harder and faster than they do. This shouldn’t be difficult -- most people leave work at 5 p.m. -- whereas this invention is your baby, your bread and butter. Be sure to treat it as such.