Every Patent Author thinks about threats to their Patent or those who would steal the idea, and rightly so. But what is one of the most OVERLOOKED threats to ones ideas and patents, a threat that could cause him or her to actually lose their fantastic patent or patents down the road? I had to face this head on with my planning and conceptualization DigitalConvergence with my creation of CueCat , CRQ and Cues.
Which would you choose?
- Someone you shared the idea with long ago?
- Someone with a similar idea to yours?
- Someone who is lurking around your business trying to steal your ideas?
- Employees, past or present?
- Your very own Patent Lawyer?
- Your most trusted confidants and/or investors or key partners –employees?
- The UNKNOWN?
Some interesting choices here, right?
Every Inventor in their right mind (as should be with their Patent Counsel) should always think defensively about the threats and the outright stealing through claims of ownership on ones patents. Most, when polled about the choices above would think that 1, 2 and 3 are the most dangerous. But in reality, there is even a BIGGER threat. And that is the choice of 6.
Wait a minute? 6 is ones MOST TRUSTED CONFIDANTS and INVESTORS and KEY EMPLOYEE or PARTNERS. Yep, that’s the culprit. Seems unlikely, but this is where, if you don’t develop your patents correctly, you could be opening yourself up for heartache and legal pains (and pains in the Ass) later on. I had many trusted confidants and employees, co-founders and such as Kozette Hedger, Luis Vallecillo, Brad Smith, Brandon Brown and Jeff Harris, Bill Hunt, Rick Stark and Jack Turpin, just to name a few key ones. Brad Smith was the real lynch pin and mega-watt star.
First let me share with you the legal precedence and then share with you my personal experience.
Did you know, that anyone IN THE ROOM with you when you flush out your patent idea or what you want to do with it – and IF they even discuss YOUR IDEAS with you – can make a claim later on against your patent or portfolio?
This single fact is often an area the Patent Inventor is not even aware of or forgets and sometime, he or she has already done this BEFORE they actually engage their Patent Counsel. Then, there are Patent Counsels that don’t even bring up this point and forget or do not know to ask their clients “Who was in the room with you when you were doing…such and such…with this patent?”
Luckily (and here comes the personal story) my Patent Counsel- Gregory Howison (who is a brilliant, brilliant man) KNEW to ask this question of me, when going over the Patents I had conceptualized and developed for my various technology. As an Inventor who already had to defend and WON a huge Intellectual Property Infringement Case worth Millions, and in my earlier days with Greg Howison years BEFORE this round of patents, I had never heard the question “WHO WAS IN THE WAR ROOM WITH YOU?” I call my patent development area and meeting room, THE WAR ROOM.
I thought about it and realized, that there were individuals in “The War Room” at certain times, and one individual more than others, since he was my liaison with the developers and code heads who were given certain (but disconnected pieces) of code to work on so they would NOT know what I was developing.
It was a WOW moment. At that moment, my Attorney Greg informed me that, this person, down the road, could challenge the development of the patents and thus the ownership and throw a wrench into the machinery cogs of the company and patent portfolio I was building. I was faced with three choices:
- Immediately fire the individual before my development s and technology advanced too far down the road, and HOPE the individual did not assert future claims against the ownership, or;
- Have the individual sign an agreement agreeing that “HE was not the originator of the patent and thus had no claims against it”, but this too was a risk:
- It could de-motivate the person and actually FORCE them into making a claim they never knew they could make, and thus IF the company and technology became HUGE then most assuredly – especially if they were no longer with the company, would come back later and make a legal claim, or;
- I could select to just ADD the person’s name as one of the Inventors on the Patent, knowing that the Person with the TOP NAME BANNER was the actual inventor and how the patent and portfolio would be referenced in the future.
What choice did I make when faced with this situation?
When thinking of CHOICE 2 ABOVE – I knew this individual was ego driven and was a “hey look at me” kind of guy. So, my Board and I sat down and discussed it and we decided, IF we were to bring this up now, we would de-motivate the guy and although he was great at demos and communicating technology (since I had personally trained him as a media talent and broadcaster for another project, since during that time I was still packaging and developing TV programs and personalities, creating the show(s) or character(s) of: Nettalk, NetTalkLive, Nethead, Gadget Guy, Weborican, Webhead, 1-800-Be-A-Geek, Newbie and many many others) that he would possibly sink emotionally too low and we really did see merit in keeping him. And besides, my core advisors and Board at the time KNEW we would be a huge hit, and we did not want to create or leave loose cannon out there. So we did not select option 2.
Well, when thinking of CHOICE 1 ABOVE – I had a hard time (I guess I am a softy) in just letting the guy go. He was a tech salesman who was the last of my core team to jump and join us in our start-up. All my other guys, dumped their jobs and came on board – MOST WITHOUT PAY, knowing we would get there and they would soon be on salaries, but this fellow was a great tech demo person that I had experience with, but we HAD to BRIBE him with a HUGE SALARY to get him to leave his current cell phone salesmen’s job. He could and would only work IF HE GOT A CHECK, and we relented, we needed a great demo guy, so we paid the salary. This caused quite a stir at the company with all the people who were working for free or next to nothing, but we decided we needed to do it.
So, OBVIOUSLY we opted for the least path of resistance and chose CHOICE 1 ABOVE and just added his name to the patents to solve the situation. He was awarded options and a great salary and got to travel, and besides, he like any other employee of the company could be terminated (which he was laid off later on, after many times trying to find a place for him to excel within the company).
So, did the advice of my Patent Counsel prove to be right? You BET! Our company averted a potential problem down the road, even though with one other person we did have to fight, simply because they would not sign the release confirming that they were actually just a work-for-hire contract individual. Why would they not sign?
Well the tech guy, who recruited the contract guy, was supposed to have that document signed months and months before, but now by this time the company was surely going to make it huge, and the contractor saw the inevitable dollar signs and tried to take a piece of the pie and force huge dollars. We solved the problem, and I learned many, many valuable lessons.
Here is what I learned fighting THIS PARTICULAR BATTLE:
- UNLESS the person in your own WAR ROOM is an actual inventor or co-inventor DO NOT let them in your inner sanctum of the WAR ROOM unless you have a document signed that they ARE NOT an actual inventor or co-inventor.
- When using a contract or work-for-hire person that writes any code for you to your specs or ideas, MAKE SURE before you tell them a thing or hire them, that you have all your contracts in place. Those contracts are: (a) non-compete, (b) independent contractors agreement, (c) work for hire contract (d) do not disclose agreement (e) no claims agreement (f) release of intellectual property rights and claims.
- I also learned DO NOT think others will take your Patent as seriously as you do and will not cherish it as much as you do. I gave the young tech guy the responsibility of getting the vendors docs signed and then I never followed up, trusting it would be done. WRONG (with a huge honk-skid-crash-impact sound effect added here). This error, along with him failing to get some patents I created filed in a timely manner or at all (since I was developing 10-20 every single week) cost us HUGE attorneys fees and even cost us on some key dates and, in one instance cost the company $10 million in cash to license another patent we should have never had to license. So, when it comes to protecting your baby, you have to stay on top and keep a close eye. Don’t think a nanny can handle it. Be a better parent and raise your child yourself!
So, as you can see, I learned the hard way. But you don’t have to. There are KEY BATTLES SECRETS for developing and protecting your ideas and patents. It’s up to you and only YOU will treat your patents with the respect they deserve.
For more insights and valuable advice from my $200 MILLION DOLLAR education, get my book – PATENT WARFARE (coming out in 2012 so mark your calendars). And YES, hindsight is a valuable thing. At the time selecting CHOICE 1 ABOVE was the best choice for the company. But now over 15 years later, that choice had an even different and distasteful outcome I could have never imagined. What is that outcome? The cell phone salesman that we did not want to fire or de-motivate, now has his name on some 47 patents and runs around touting his “Inventorship” and” Entrepreneurship” and “Money Raising Abilities” all over the web and conferences. Don’t get me wrong, he has his skills and knows what was created and how to explain it, but developing patents, building a company and funding it are huge undertakings.
Do I resent the claims? Yes. But now, 500 more various filed and approved patents down the road I can’t be upset over doing what was right for the company at the time.
Learn from my mistakes, since mistakes do not have to be repeated. Just like a mentor and my long time friend Blaine Thacker always told me:
- 1. “One flower does not a spring make”, and;
- 2. “Gauge people like a war! Who would take a bullet for you and who would have your back against the enemy when your back is turned?”
Thacker was right and those are two of the most valuable lessons of my life.
