July/August 2000


A Patently Obvious Strategy

Protect your intellectual property with a business-method patentexclusivity makes your business worth more.

Mine! Mine! Mine!you expect to hear it from the mouths of creatures suffering through their terrible twos, and usually a frazzled parent is nearby to settle the dispute. But what if the exclamation is coming loud and clear from board-room executives? Whos around to decide whats fair then?

Patent attorneys.

Take, for example, the widely publicized dispute between Barnes&Noble.com and Amazon.com. The issue: who owns one-click shopping. The decision: whoevers invented it and got the patent.

And as the story goes, because Amazon.com invented and owns the patent on the one-click shopping-cart strategy, Barnes&Noble.com was prohibited from using exactly the same method and had to redesign its website. The decision resulted in lost business during peak season for Barnes, and a hands-in-the-air victory for Amazon and any business that can benefit from strategy patents of its own.

You dont have to be a huge company like Amazon or Barnes to benefit from a business-method patent. Sometimes the smaller companies have the biggest ideas.

I Saw It First!

Patrick Thean, CEO and co-founder of MindBlazer, says he had two good reasons to secure a business-method patent: One, as a defensive measure. Other people are patenting their ideas. I dont want someone claiming ownership to an idea I think is minethen expect me to pay them for it. Two, because it could generate revenue if someone else wants to license out my technology.

MindBlazer is a business education Web service that lets companies provide live virtual training to their staff. Then, after the session, the company can create links from their own websites to the training contentthey own access to the archives. MindBlazer calls it their patent-pending learning process.

Thean says, With my first company, I did not do any patent stuff. I was lean, green, and uneducated. But with a company like MindBlazer that has a truly unique idea, the patent protects our ingenuity, and Ive got the patent as a preventive measure.

A patent can add extraordinary value to a company, especially if its a small company or a Web-based business. Thean says, The greatest assets for small companies are soft assetspeople, brains, brands, customers, and patents.

And, for [MindBlazer], having a patent has been a terrific marketing strategy, Thean adds, It creates news and generates interest in the company.

Gimme!

Mark McCoy, a patent attorney with Alston & Bird in Raleigh, N.C., says, Nothing is as popular as a great idea. Especially one that is commercially successful. He adds, if youve got a great business method, you need to patent it. Once word is out about your idea, everyone will want to move into your market space. At that point your patent is invaluable.

According to McCoy, a patent can exclude others from making, using, selling, or importingand in the case of business methods, also from copying your way of doing things. Whats more, the patent gives you the right either to ban others completely from using your idea (guaranteeing your exclusivity in the marketplace), or to license it out to would-be copycats. Either way, you win.


So, if you have an idea, business method, or invention you think is patentable, check with your attorney. McCoy says, Every entrepreneur needs to think like a venture capitalist. Be sure when you start your company you have solid infrastructure, good marketing, and exclusivity [obtainable through a patent]. Exclusivity is one of your most valuable forms of intellectual property.

No Fair!

When you go into business, it is your obligation to find out if you are infringing on someone elses patent, McCoy says. Youll know whats out there if you conduct a patent study, and you should, because if you violate another patent you can be held liable as a willful infringer.

And likewise, McCoy adds, once you have a patent, it is your responsibility to be on the lookout for infringers. If you should find one, it is your decision to license or prosecute.

In traditional bricks-and-mortar companies, the workforce, location, and inventory are all highly valuable property. But in e-commerce, sometimes the only true property you have is intellectual property protected by patents.

Mark McCoy answers your business-strategy patent questions:

Who needs one?
Virtually everyone. Your business is stronger with one than without one, and it increases valuation.

How much does it cost?
An estimated $10,000 to $20,000.

How long does it take to complete the application process?
About 14 to 24 months.

How long does the patent last?
20 years from the filing date.

Is it renewable?
No. Once the patent expires, the business method becomes public domain.

How do I get started?
Contact a patent attorney. The attorney will work with your inventors to learn the technology, conduct investigations, prepare the patent application, and prosecute it. The attorney can also help you decide, case by case, whether to enforce the patent or license your invention.