Tag Archive: contracts

Patent Upending: What Small Businesses Need to Know About Recent Patent Law Changes

Patent Upending: What Small Businesses Need to Know About Recent Patent Law Changes
By Sherron Lumley.

Vast changes to U.S. patent law—the most sweeping since 1952—are rolling into effect through 2013, and for small business owners and inventors with patents, it’s time to get in the know. The U.S. Patent and Trademark Office is working under a new law, called the America Invents Act of 2011 (AIA). It was signed into law on September 16, 2011, with some elements taking effect immediately and others being phased in over an 18-month period.
PQ_PatentUpending.jpgGet that patent filed

John Boyd is a patent attorney in New York and he also holds five patents himself that he sold to Apple in 2010. Historically, the first-to-invent system relied on various methods to prove the date of the invention. “This is no longer the case,” says Boyd, a partner at Rimon Law PC in New York. “Now it’s whoever files first, and this harmonizes us with international law,” he says.

Indeed, getting the U.S. in line with the times was a key motivator behind the patent law reform, seen by many technology firms as long overdue. Supporters of the new law included the likes of 3M, Apple, Dell, eBay, Facebook, General Electric, Google, IBM and the Small Business & Entrepreneurship Council representing more than 100,000 members.

“There’s been a lot of concern in the small business world about the changes to patent law,” says Boyd. As an inventor and an attorney, he is not only interested in the current law changes, but can see the pros and cons clearly from different perspectives.

The core AIA change to patent law is to do away with the old system that gave preference to first-to-invent dates and adopt the international standard of first-to-file. This means for all patent applications having a filing date on or after March 16, 2013, the new patent law takes effect and the first person or entity to file will be granted the patent regardless of who can prove they invented it first.
What’s to like in the new law for small businesses

Judith Szepesi has been a patent attorney for 15 years and is a partner at Blakely Sokoloff Taylor & Zafman LLP in Sunnyvale, Calif., in the heart of Silicon Valley. She works primarily with start-ups and small businesses and focuses on intellectual property protection in the software, hardware, security, and telecommunications industries. And for fun, “I do write the occasional bicycle seat, manual toy, or other mechanical device patent,” she notes.

Szepesi follows patent law carefully for her clients large and small, and points to one piece of good news for small businesses. The AIA has added a micro-entity status for very small inventors with no more than four patents (not including those assigned to an employer) and with gross income of less than triple the national median household income. Although a 15 percent patent fee increase went into effect with the new law on September 16, 2011, Szepesi says a file fee reduction of 75 percent is on the way for micro-entities, pending further definition by the fee setting authority of the U.S. Patent and Trade Office.

One part of the AIA law that has already gone into effect—which, according to Szepesi, can be an key advantage to small inventors—is that the Patent Office now permits virtual marking of products. “Previously, whenever a new patent was issued or a patent expired you would need to change your packaging to reflect the updated patent coverage,” she explains. “Under virtual marking, the product can be marked with a URL (such as the company’s website) and the company can simply update the website when patent coverage changes.” This can be a big plus for a small manufacturing company, as they would no longer have to spend money reworking or buying all new dies when their patent coverage changes.
Potential concerns

Some in the patent industry, however, worry that the impact of this patent reform might weaken the rights of patentees and, as a result, patents owned by startup companies, research institutions, and solo inventors might be easily encroached upon by large corporations. Alexander Poltorak, CEO of General Patent Corporation and founder of the American Innovators for Patent Reform, suggests small inventors and small business owners have their patent attorneys regularly review their current inventions to determine which will require patent protection, and then file a provisional application as soon as possible under the new first-to-file law. And if a small business does suspect a patent infringement Poltorak says it’s imperative to hire a good patent attorney who is experienced in litigation.
Additional links from the U.S. Patent and Trademark Office

AIA timeline and effective dates

Independent Inventors Newsletter

Patent Forms (web-file)

Inventor Resources

Scam prevention

For more information regarding specific patent law changes and potential impacts to your business, you should consult an experienced patent attorney.

Get ‘Em Back: Tactics for Reclaiming Lost Customers

by Iris Dorbian.

When the economy nosedived in 2008, Jeff Weiner, president of Uniondale, New York-based HKM Insurance, felt an immediate effect. Because many of his clients were laying off employees, his 30-year-old firm snagged fewer premiums, leading to fewer commissions for his full-time staff of four. As the recession dragged on and customers cut back or left altogether, Weiner’s business experienced two straight years of tough times financially.

“Learning how to manage that sinking feeling that occurs when a major account says good-bye is a milestone for anyone,” write Jill Griffin and Michael Lowenstein in their 2001 book, “Customer Winback: How to Recapture Lost Customers and Keep Them Loyal.” Written at the onset of the last recession, the book makes clear that, after each customer departure, a business faces a stark choice. “You can give in to the disappointment and despair and purge that lost customer from your data files, thereby ensuring that the customer is gone forever. Or you can get focused on the necessary steps to win back that customer.”

PQ_GetemBack.jpgAs the economy continues to recover from the downturn, some small business entrepreneurs are finding that their road back to success involves tracking down lost customers and wooing them all over again. To do so, however, they must be even more resourceful and enterprising than before.

Reposition your sales proposition

For Weiner, his insurance company’s slide finally stopped when he was able to change his customer’s perceptions about what it had to offer.

“I had to reinvent myself because a lot of people knew me as the health insurance guy,” says Weiner. “I had to expand to new products.” In the wake of the economic downturn, Weiner beefed up his company’s offerings to include life insurance, long-term care insurance and other options. By early 2010, he says his profits started to rebound.

But he didn’t stop there. To stay abreast of what former clients were up to and what others in his industry were experiencing, he fell back on a tried-and-true tactic: He networked.

Schmoozing beats losing

Right around the time his company started its comeback, Weiner started a networking group in Westbury, Long Island, composed of a dozen small business entrepreneurs. (Membership is currently up to 250). Meeting for lunch a few times a week, members briefly discuss their companies and current needs while also exchanging business ideas, referrals, and opportunities. Not only have these casual confabs helped Weiner’s business accelerate its recovery—since its nadir in 2010, HKM’s revenues have grown 25 percent—they’ve reaped handsome dividends for other members as well.

“We had a marketing guy get his single biggest client in 25 years at a session,” says Weiner.

Networking certainly did the trick for Alan Winnikoff, co-principal of the small New York-based boutique PR firm, Sayles and Winnikoff Communications. The nearly 10-year-old company, which employs a full-time staff of six, caters to clients in the so-called glamor sectors—the arts, media, and entertainment—as well as nonprofits and start-ups. After the recession hit in 2008, Winnikoff also experienced a slump, although due to contractual agreements with clients, it was delayed.

“We thought we were getting though it,” he says. “We were able to tap into digital start-ups and, for awhile, we had that but then it stopped. We got hit the worst starting in fall of 2010 for about a year. We’re just coming out of it now; 2011 was our most difficult year in terms of billing.”

Like Weiner, Winnikoff sought to remedy his company’s lost earnings by reaching out to former clients who had either moved on to different jobs or launched new businesses during the recession.

“We had a client who was a president at a major media company,” he recounts. “But in the summer of 2008, that company cut back. We lost them at that point and then this client—we’ll call her Madame X—she left about a year later.” After her departure, Winnikoff made a point of reaching out. Over lunch, the two reconnected and when she later started work at another firm, the ongoing relationship paid off. “They hired us on her recommendation,” he explains. “She introduced me to other people, which led us to more opportunities.”

Less Money Now, More Money Later

Sometimes keeping or winning back a lost customer means accepting leaner profits in the short-term. And while this advice might sound counterintuitive or even self-destructive in an economy that remains precarious, it can reap lucrative long-term dividends.

“We have a client that’s a TV production company,” explains Winnikoff. “They do great work, but in fall 2010, they told us, ‘We’re shutting down for December and going to put you on hiatus for a month and then hire you back for January.’ They did, but they also cut our fee.”

After the move, Winnikoff reflected on his options, trying to gauge the long-term value of the relationship. “I decided to stay with them even though we’re doing the same amount of work for less money,” he explains. To Winnikoff, the tradeoff was worth it, as the decrease in revenue didn’t outweigh the risk of losing the client—and the prospect of more lucrative work in the future—forever.

In their book “Customer Winback,” authors Griffin and Lowenstein try to put this strategy in financial context. Using as an example a customer that regularly spends $200 a month, they estimate that full impact of losing that client, which includes bad word-of-mouth advertising and missed opportunity costs as well as the direct revenue loss, could total up to a staggering $432,000 over 10 years.

Speak Your Way to Client’s Hearts

Another tactic that can drum up business and reclaim former customers involves public speaking. Even if you’re not comfortable with speaking to groups, it’s important to “put yourself out of your comfort zone and try something new, something different to market yourself,” explains Erica Prince, founder and president of The Professional Speaker’s Bureau based in Roslyn, New York. “Don’t be so complacent. Force yourself. Get a topic you’re super knowledgeable about and the comfort level with come.”

Prince, whose company has been around since 1995, says that entrepreneurs who make public speaking engagements part of their marketing arsenal can end up getting better returns on their investment than if they bought print advertising. “If you’re an expert [in a specific area], that’s good,” she says. “That will get you the clients that another person who’s not speaking won’t get.”

And getting more clients—whether they be of the new or long lost variety—is what growing a small business is all about. As someone who’s seen his ongoing customer reclamation efforts pay off handsomely, Winnikoff couldn’t agree more: “I’m very optimistic about 2012.”