FORTUNE Small Business:

How patenting protects your inventions

An entrepreneur checks in with Ask FSB's experts for ideas on protecting his creation from rivals with deeper pockets.

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(FORTUNE Small Business) -- Dear FSB: How does one with limited funds go about moving an idea into the mainstream without risking it being stolen by a large entity with staff counsel and other lawyers capable of litigating the matter ad infinitum?

- Paul in Harrisburg, Pa.

Dear Paul: According to Stephen Gass, president of SawStop LLC and inventor of its flagship product, the safety-equipped SawStop cabinet saw, you have two options: keep it secret or patent it.

"There is no great and cheap way to protect ideas," says Gass, who has had more than 25 patents issued for the SawStop since 1999. Gass is also a patent attorney, although he no longer practices.

The first and cheapest option is to keep your idea confidential while you develop it for the marketplace. This means you can share your idea only with people who have signed a non-disclosure agreement (NDA)

But there are major disadvantages and risks to this strategy.

It can be hard to get business partners, such as manufacturers, to work with you under an NDA. In fact, according to Gass, some large companies will only deal with inventors once they have signed a contract declaring that none of the information shared with the company is confidential, and asserting that the only protection the inventor will have is through a patent, which the creator would be responsible for filing.

Without patent protection, you run the risk that someone else will come up with the same idea independently, file a patent application, and end up with more rights over the invention than you.

Gass suggests that the $10,000 to $20,000 required in filing and attorney fees for a patent application for a modestly complex invention is a good investment.

"It's a better way to go because it defines your rights with precision," he says. "Your priority of rights are protected by having a patent application on file, and often it can be the only way you can get larger corporate entities to look at your product."

Once you disclose your idea - by telling anyone who has not signed a confidentiality agreement, for example, or by making it available in the marketplace - you still have one year to file a U.S. patent application, should you choose to.

But beware: Brent E. Routman, an intellectual property lawyer at Merchant & Gould and also an inventor himself, warns that this one-year grace period only exists in the U.S. and Canada. Making the most of it by taking the full year for deliberation would potentially result in you losing foreign patent rights

That's because the patent systems of many large, industrialized countries, including a number of European nations, have "absolute novelty" laws. Once the idea enters the public realm in any way - which can include any communication not covered by a non-disclosure agreement - it is no longer considered a new invention and therefore cannot benefit from patent protection in those countries.  To top of page

Crushing copycats: An owner explains how Built NY uses its patent and trademark registrations to fend off rivals

How do you protect your intellectural property? Join our discussion.
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