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Intellectual Property Strategies To Grow Your Business · Pitch to Product

• Steve + Guest: I think that Caldwell is especially is very focused on creating value and getting that ROI on your intellectual property. And so we work very closely with the groups that come to us to be able to do that, not one size fit all, the the custom fit, you know, fit your needs into what it is that we are trying to protect. Hello and welcome to another episode of the Pitch to Product Podcast here at 52 Launch. I'm Steve Sisto, and I have the pleasure of being joined by McKendra Darbey, a registered patent attorney from Caldwell Law. McKendra, thank you for joining us. Thank you for having me. So we are talking all about intellectual property today. So let's start off, McKendra. What exactly is intellectual property and why is it such an important aspect of starting a business? Yeah, so intellectual property is going to be your intangible assets. So being able to protect the innovations you have, say patents, copyrights, as well as trade secrets. so each of those individual pieces is Property. And for a founder who's starting a business, maybe they have a product idea or contracting business, whatever it might be, how early should they start thinking about the process and what are the dangers of waiting too long? Yeah, you know, this is a complicated question because unfortunately I give the attorney's answer of it depends. you know, depending on where you are funding wise as well as where you are innovation-wise, you're gonna want to look at the way you're protecting things differently. and so someone that's just starting out with a single invention. They might may want to start looking after they've gotten some funding or and or even sooner as they're kind of building through so that you're able to check the white space in the area as you're building your product. And is it possible to even go in too early to the process and almost give your secrets away before you have a business set up? So it depends on who you're talking to as well. You know, if you're initiating with counsel right off the bat, those secrets are going to be. Between you and your your attorney. So you'll get that attorney client privilege. But as you're going into conversations with potential production teams or other partners, you want to make sure you have in place certain parameters like an NDA to say, okay, this is confidential. Let's keep it that way. Let's keep it within within our space. So we hear the term a lot from attorneys of starting the clock, where once you put the information out there, you've started a clock. What exactly does that mean? Yeah, so that r relates specifically to the one year period you have in the US to be able to pursue patent protection for a specific innovation. And so that would be that starting of the clock is that first, you know, public-facing interaction. So whether or not it's on sale, if you're out showing it and doing different presentations to different groups without a control, those could all potentially count as public disclosures, which will start that one year clock. And Say somebody is workshopping their idea on AI, an open source LLM. Does that count as starting the clock? So right now it's a little unclear as to where exactly that's going to land. I think that, you know, with some of these recent hearings and and decisions around the conversations that you're having with a GPT model, are are discoverable. And so as As you think about that, you want to be careful what it is you're putting in prompt wise, as well as also the the piece of who is the inventor. you know, if you're the one solving the the problem that it is, or is it AI that's solving that problem? and so that's a really important piece to keep in mind as you're kind of workshopping these things with a GPT or, you know, other people. You know, you wanna make sure that the innovation itself is human attributed. Because AI can be such a great tool for workshopping, but it can't write a patent application. It still still needs that human inventor, that human input. Correct, correct. Yes. And you just need to make sure that you are documenting exactly what it is that your is your contribution versus what is, you know, coming through. what are some of the biggest mistakes or misconceptions that founders have about the patenting process? I think I see a lot of inventors thinking that their idea is not innovative. Because I think innovation means something different to everybody, to the patent office. It's a little bit lower of a bar than the common lay person because they think, I have to have invented some extremely new and like groundbreaking thing. But sometimes even going through that process of talking about what you're working on with somebody that isn't in it every single day helps you to bring out those specific innovations that might overcome the the bar. So it doesn't have to be this big technological breakthrough. It could almost be a tweak on something like a household item, but just a new tweak on it and that it counts as innovative. Exactly. And honestly, some those are some of the most important innovations to protect because you're able to then get that value out of it. because timing is everything. You know, if you invent something entirely new, but no one's moved to move to using it yet, you're not gonna be able to generate any revenue. It's something we say a lot to our clients where you don't need this entirely new product to be successful. If you take an existing product, make it 10 or 15% better, boom, you you have an advantage over the rest of it. And with patenting, it sounds like it's the same way. Exactly. No, yeah. That is taking those off-the-shelf products to solve a different problem or to solve a new problem that hasn't been solved before, that's the name of the game. where innovation is is, I think, one of the most important areas. So what if a founder has an idea? For a product and they want to talk to somebody such as Caldwell, what should they do ahead of time? How can they best prepare themselves for that initial consultation? Yeah, that initial consultation, we're gonna kind of run through the process to to generate some knowledge around IP generally, as well as the patent process as you're going through prosecution. some of the other things that they should prepare there on their side of things is, you know, what is the problem they're solving and what are the steps that they've taken to solve that problem. Because that generally brings out a lot of those you know, different nuances that need to be described and need to be documented. So a lot of people when they think about intellectual property, it's about protecting their brand and lawsuits and and the litigation and all that. Is IP purely defensive or does it also have a lot of offensive assets, if you will, to to leverage upon? There are definitely both sides of it. You know, the the def or the Going out and suing and litigation, those are always the attractive ones where it's like, somebody just won a billion dollars in this suit. But at the end of the day, litigation is very expensive. and you know, depending on where you are in the grand scheme of the how big of a fish you are in comparison to others, those are of course everyone is looking to that and that's the thing they think about. However, I think the defensive side of things, being able to and I guess defensive, offensive, you know, taking those two, they they kind of work. Together. You know, you have if you can do licensing models, that's one way of also generating revenue. and then there's also this idea around you have a stake in the ground. you know, when you have that protection, you have that right to say, no, I'm not infringing on someone else's product. I've already gone through this process and I've staked out exactly what it is that that we're doing. So using IP to kind of like you say, put a stake in the ground and claim your territory, and then from there you can. build upon it, but having that foundation to work with is such a big advantage. Exactly. Yes. Of course. where exactly can IP fit then within those those growth strategies? I I know you mentioned licensing, for example, where else? Yeah. so even when you're moving towards, if you're moving towards an exit or, you know, a a majority or minor sale, those areas can also be things that you're building your IP for. you know, as you're talking to investors, if you have some IP on file, that's going to seem signal to them that you're a much more serious founder moving into those into those systems because you've already put in the the assets in order to get that protection. And so within IP has a very big umbrella, patents, trademarks, et cetera. Where does all those strategies fit within those different areas? I think that you know, as you're viewing a business, everything kind of needs to be viewed from a a wide angle. You bring in your specialists for each of those specific zoomed-in areas, the trees in the forest. But as you are talking to the specialists, I think it's important to say, okay, so this is our branding, but this also fits in with our innovation and the patent side and the copyright side of things. Trademarks and copyright obviously are very close hand in hand because as you're creating things, you're also creating those rights in common law rights. Patents are a bit more formalized in the sense that you have to actually file something in order to get that protection. But as you are thinking about each of those individually and the cost associated with each of them, that is where the strategy comes in and the different partners that are going to be able to assist you in that. So having say a patent attorney, but as well as just an overall intellectual property attorney, they can help guide you through the process of this is what you can do with your brand, this is what you can do with your patent, and this is how you can expand even to other industries potentially. Exactly. Yeah. No, the being able to one of the most important things I think with founders, especially, is being able to prioritize for them. So being able to say, here are all of your options. We're not going to talk about all those options. That's way too many things to focus on right now. We need to to prioritize this list, both with your funding availability as well as what is most important to you right now. The lawyers, they think about all the things that could go wrong, but we don't share all those with our client. You know, we don't want to worry them on that sense. So so bringing in counsel helps you to prioritize the different areas that you need to address first. For somebody who maybe doesn't have these unlimited budgets, say they're a solo entrepreneur, how do you go about deciding what those priorities are? Do they need a patent? Is the copyright on their logo or their name more important. What what is the process behind that? Yeah, so it all starts with a discussion. You want to lay out the business as it is now, the business as they see it in the future, as well as where they are in in the process of any funding and whether or not they're bootstrapping or they are doing a family fundraise or moving into a more serious funding as well. Each of those things is going to have an effect on the strategy that comes out of that. so it all starts with a discussion and aligning the founders goals with their current situation. Because a a lot of times our clients they go in thinking I need a patent right away, I have to protect, and we kind of have to say, Well, we'll slow down. You might not necessarily need a patent depending on the complexity of of your product. So it's not a a one size fits all for for everybody. Definitely not a one size fit all. you know, as we move into this AI era, everything is like, we want to make sure we have a process for each thing. And yes, there's a general process, but the thing is is that it is going to depend on each individual and where they are at. So yeah. And with regards to Caldwell law specifically, what is your philosophy or or process for in intellectual property that might differ from other law firms? I think that Caldwell is especially is very focused on creating value and getting that ROI on your intellectual property. And so we work very closely with the groups that come to us to be able to do that, not one size fit all, the the custom fit, you know, fit your needs into what it is that we are trying to protect. and and again, coming back to that prioritization. So it's not just about the patent certificate, it's about everything you can do with it to help grow your business. Exactly. Exactly. And even if you're not going to do a patent now, documenting those innovations helps you to organize the the process of, you know, maybe we're going to do this in the future. And maybe we'll keep this secret, we'll make sure it's under lock and key until the point that we're able to to move forward with that protection. That is is an interesting point because I know a lot of founders, they want to tell the world about the product, but they also want to keep it a secret. What's that balance that you have to play where yes, you wanna start the momentum and you wanna get pre-sales maybe, but you also can't tell the world everything just yet. What what what's that title, rope to walk? You know, it is it's an interesting one. and again, depends on the person because if they're in discussion, so a lot of these discussions can be had under an NDA and not at that point, then it's not public. what you want to do is you you wanna balance the again, the I wanna share this with the world right now with the we have to protect this until we're ready to launch. and so each of those, each person and each group is going to have a different, you know, depending on the connections that they have and how quickly they need the excitement to grow in order to get some of those first sales. and those are discussions that you have with, you know, the partners you're working with. Can we keep this under lock and key? Are we do we need to? Do you have some big event that's coming up that we want to be ready for to then have that protection in place? And then there's also the considerations of you want to make sure protection is in place if you plan to go international, because some jurisdictions don't give that one year grace period. And so those are discussions that you're gonna have about business strategy, whether or not you're staying in the US or if you plan to expand further. So say it's a Christmas product and it does fit under the innovative category and and so they end up needing a patent at what point can they then start to market their product? Is it at the patent stage or the provisional patent stage? Do they have to wait until they officially launch? How might that work? Yeah so once you have a file and you have a filing date afforded to you by the USPTO you then can say your your product is patent pending. And so of course if you want to make sure that if there are new implementations, you're keeping those under lock and key if they're not included in that the what the specification dictates. But you can move on and say patent pending and start marketing that product at that point. And I think another misconception that I think some of our clients have is they feel as though the patent is the end all be all. Nobody can steal this. But is that exactly true? Say, say a product has five components and somebody takes three of them. They haven't exactly violated the patent, have they? So this is and yeah, this is definitely a question that comes up very frequently. you know, there's there's two main kind of things that you're bars that you're getting over with the USPTO. You have a 101 rejection, which is, you know, your your it can't be an abstract idea, it can't just be a a hu organizing human activity sort of thing. and then you also have your one three. So that's where the obviousness is going to come in. and so that and as well as a one two, apologies. That's there's there's more than that. So But to keep it simple, the, you know, the obviousness or anticipated by somebody else's disclosure. and so if the patent bar or I'm sorry, the USPTO has decided that you know these elements A, B, and C, are within your A, B, C, D, that likely is going to bar it in a in a sense. and when you're literally infringing, it means that you're doing each of the individual limitations that's listed in their broadest. When you say obviousness to people who aren't lawyers who feel like they know the word what the word obvious means in the legal sense, what exactly does that mean? In the legal sense, you know, it's it's definitely a different bar, you know. Each of these things is is and why I think patents get so confusing because we use kind of these layman's terms for a lot of different areas of it. but obviousness itself in the legal sense is going to be Were was there at the time of you know your filing, was there a a reason that someone would have taken this product and this product and put it together and to make your product? so going back to the if you're taking off the shelf and adding something to improve it, is that an obvious implementation based off of these previous disclosures? And sometimes it is, and they'll and they'll argue that and then we'll argue as well and say it's not obvious, you're using. hindsight bias or this is why it's not obvious because we're solving a need that went unmet for for a long period of time. So that speaks a lot to the entrepreneurial spirit where sometimes you see an idea, we're like, how did that person possibly come up with that? But to that idea, it almost felt obvious to them. Or it's like, obviously I connected these two things together. Right. Patenting works kind of similar. Right. Well it's interesting you say that because I think that's why a lot of innovators are like, well, I don't have any innovative have anything that's innovative because it it's an obvious you know implementation to that. They're like, Of course I would put these two things together. We don't tell the odd USPTO that because you know but being in it is going to seem more obvious because you have that hindsight bias, because you've already solved the problem. But to somebody else, or and even in you know the eyes of the USPTO. those implementations may not have been as obvious as we thought. How open minded is the USPTO in terms of taking in things that might be a little out there or or small tweaks even where it's like, okay, yeah, sure, take it. I mean, it so it it truly depends on the examiner that you get. I think that each one is going to have their own opinions about what is obvious and what that bar is. Of course they have guidelines that are are pushing them one way or another, but I think that You know, as you are approaching any specific examiner and their arguments, they're always open-minded to to discuss with you. And sometimes, you know, you have to remind them and say, hey, I know that this seems obvious now because this was filed a year ago and you're just getting it on your docket now. but at the time of filing, the this was not happening. And this was solving this issue in a way that that no one else had thought of before. And that is why it it's innovative. On Wednesday, October 1st, 52 Launch and Caldwell Law will be hosting a founders event for entrepreneurs and growth stage companies looking to explore intellectual property and other entrepreneurship strategies. 52 Launch will be giving a presentation on our Accelerator program, which is our beginning to end full service product development framework. And Caldwell Law will be speaking to intellectual property strategies and how founders can use that. to grow their companies. Looking forward to the event and and all that will be able to attend. So we will have a link to the event in our description below. You can also reach out to us at fifty twolaunch.com to get more information. If they want to reach out to Caldwell Law, how should they do that? you can reach out directly to our marketing so the marketing at Caldwell Law dot com. Great. McKendra, thank you so much for joining us. Thank you for tuning in to the Pitch the Product podcast and we'll see you next time.