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Inventors need more than just a good idea

You’ve got an invention. So what?

You’ve got a patent. Big deal.

Neither is enough to create a viable business, let alone a profitable one. That’s the hard truth California attorneys Ardelle St. George and Don Carnegie try to explain when an eager inventor approaches them for help in applying for a patent.

By Jan Norman
The Orange County Register
The Seattle Times

Sure, the pair could file the paperwork that would allow the inventor to apply for a patent, but they prefer to help these creators build something more.

"We try to get them to expand their understanding," St. George said. "Their intellectual property is just another asset for building a company. It’s not the company by itself."

A business may be founded on an invention, but it also requires skilled management, financing, positioning in the marketplace, building a successful brand and more.

St. George is an intellectual-property specialist; Carnegie is a registered patent attorney and former engineer. Both earned MBA degrees and corporate experience before setting up their own legal shop. Their clients range from creative newcomers to major corporations with a roomful of patents.

A common problem for the newcomers, Carnegie said, is that they tend to underestimate the value of a strong management team in creating a company that will outlast a fad. The management attracts the money, he explains.

Few inventors have enough cash to get their inventions to market and profitability by themselves. And investors are notoriously tight-fisted.

Professional investors want to see a strong management team and a strategy for building a sustainable business, not just one product, Carnegie and St. George agree.

A good management team may also be able to attract strategic partners, which can lead to all sorts of creative revenue boosts, from licensing a particular idea to giving equity instead of cash payments to a manufacturer that can mass-produce the product.

"No one formula fits every client," St. George said. "It doesn’t help them if we build a grand legal strategy if they don’t have the money to carry it through."

A good management team will also understand the necessity for establishing policies and procedures to protect a company’s ideas as trade secrets, Carnegie said.

Even in the early stages, the inventor needs to list and track what competitors are doing, St. George said. Too many startups think they’re the only inventor in the field, only to find out after spending all their money that others are far ahead of them.

Because startups lack the financial and human resources to develop every good idea they may have, the attorneys encourage these smaller firms to concentrate on one area and build a family of patents that will successfully repel competitors.

St. George and Carnegie also encourage their startup clients to think long term.

"If they say they’re never going into foreign markets, we have to question that very hard," St. George said. "They might disclose something here because of our more-protective patent laws that will (undermine) their foreign rights," which they might later want to pursue.

The pair also wants to work with startups early in the business-building process to develop their branding strategy.

"They get more hung up on the name than the invention," Carnegie said. "We like to help them before they get attached and then have to change it all."

Copyright © 2003 The Seattle Times Company

http://seattletimes.nwsource.com/html/businesstechnology/134688731_inventions04.html

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