Article Date: 2/1/2008

The Dimensions of Invention
invention

The Dimensions of Invention

Follow these nine steps to turn your idea into dollars.

ALAN GLAZIER O.D., F.A.A.O., Rockville, Md.

We've all thought of ways to innovate in ophthalmics, whether it be a new software idea, diagnostic device, frame, contactor ophthalmic lens, or pharmaceutical product. The problem: The idea usually ends with the initial thought. This means that patients may miss out on something that may have significantly improved the quality of their lives, and you miss out on a side income that may have garnered you hundreds of thousands, maybe millions of dollars.

I've found that many creative people permanently shelve their invention ideas because they simply don't know how to get them off the ground. These nine steps illustrate how you can become the next Thomas Edison of eye care. (See "What is a Trademark, Servicemark and Copyright".)

1. Write your idea, and get it notarized

Write your invention idea in great detail. Include all the methods by which it works as well as its different sizes, shapes and colors. Wrack your brain to think of every possible manifestation and purpose for your invention. This is important, as if you choose to file a patent, it will help you and/or your patent attorney to provide the best protection from those who may attempt to steal your thunder with a variation on your idea. (See "Patents Defined".)

Once satisfied with your description, have the document notarized. Notarization creates a timeline. Therefore, if you decide to file a patent application, and someone else files one for the same invention at the same time, you can provide a date of invention. I, myself, was able to beat a major manufacturer to patent ownership for a contact-lens product due to notarization.

To find a notary public, simply type "find a notary in (your state)" on your favorite search engine. Notarization fees vary state by state from "no fee schedules" (Louisiana) to $10.00 (Colorado), according to the National Notary Association (www.nationalnotary.org).

What is a Trademark, Servicemark and Copyright?

Trademark: A trademark is a word, name, symbol or device that one uses in trade with goods to show the source of the goods and to differentiate them from others' goods, according to the United States Patent and Trademark Office (USPTO). One uses a trademark to prevent others from using a confusingly similar mark, but it doesn't prevent others from making the same goods or selling the same goods or services with a clearly different mark. For more information on trademarks, visit www.uspto. gov/web/offices/tac/doc/basic.
Servicemark: This is the same as a trademark with one exception: The servicemark identifies and differentiates the source of a service as opposed to a product.
Copyright: A copyright is a form of protection the USPTO provides to authors of "original works of authorship." This includes both published and unpublished literary, dramatic, musical, artistic and other intellectual works. The owner of the copyright has the exclusive right to copy the copyrighted work, prepare derivative works, distribute copies or phonorecords of the copyrighted work, perform the work or display it in public. A copyright protects the author's form of expression, but not the subject matter of the authored work. An example: You can copyright a description of a widget, but you cannot prevent others from writing their own description of the widget, according to the USPTO.

You may file a provisional patent application if you want to defer the cost of arguing with the patent office to obtain your patent. But, your invention must be a utility invention (a contact-lens solution, etc.), not a design invention (contact lens, etc.), for you to do so. (See "Patents Defined".) Although the United States Patent and Trademark Office (USPTO) allows inventors to file their own patent applications, I suggest you hire a reputable patent lawyer to help you through this process, as its complicated. The law doesn't permit patent lawyers to represent you before the USPTO unless the USPTO approves them. (You may select a USPTO-approved patent agent instead, but keep in mind that this person can't conduct patent litigation or any services considered as practicing the law.) To find a USPTO-approved patent lawyer, visit www.uspto.gov/web/offices/dcom/olia/oed/roster/index.html.

Using the USPTO-approved patent attorney directory, make a list of attorneys in your state who are closest to your town, ask whether they have a background in medical patents and specifically, ophthalmic inventions, and inquire about their hourly fees, so you can shop around. You may also want to ask colleagues who live nearby whether they could recommend a reputable USPTO-approved patent lawyer.

2. Make sure your invention doesn't already exist

To ensure your invention doesn't already exist, examine the previously granted patents in the ophthalmic space (optics, frames, contact lenses, contact-lens solutions, pharmaceuticals, diagnostic and therapeutic equipment, etc.), to which your invention belongs. You can do this in one of three ways:

► Visit www.uspto.gov/patft/index.html, which has information on both issued and published patent applications. Here, you can conduct a quick or advanced search, a patent and/or publication search and/or view patent full-page images and more.

► Visit the Patent Search Room of the Scientific and Technical Information Center of the United States Patent and Trademark Office (USPTO) located on the first floor of 600 Dulany St. in Alexandria, Va. The room contains patents granted since 1790. You can search and examine patents related to your invention via a computer workstation. In addition, search aids, such as the "Manual of Classification" and its subject matter index, are available in an array of formats. Also available: microfilmed deeds and patent assignment records of transactions affecting patent ownership.

► Visit one of the several USPTO-designated Patent and Trademark Depository Libraries (PTDL). For a complete list, go to http://www.uspto.gov/web/offices/ac/ido/ptdl/, and select "Linked List to Libraries By State."

3. Ensure your Invention is marketable

Many innovators who discover their invention is unique immediately hire Patent attorneys to quickly file non-provisional patents. This is often a mistake, as having a unique idea doesn't guarantee success. To avoid spending money needlessly, determine whether a large enough market exists for your invention to attract investors. Inventions that enhance large markets or create new market space have a greater value than inventions for existing or saturated markets, in which profit margins are already at acceptable levels.

For instance, if your invention is a novel multi-focal- or toric contact-lens, it will most likely gain traction and the attention of investors because no one has perfected either of these technologies. In other words, these are markets with significant unmet needs, which means you may fare well competing in this space.

No one can be absolutely certain of an invention's market-ability. But, industry experts (those who regularly publish in eyecare journals, speak at trade shows and continuing-education meetings) can help you determine your invention's chance at success. Contact them by:

► e-mailing or writing them letters, which outline your invention and your desire for their expertise.

► Hiring an invention-consulting firm. Visit your favorite search engine, and type "invention consulting." Keep in mind, however, that hiring this type of firm is often a very expensive option, as these outfits usually take a big piece of equity in your business entity. Also, visit www.uspto.gov/web/offices/com/iip to educate yourself on possible fraudulent invention development and marketing firms.

4. Run a feasibility study

If the industry experts with whom you've consulted feel your invention is marketable, study its effectiveness, and analyze its technical aspects. This is called a feasibility study.

To accomplish this, you must first hire one or more reputable engineers who specialize in the ophthalmic niche your invention belongs. (To locate this type of engineer and to determine how many you will need, ask your industry expert[s] or your invention-consulting firm.) These engineers will know what type of test or tests your invention must pass to achieve its intended goal.

For instance, if your invention is a solid, such as a diagnostic device, you would hire a biomedical engineer, as he develops and evaluates systems and products for use in the biology and health fields. If your invention is a liquid, such as a contact-lens solution or dry-eye drop, you would hire a chemical engineer, as chemical production and the manufacture of products through chemical processes is his specialty. If you've invented an electronic medical record (EMR) software, you'd hire a software engineer.

A feasibility study saves you thousands of dollars in development costs (i.e., creating a prototype), should your invention fail to meet your expectations. Feasibility study cost greatly varies, as it depends on your invention, the number of tests required and the number of engineers needed to conduct the test or tests. My advice: Make a list of reputable engineers with whom you'd like to work, and describe your invention to them, so you can obtain ball-park figures and determine who's the least expensive. Keep in mind, however, that if your invention doesn't work exactly as planned or you learn it's capable of more than what you intended, feasibility testing will cost more.

5. File a non-provisional application for a patent

If you're satisfied with the feasibility data of your marketable invention, you may want to file a non-provisional utility or design application for a patent. (Visit www.uspto.gov/web/offices/pac/utility/utility.htm for information on utility patents and www. uspto.gov/web/offices/pac/design/index.html for information on design patents.)

If, however, feasibility data reveals your invention is flawed, you may choose to delay or scrap the idea of filing altogether.

As with filing a provisional patent application, non-provisional patents can also be difficult through which to navigate. Therefore, either retain the services of the patent lawyer with whom you worked on the provisional patent, or if you haven't filed a provisional patent or used a patent lawyer to file the provisional patent, hire one from www.uspto.gov/web/offices/dcom/olia/oed/roster/index.html.

Remember: The breadth of the patent can make or break your ability to move forward, as investors choose to invest in companies with strong intellectual property portfolios.

6. Set up a business entity

Once you file your non-provisional patent, set up a business entity, such as a corporation, a limited liability company or a limited partnership, with advise from a business attorney, and assign your patent to the entity. Creating a business entity is important for three reasons:

It enables you to create a strong board of directors and scientific advisory board. You'll need the former to advise you on the business aspects of advancing your invention toward the market. You'll need the latter to advise you on the technical aspects and act as a bridge to industry experts and ophthalmic corporations, with whom they have ties. These experts and corporations may eventually have an interest in learning about your invention with the intent to license or purchase it. If the people you ask to serve on your boards believe in your invention, they'll join your boards and offer their advice in exchange for an ownership interest or option (the right by one to acquire stock) in your business entity.

It enables you to attract investors. Investors likely will not provide you with funding unless you have a legally formed business entity that you set up to issue ownership interests to them in exchange for their investment.

When an investor gives you money, document the investment transaction in writing, and ensure you and the investor sign it. Depending on your business entity, this may be in the form of a shareholders agreement, an operating agreement or a partnership agreement. In some cases, ownership interests are evidenced by fancy certificates issued to the innovators. But, rarely is an investor going to hand you thousands of dollars informally and trust that everything is O.K.

An entity structure enables you to dole out ownership interests or a "piece of the pie." If you're soliciting for investors, consult with your business lawyer to determine whether you need to follow any securities laws or regulations.

It enables you to protect yourself from possible lawsuits. Your patent doesn't have to be approved for you to make, sell and distribute your invention. For this reason, many inventors who have filed a patent application, be it provisional and/or non-provisional, begin doing so because they believe no one can claim their idea as their own and that the USPTO will approve their patent. This is why some products contain the words "patent pending" and "patent applied for" on their labeling. The ramifications of this action: If someone wins a lawsuit against you for stealing their idea, and you didn't assign the patent application to a business entity that protects you from personal liability, the court could use your personal assets to satisfy the plaintiff's claim. If you own a corporation or other entity, which offers a liability "shield," then your personal liability to a claimant against the corporation or other limited liability entity is limited to only what you've invested in the company.

7. Create your boards

Your board of directors is a trust-worthy group that ensures no one charges you excessive fees or provides below-average services. Your board should consist of:

Industry experts with whom you've established a relationship. These experts could be one or more of the individuals who were kind enough to opine on the marketability of your product and/or those involved with your feasibility study.

Executive-level folks savvy in business and transaction. These people may consist of your business lawyer, folks with whom you've established relationships during your feasibility study or colleagues other members of your board could recommend.

Your scientific advisory board should consist of industry experts who serve as technology and market advisors in the ophthalmic industry. These people are frequent speakers on the trade-show and continuing-education circuit and have tight relationships with the organizations with which you are seeking to do business.

Before choosing your board members, consult your business lawyer, and conduct your own research. For instance, eHow, a Web site database containing more than 100,000 professionally written articles on a number of topics, includes "How to Form a Board of Directors" at www.ehow.com/how_138781_form-board-directors.html. Also, various books exist on this topic. The most recent: "Boards, Governance and Value Creation: The Human Side of Corporate Governance," by Morten Huse.

8. Create a prototype

A prototype is a very important step in raising capital for your invention. Yes, your feasibility data may be very strong, but investors feel too much financial risk is involved in creating the prototype themselves — it could still fail — so they prefer you take the technical risk by creating the prototype yourself.

To create a prototype, consult with both of your boards to obtain the names of reputable engineering firms that can provide you with the necessary materials and manufacturing.

9. Find investors

Once you prove the effectiveness of your invention prototype, you'll need investors, particularly when it comes to funding human trials. The typical four types of investors:

Patent Defined

A patent grants you the right to exclude others from making, using, offering for sale or selling your invention in the United States or "importing" the invention into the United States, according to the United States Patent and Trademark Office (USPTO), a federal agency that grants patents, trademarks, servicemarks and copyrights. The two types of patent applications: provisional and non-provisional. The provisional patent application merely establishes a filing date. The USPTO doesn't examine the provisional patent. After you file a provisional patent application you have one full year to file the full patent application, called a non-provisional utility patent application, while protecting your idea.
You may file provisional patent applications for utility inventions (a composition of matter, for example), but not for design inventions (a new, original and ornamental design). Some inventors file provisional patent applications because they don't want to spend money on the non-provisional patent application until they're certain their invention has a chance of being successful. Also, the cost of filing a provisional patent application is less expensive than for a non-provisional patent. Note that a provisional patent application will not mature into an issued patent unless you file a full non-provisional utility patent within the one-year time period. Visit www.uspto.gov/web/offices/ac/qs/ope/fee2007september30_2007dec17.htm for the 2008 fee schedule. (On this site, you'll notice the term "small entity." Visit www.uspto.gov/web/offices/pac/mpep/documents/appxr_1_27.htm.)
You may file non-provisional patent applications for both utility and design inventions. The term of a patent is 20 years from the date on which you file the utility patent application. If you don't pay maintenance fees after issuance of the patent, someone else can make, use, offer for sale, sell or import your invention.
To obtain a patent, your invention must be new, meaning 1) No one knew of or used the invention in this country, or patented or described it in a printed publication in this or a foreign country, before you made your invention; or 2) the invention was not patented or described in a printed publication in the United States, a foreign country or in public use or on sale in the United States more than one year before you applied for the patent. Also, your invention must sufficiently differ (be nonobvious) from what has been available or described, according to the USPTO. An example: A change in size of an already available device is usually not patentable.
If the USPTO grants your patent, either you, your patent attorney or patent agent will receive a "Notice of Allowance and Fees Due" as well as a fee for issuing the patent, and if applicable, for publishing the patent application, according to the USPTO. You have three months from the date of the notice to pay these fees. When the USPTO receives payment, they'll issue the patent as soon as possible.
The USPTO then delivers or mails the patent grant to you, your patent attorney or patent agent, if you have either. Failure to pay these fees, results in the USPTO viewing the application as abandoned, unless you can show that the delay was unintentional or unavoidable.The USPTO receives more than 350,000 patent applications per year, and the review period depends on many factors, such as the complexity of your application. To check on the status of your application, call (571) 272-4000.

Family and friends. Tread very carefully before asking family and friends for money, as business and personal relationships are often a bad mix. These people are blinded by their desire to help you succeed, which means they are unable to be dispassionate about the risks involved in becoming an investor. So, they may tell you to "pay me back when you have the money," but if your invention doesn't pan out and you're unable to pay them back, the relationship could become irreparably damaged.

Angel investors. These are individuals who aren't employees of banks, venture capital or private equity firms, who choose to invest their personal money into a private company they feel will garner them a large return on their investment. Some angel investors are retired business people, while others are affluent individuals who have management expertise.

The Cost of Invention

  • Notarization
  • Patent Lawyer
  • Provisional patent application
  • Travel (You may need to consult with experts in the field by traveling out-of-state.)
  • Feasibility study
  • Non-provisional patent applicationl
  • Business attorney
  • Setting up a business entity
  • Creating a prototype

As with venture capital and private-equity firms, angel investors are often also involved in the management, strategic marketing and planning of the companies in which they invest.

Venture capital and private equity firms. As defined by the National Venture Capital Association, these firms are pools of capital, typically organized as a limited partnership, which invest in companies that represent the opportunity for a high rate of return within five to seven years. The venture capitalist may examine several hundred investment opportunities prior to investing in only a few selected companies that it believes are winners.

Because these firms want to foster growth in these companies, they're often involved in their management, strategic marketing and planning.

Bank loan. Banks are generally reluctant to invest in start-up companies, unless your company has the support of impeccable personal credit, according to the National Business Association (www.nationalbusiness.org/nbaweb/newsletter2007/2439.htm). And, even if your credit is pristine, be prepared to reveal to the bank hard numbers instead of projections, as this is what banks often require.

One caveat when seeking investors: Consult with a business lawyer who is familiar with the federal and state securities laws and regulations. This is to ensure your plan to seek and obtain investors is on the level.

None of these steps are without their challenges. As a result, many times, you'll feel like throwing in the towel. But, if you have an idea for an ophthalmic product that no one else has developed, it's marketable (meets a significant unmet need) and works, it's most likely worth your time, effort and investment to make it available. (See "The Cost of Invention," above.) All the spoils go to the innovators who persevere. OM

Special thanks to USPTO-approved Debra Z. Anderson, Esq., of Meyer, Unkovic & Scott LLP, for reviewing the patent information in this article.

Special thanks to David L. Harnish, Esq. of Meyer, Unkovic & Scott LLP, a corporate lawyer, for reviewing this subject matter.

Dr. Glazier practices in Rockville, Md. and is the inventor on four issued patents and 13 pending U.S. patent applications. He founded Vision Solutions Technologies, Inc., a corporation to develop LiquiLens, a intraocular lens for low-vision patients. Also, he provides consulting for inventors, start-ups and early-stage ophthalmic companies. E-mail him at aglazier@youreyesite.com.


Optometric Management, Issue: February 2008