A Resource Tool for Businesses and Inventors Prepared by the Small Business and Technology Development Center (SBTDC), a business development service of The University of North Carolina system operated in partnership with the US Small Business Administration (SBA). This publication is provided by the North Carolina Small Business and Technology Development Center. It is intended for the independent inventor or small company with little knowledge of how to develop new ideas into licensable patents or commercial products. In this guide, we try to answer the most common questions and provide guidance on commercializing an invention. In addition, this guide includes information about trademarks and copyrights. Editor: Shayne E. O’Reilly SBTDC Spring Extern (2006) The University of North Carolina School of Law Edited by: John A. Craichy Scott Daugherty Ron Ilinitch Published by: University of North Carolina Press, Copyright © 2006 Small Business and Technology Development Center; all rights reserved. This booklet is designed to provide useful information and is provided to the reader with the understanding that neither the author, editors, nor the publisher is engaged in rendering paid legal, financial, or professional advice. If such expert assistance is required, the services of a competent professional should be sought. The information provided does not constitute specific recommendations to be used for decision-making purposes by the individual reader. This work is partially supported by the U.S. Small Business Administration through Cooperative Agreement #SB-2M-00110-15. Any options, findings, conclusions, or recommendations expressed in this publication are those of the author and do not necessarily reflect the views of the U.S. Small Business Administration. 2 Introduction .....................................................................................................................…. 5 1. General Patent Information .......................................................................................... 6 What is a patent ........................................................................................................………….. 6 Patent contents ........................................................................................................………….. 6 Obtaining a Patent ........................................................................................................………….. 7 Conditions for a patent .......................................................................................................... 7 Who may obtain a patent ........................................................................................………….. 8 When a patent may be obtained .......................................................................................... 8 Ownership and sale of patent rights .....................................................................…………..... 8 2. Determining Whether to Patent ......................................................................................... 9 Perform a patent search ......................................................................................................... 9 Will your invention sell?...............................................................................................…….......... 10 Evaluate marketability ......................................................................................................... 11 Confidential Disclosure Agreements ......................................................................................... 12 Protecting the invention while assessing marketability ............................................………. 12 3. Pursuing a Patent .......................................................................................................... 15 Retain a patent attorney/agent .......................................................................................…………... 15 Drawings .............................................................................................................…………............. 15 Reduce idea to practice: Prototypes .......................................................................…………... 15 Product testing .......................................................................................................…………... 16 Filing the patent application .......................................................................................…………... 17 Process at the Patent and Trademark Office .......................................................................... 17 Estimated patent costs and time .......................................................................................... 18 Funding a patent ........................................................................................................………….. 18 Enforcing patent rights ........................................................................................................... 18 What to do after getting a patent ........................................................................................... 19 4. Patent Assignments & Licensing Agreements ...................……………………......... 20 What is a patent assignment? ........................................................................................………….... 20 What is a license? .......................................................................................................…………..... 20 Pros and cons ........................................................................................................................... 20 Selecting the right licensee ......................................................................................…………..... 20 Contacting the company ........................................................................................................... 21 Initial presentation .......................................................................................................………….... 21 Negotiating the license agreement ........................................................................................... 21 What to expect after signing ........................................................................................…………... 22 5. Starting Your Own Business .............................................……………………............. 23 Start-up capital ........................................................................................................................... 23 Marketing Issues …………........................................................................................................... 23 The Internet ............................................................………............……............................... 23 Registration and Licensing……………………………………..…………………………………. 24 Other considerations ………………………………………………………………………….. 24 6. Financial and Market Research ……….......................................................................... 25 Marketing research ..........................................................…………................................................. 25 Financial research ..........................................................…………...........................................….. 26 Analyzing the results ........................................................................................................... 26 3 7. Trademarks & Copyrights .............................................……………………............. 27 Trademarks ..........................................................…………................................................. 27 Trademark notice ..........................................................…………...........................................….. 27 Trademark benefits ...................................................................................................................... 27 Trademark benefits ...................................................................................................................... 27 State v. Federal trademarks ..........................................................…………................................. 27 Length of trademark protection ......................................................…………............................... 27 Selecting a trademark ........................................................................................................... 28 Trademark registration requirements ...............................................…………............................... 28 Trademark search ......................................................…………...........................................….. 28 Estimate trademark costs ............................................................................................................ 29 Applying for trademark registration ....................................................………….......................... 29 Copyright protection ..........................................................………….................................. 30 Copyright notices .................................................................................................................... 30 Copyright ownership .....................................................…………................................................ 31 Copyright endurance .....................................................…………...........................................…. 31 Obtaining copyright protection ............................................................................................. 31 8. Invention Promotion Firms ...........................................................................................