Why are patents important for product marketers? Is it worth the cost? When is the right time to start the patent process? Do you need a patent for your business? Today, we interview one of the premier patent attorneys in the United States.
Rich Goldstein of Goldstein Patent Law sat down with us and helped us better understand the patent process, and he will do the same for you! Rich has secured more than 2,000 patents over the past 25 years and is the author of the consumer guide to obtaining a patent for the American Bar Association.
In today’s episode of the Harvest Growth Podcast, we’ll cover:
You can watch the full interview here: https://youtu.be/JSeqMmCdrmY
If you think it’s time think about patenting your product, go to GoldsteinPatentLaw.com to learn more about Rich Goldstein’s business!
Do you have a brand that you’d like to launch or grow? Do you want help from a partner that has successfully launched hundreds of brands that now total over $2 billion in revenues? Visit HarvestGrowth.com to set up a free consultation.
Jon: Do you need a patent for your business? Listen to this interview with Rich Goldstein, one of the premier patent attorneys in the United States, to better understand the patent process.
Welcome to another episode of The Harvest Growth Podcast, focused on helping consumer product companies, inventors, and entrepreneurs harvest the growth potential of their product businesses. Today, I'm excited to speak with Rich Goldstein of Goldstein Patent Law. His company have secured more than 2,000 patents over the last 25 years, and interestingly enough, he's authored The Consumer Guide to Obtaining a Patent for the American Bar Association. That's pretty impressive. That's not something you can just self-publish on your own. That comes with real clout and credibility when you do something like that, so Rich clearly knows what he's talking about in the patent space.
I'm so excited to have him on the show today to answer a lot of questions that I know my listeners have in terms of getting patents, how to do it, when to do it, et cetera. We'll dive in a bunch of those questions, but Rich, first of all, welcome to the show and thank you for taking the time today.
Rich Goldstein: Yes, thanks so much, Jon. It's interesting, though, you mentioned that being asked to write the book for the American Bar Association on patents. I don't think it necessarily means that I'm the foremost expert on patents as much as they recognize that. I have a knack for being able to take this complicated patent stuff and put it into plain English and explain it to people and that's why they asked me to write the book. That's what I enjoy doing and that's why I'm really looking forward to helping your audience to better understand patents and how it works and how it could work for them.
Jon: That's a great skill to have. I think some of the best patent lawyers out there, you speak in a different language in the patent, so when you communicate, I can't understand half the language on a patent and that's different than communicating to us as [crosstalk].
Rich: It's actually based on Klingon, the language that we use as attorneys.
Jon: It sounds like it, it might as well be. [laughs] I'll first ask you, what's the funniest patent request you've ever received?
Rich: All right, well, years ago, I had a couple come into my office that asked to, well, first of all, they demonstrated their invention to me. What it was was a new method of tying shoes. It was a new way to make the knot so it doesn't come undone. It worked, it worked really well and it was clever and innovative, but immediately, the notion that came to my mind was, "How are you going to monetize this? How are you going to make money if you get people to tie the knot your way?" They didn't really have an answer for that. I think they just wanted to know that it would be recognized that they were the ones that came up with it.
We actually did a patent. It was a bit of an unusual patent in having to be able to show how this knot actually worked, but yes, I think that it was a pretty funny request. I've got another one too. This was another gentleman. This is an older gentleman, he was way in his 70s and he came in and he wanted to demonstrate his invention. Basically, what it was is, he handed me a walnut. I was like, "Okay, I've got this walnut now, what's next?" and then he handed me a nutcracker and he said, "Okay, go ahead, crack the nut."
I was like, "What's this going to be?" I cracked the nut, it basically disintegrated into eight different pieces, lots of fragments, and then just sitting in my hand, in addition to these fragments, was a condom. It was like, suddenly, I had a condom in my hand. I was like, "What's this about?" He's like, "It's a novelty, it's a joke." It's like you put it in your candy dish, and when people come to your house and they crack a nut open, it's funny." He had a unique method for getting it actually into the walnut, into a real walnut, and so we patented that. Again, it was like, he didn't really know how he's going to monetize it, but it was fun to work with him. That was one of the funnier requests.
Jon: Oh, that's funny. You and I in some ways are in a similar industry. We work so much on product launches so we both deal with inventors a lot in our businesses, sometimes very early stage, sometimes later on, and probably have lots and lots of funny stories to share. I'll share one that I find similar to really address the point that sometimes it's hard to know until you start marketing something if there truly is something there. Now if there's no way to monetize, that's a whole different story. One of the funniest stories that approached us, a product a long time ago was they came to us.
They sent us this big heavy wooden stool with a little U in the front of it and they said, "Put that in front of your toilet, you put your feet on top of it, and it puts you in a squatting position." This is now 10, 11 years ago or so. Now many of you have probably heard, in the audience, have heard of the Squatty Potty, which has become a massive success, so tens of millions of dollars, but in that first phone call with the founders of Squatty Potty, to be honest, I thought, "Who's going to do this? It just doesn't make sense to me."
Sometimes you got to take that leap, walk a couple steps forward, whether you're helping get a patent, or whether, like us, you're helping them market, or whether you are the inventor, have a little faith, move it forward, get it in the market, talk to people, and sometimes you'll be surprised how big some of these successes can be at the end of the day. I'd love to shift gears a little bit and get right into patents. I get the question all the time is, why is a patent important? If you're talking to product marketers, inventors, entrepreneurs, to them, why is a patent so important to have?
Rich: Here's the thing, it may be and it may not be. I'm going to use your Squatty Potty story as an example too, in that, there are people that will sometimes say, "Patents are so important, you need a patent. If you're going to launch a product, you'd be crazy not to get a patent first." Then there are other people that say, "No, don't bother with patents. You change one thing and you get around it. It's not worth it, don't bother with a patent." Then the question is, and what I'm hearing in your question is a bit of like, well, which of them is right? Are patents really valuable or are they not really worth your time and money? The answer is, it depends.
Some patents are very valuable and are broad and cover a whole concept. Other patents are very specific and they're not very valuable. Both of those people are right, but at different times and for different reasons. In general, the thing that ties it together is this is you can get a patent that's broad and covers a whole big new concept as long as that hasn't been done before. Most of the time there have been things that were done along those lines, maybe they never made it out to the market, but because they were done before, it limits the patent that you can get.
You can now not get a patent on the overall concept, you can get a patent on the more specific details of what you did. This is what escapes 99% of inventors, and even the ones they have a patent, they don't really understand what that patent covers. The question of whether patents are important is more a question of, well, can you protect the thing that actually matters to the marketplace? Let's talk about Squatty Potty, let's take 12 years ago, they had this notion of this product. I guess you're going to ask, shouldn't they have protected it? What it really comes down to, the hidden factor is that there are already so many different examples of things like Squatty Potty going back a hundred years.
I've seen patent searches with this of patent search results, and there was every imaginable type of like potty stool, ones that are adjustable, ones that are fixed, ones that fold, every imaginable example. By the time that Squatty Potty was talking with you and at the time at which they founded this company, they recognized that there was a big marketing need for a product like this, but they couldn't patent the concept of it. They probably could get design patents and patent on a very specific look of it so if someone really just copied it like the way it was molded in China, then they could stop that, but they can't stop people from following that concept of a stool that raises your feet.
That's the point and that's the deciding factor, is a patent valuable or not? Is, well, what type of patent can you get? Can you get one to cover this new cool concept you have or is it going to be a very specific one? The way you find that out, by the way, and I'll just wrap this up with a bow, the way you find that out is by doing research. Doing research to see what other people invented that's similar, to find the closest, what they call a prior art. Prior art are the things that came before you that are like your invention. Find the closest prior art because that's going to determine what you actually can patent, and then that will determine whether it's valuable or not.
Jon: That's great. That's a great way to put that. I would encourage those that are listening to reach out to Rich or somebody like Rich that you know is an expert in this field that has done this research in the past.
Rich: There's no one.
Jon: There's no one like Rich, that's true. [laughs] Rich or an imposter of Rich.
Rich: Seriously, what you want to do is get competent help is the point. You want to get someone who could really help you take a good look at this and figure out what's what.
Jon: Yes, and I think so often we hear like, "Oh, I can't afford it. The patent process could be $100,000, $200,000." It can be when Apple might be issuing a patent or whatever, something very complex, but it can start less expensive, and especially that early process, the patent search. Rich, can you talk to us, how do you work with people in the very early stage if they just don't even know if they need one or not and they call you up, what do you do?
Rich: In general, 90% of the time, it is a matter of what we find in the search. We call the patent evaluation where we have an initial conversation, then do research to see what the closest things are to it, and then follow up with, well, what are the opportunities here? Is there something we can patent? What would the patent focus on? We call that a patent valuation. I would say that 90% of the time, 95% of the time, it's not a matter of me looking at and say, "There's no way you can get a patent on this," it's more a matter of like, yes, it's potentially patentable, but it just depends on what exists that's like it, and it's really hard to tell without research.
I don't do consultations with clients that haven't committed to do the research because like I said, 95% of the time, it's really a matter of, for the client, are they just ready to explore that? Are they ready to dig in and find out if there is some other patent out there that is in the way? Then just the way I work because really, 95% of the time it's going to be a matter of the research is that if it happens to be that I talk with them first time and I'm like, "There's no way we could patent this," it doesn't even matter what we find in the research, then I just refund them for the whole thing. Just the way I run my business is I look to have people that are committed to the process, and then if we need to stop it, we'll stop it.
Jon: Yes, that makes sense. Sometimes in an initial glance, you can't tell, you got to go down that path a little bit to figure it out; what else is going out there, et cetera.
Rich: Yes, it's almost always going to be a matter of what else is out there. It's rare that someone will say like, "Look, well, my idea is a bottle that is infinite and you can keep drinking from it forever." I'm like, "There's no way to patent it because you can't explain how something like that would work." That's the rare case and most of the time, it's like, "My idea is for this type of bottle opener combined with a TV remote control." I guess we got to find out what other people have done related to that, which, by the way, that was my idea. I had an idea like that years ago. I didn't patent it, but I did find out that other people had that idea before me.
Jon: How interesting, okay. If you got invention approaches here, when is the right time for them to talk to you to start the patent process? When is it too early, too late?
Rich: First of all, too late comes when you've already made the invention public. You immediately lose the rights in most of the world, and then the US, if it's been public for more than a year, then you've lost the right to apply for a patent. That's not even a matter of if someone else beats you to the patent office, that's just your own action of making it public causes the law to eliminate your possibility of getting a patent. That's when it's too late and that happens way too often.
Jon: Can I ask you just to clarify one thing? What do you mean by made public? Does that mean brought to market to sell, share with your neighbor? What does that mean?
Rich: I mean, in general, the most basic things that would make it public is you have a website that talks about your invention, or there's an article, a magazine article or an online article or you put it for sale, you put it up on a website to sell it. Those type of actions make it public, and like I said, in most of the world, then it's game over. In the US, we still have a one-year grace period under the right circumstances, so that's when it's too late. Now, in general, I think the only thing that makes it too early to even consider whether you should be patenting something is if you've got a concept that isn't yet really patentable.
Like you're saying, "I want to have a better soap dispenser for dishwashing soap. The problem is that it's always gumming up, and so I want to have something that dispenses but there's no opportunity for it to gum up" or what have you. That's not really an invention yet, that's too early. That's you've identified a marketing goal, you've identified a niche. When you come up with a cleverer solution and you're like, "You know what? It's going to work because if you have this type of dispenser where it's vacuum-sealed at the bottom and it's got a lever at the top where you can then urge a certain amount of material into a cup." You have a solution in mind, then would be the time to explore whether it's patentable.
Because if the concept that you have is unique, then you can patent more of that concept, and sometimes what happens is then as people develop the product, they might file additional patents and that's why you see products often that have multiple patent numbers on them. They filed an initial application to go for the overall concept, and then as they developed it, brought it to market, or even brought their second version to market, they had some improvements that were themselves worthy of patenting, and so they pursued those as well.
Jon: Love it. I have to say, not all law and not all lawyers are boring as Rich as a great example of.
Rich: Not all boring as Rich, right?
Jon: Yes, right. No, what I'm saying is, as you can tell with Rich's personality, as I find with patent attorneys, it's a whole different side law. I'm a former public accountant, so the boring CPA, you think I change into being a marketer. I'm a better fit there, but the fun side of law I think is patent law. It's because it's the type of work you do can be so creative. It tends to bring more really interesting people, I think. I love having conversation with patent attorneys. I want to ask you, what's your favorite story to share about from your past about a patent that has helped one of your clients?
Rich: There's been so many different clients and stories it's all a blur, but one thing that comes to mind is I had a client a couple of decades ago that came to me with the idea of how he would attach advertisements onto the side of Porta Potties. He had more than just the idea of an advertisement on a Porta Potty which is not patentable. He had some cool bracketing systems that worked the way that existing Porta Potties were configured. It was a cool solution for being able to attach these advertising cards that you bend a little bit and pop them into the frame.
We did a bunch of patents for that and he had this vision of Porta Potties with advertisements on them at sporting events and NASCAR and all of that. Apparently, he was right and a much larger corporation came along and bought him out. The patents made a big difference in that, it increased the multiple that he was paid for it. As best as I knew, it resulted in millions of additional valuation for him. Essentially, it was the fact that the patents created a high multiple of-- Just to get into the way it worked with acquisitions is typically you have a business, it's got a certain amount of profit, and then when someone goes to buy the business, they're going to pay you a multiple on that profit.
If you're making $250,000 a year and maybe you get a six-times multiple, which would mean you get $1.5 million for the business. If you could stretch that multiple, which often is the case through IP, then you get that much more and I've almost never seen a case where someone sold their business and they didn't get a huge return on investment, on the money they spent on IP. It's often debatable during the operation of the company, it's like, "I'm running the business and I'm selling a certain amount of product, I have a certain amount of expenses and a certain amount of profit, was it worth it to get the patent?
Because did it really save me from losing revenue to this many other competitors?" and blah, blah, blah. That's usually how people look at it, but it's often more that if they get all the way to exit, there's almost no way to not get an ROI impact. Even bad patents you'll get an ROI on.
Jon: Yes, and I've seen this many times in the product space especially, where the multiple is definitely a benefit. You'll sell your company for more because of the IP attached to it, but you also may never even get the offer for an acquisition. If you're a single product or only have a few products in a company, you've got bigger competitors. If you're not protected from an IP standpoint, it might be easier to go around you, make something similar and start to market, as opposed to when they're restricted from doing that, obviously, through IP.
Rich: Yes, absolutely. If there's no IP, then alongside the possibility of them buying you a company for a certain amount of money, the question they're asking themselves is, "What would it take us to start and build a company to the same level as yours is? Then we don't need to buy your company." If they're going to pay you a million and a half, but there's no IP and there's nothing preventing them from entering the market and they realize, "You know what? For $500,000, we could launch a product, run some Facebook ads, get to the same level of customers and sales that you have," then they're not going to pay a $1.5 million and for your company, maybe they'll offer you $400,000 or not be interested at all.
Jon: Good point. I think this interview is a great resource for a lot of our listeners to help them understand what to do in terms of patents because of your expertise in patent law, but at the same time, you're also a business owner, so you share that with a lot of our listeners as well. I want to ask you, are there any resources that you recommend whether not it has to do with patents or running a business or motivation or whatever, what has been helpful to you in your business life?
Rich: I've got a great one for that. A recommendation on a book called The Road Less Stupid by Keith Cunningham. Keith actually was in a mastermind group that I've been in, but it's a fantastic book and the premise of the book is that if you take some of the most successful people in the world and you ask them, "What are two things that if you had done differently you would've been worth a hundred times what you're worth today or been that much more successful?" and they would immediately have an answer for you. We've all made mistakes in business, we've all made big mistakes, and so the point of The Road Less Stupid is to make less of those big mistakes.
It's a book, I think it's about 30, 35 chapters and he goes into every aspect of running a business and marketing a business and running your team and et cetera. It's a fantastic read. I know a lot of high-level business people that swear by this book, The Road Less Stupid by Keith Cunningham.
Jon: Love it, I'll check that out. Thank you so much for sharing. Rich, is there anything I haven't asked you that you think would be helpful for our audience?
Rich: I don't think so. I think really the thing is, anything that you heard on this podcast, anything about IP I think helps because to me, for most entrepreneurs, IP may be the thing that you know the least about that could have the biggest benefit or biggest impact on your business if you just knew more. My suggestion is just to learn more about IP.
Jon: Love it. One way to do that is by visiting Rich's website, goldsteinpatentlaw.com and we'll put the spelling of that, the URL in the show notes. If you're listening while you drive or you don't have the chance right now to write that down, please go to the show notes for this podcast. Again, goldsteinpatentlaw.com, you'll find a lot more information about patents. It's a great website, lots of information on there, and contact information to reach out directly to Rich and his team if you have specific questions about your business. Rich, thank you so much for the show.
I will say for the listeners, please go to goldsteinpatentlaw.com to learn more, but be sure to check out harvestgrowthpodcast.com to see this and other episodes we've recorded. If you like this episode, you want to learn how you can profitably grow your consumer products business, please subscribe to our show and leave us a review at iTunes or Google Play.