First, as discussed in Truth 9, “Screening and testing business ideas,” you should test and screen your business idea to make sure it has value in the marketplace. A common mistake that business owners make is to invent a product, spend a considerable amount and money to patent it, and find that the market for the product doesn’t exist or is too small to be worthy of pursuit.

Second, you should conduct a preliminary patent search on your own to see if your idea is already patented. You can do this by going to the United States Patent & Trademark Office (USPTO) Web site (www.uspto.gov/) and conducting a preliminary search. Just for fun, try this example. Suppose you invented a toothbrush with a tube of toothpaste attached to the handle. Go to the USPTO Web site, locate the Search text box at the top of the pages, and type “toothbrush + toothpaste.” You’ll find that 265 patents have already been granted for devices that in various ways combine toothbrushes and toothpaste. While you may find a new way to combine toothbrushes and toothpaste, and be granted a patent, you hardly have a completely original idea. In fact, patent # 6390103 is titled “Toothpaste Dispensing Toothbrush Having Floss Dispenser.”^[1] This patent, which was granted in 2002, goes one step further than you were thinking.^[2]

You should test and screen your business idea to make sure it has value in the marketplace.

None of this is to suggest that you shouldn’t apply for a patent if you’ve invented a new device, but just be careful. The costs involved, which vary depending on the complexity of the device, range from between $4,500 to $6,500 to patent a relatively simple device, like a new type of paper clip, to between $6,500 and $9,000 to patent a moderately complex device, like a retractable dog leash. The costs involved include attorney fees and United States Patent & Trademark Office filing fees. Costs go up substantially when trying to patent a highly complex product like a new type of medical device.^[3]

The costs involved include attorney fees and United States Patent & Trademark Office filing fees.

A patent is a grant from the federal government conferring the rights to exclude others from making, selling, or using an invention for the term of a patent. However, a patent does not give its owner the right to make, use, or sell the invention; it gives the owner only the right to exclude others from doing so. This is a confusing issue for many people. If a business is granted a patent for an item, it is natural to assume that it could start making and selling the item immediately. But it cannot. A patent owner can legally make or sell the invention only if no other patents are infringed on by doing so. For example, if an inventor obtained a patent on a computer chip and the chip needed technology patented earlier by Intel to work, the inventor would need permission from Intel to make and sell the chip. Intel may refuse permission or ask for a licensing fee for the use of its patented technology. Although this system seems odd, it is really the only way the system could work. Many inventions are improvements on existing inventions, and the system allows for improvements to be patented, but only with the permission of the original inventors, who usually benefit by obtaining licensing income in exchange for their consent.

There are three types of patents: utility patents, design patents, and plant patents. Utility patents are the most common type of patent and cover what we generally think of as new inventions. The term of a utility patent is 20 years from the date of the initial application. After 20 years, the patent (which is not renewable) expires, and the invention falls into the public domain. A complete description of the invention for which a utility patent is sought is required, including drawings and technical details. A patent must be applied for within one year of when a product or process was offered for sale, put into public use, or described in any printed publication—or the right to file a patent application is forfeited. There are three basic requirements for a patent to be granted. The subject of the patent application must be (1) useful, (2) novel in relation to prior arts in the field, and (3) not obvious to a person of ordinary skill in the field.

One provision of patent law that is particularly critical to small business owners is that the U.S. Patent and Trademark Office (USPTO) allows inventors to file a provisional patent application, pending the preparation and filing of a complete application. Filing for a provisional patent allows the term “Patent Pending” to be applied to an invention. Filing for a provisional patent grants “provisional rights” to an inventor for up to one year, pending the filing of a complete and final application.