Nathan to speak at Arkansas Trial Lawyers annual meeting

I will be presenting a CLE at the Annual Meeting of the Arkansas Trial Lawyers Association in Eureka Springs, which is from May 2–4, 2012. My topic will be "Presenting Objective Evidence of Injury." It will touch on topics like digitized x-rays, CRMA, the American Medical Association's Guides to the Evaulation of Permanent Impairment, and tips for dealing with junk science invented by insurance companies in the 1990's as a cover to deny claims. Hope to see you there!

Ways to protect yourself while marketing new ideas

Last Monday, I posted on the types of things individual inventors need to consider when thinking about investing in a patent on a new idea. The gist of the article was that patents aren’t a way to easy money — rather, patents create a protectible property interest ripe for investment. So, once an inventor decides to move forward with patenting an invention, what are the options? Here they are, in order from most risky to least risky:

Option 1 — Test market first, then patent

This option involves talking to people in the industry about your idea before seeking patent protection. Your goal is to find out if there are any potential investors/purchasers for your idea before you invest much money. The risks here include: (1) public disclosure of your idea starts a 1-year clock ticking for you to file a patent application, and if you don’t, you cannot get a patent; and (2) industry insiders could take your idea and run with it, and you would face an uphill battle proving it was your idea in court. This is the most risky option because it provides no protection whatsoever.

Option 2 — Nondisclosure agreement

This option is similar to step 1, except that you ask the potential investor/purchaser to sign a nondisclosure agreement (NDAs) before you tell them what your idea is. In the abstract, this option makes it less likely that a third party would steal your idea. However, practically speaking, you might still have to prove what you disclosed to industry insiders and that they did not already know what you disclosed to them. Many companies are unwilling to sign NDAs for unsolicited idea submissions, in part due to these proof issues. This is a reasonable option for inventors who have already identified serious potential “angel” investors (that is, investors who are not in the same field and thus have little incentive to steal the idea) or have existing partnerships with trusted associates.

Option 3 — Patent pending

The patent pending option means that you begin marketing as soon as you file a patent application. This option allows you to prove what you’ve invented to interested parties, since you’ve already submitted your idea to the patent office and have received a dated confirmation. It also avoids complications about when you disclosed your idea to the public vs. when you filed your patent application. For these reasons, the patent pending option shows that you are serious about your invention and what it takes to protect it. The downside is primarily the cost of getting a patent application on file. This option is the one taken by most of my individual inventor clients, as it represents a good balance between the risk of theft by a third party and getting your product onto the market (and making money) as soon as possible.

Option 4 — Full patent protection

The final option, securing full patent protection before marketing your product, is the least risky. It means that others will not know about your product until it is already patented. Under this situation, a potential thief of your idea would be on notice of the patent and would be subject to additional penalties in a civil patent case for stealing your idea. Most of the time, when I see this approach, it is from existing businesses whose R&D departments are coming up with ideas that are several years from production.

Nathan selected to The National Trial Lawyers' Top 40 under 40

Nathan was recently named to the Top 40 Under 40 by the National Trial Lawyers. This group is a "professional organization comprised of America’s top young trial attorneys. Membership into The National Trial Lawyers Association: Top 40 under 40 is by invitation only and is extended exclusively to those individuals who exemplify superior qualifications, trial results, and leadership as a young lawyer under the age of 40. Selection is based on a thorough multi-phase process which includes peer nominations combined with third-party research. The result is a credible, comprehensive and impressive list of young attorneys chosen to represent their state. 

"The Top 40 under 40 is restricted to only 40 attorneys per state per year and each attorney must be under the age of 40 as of January 1, 2012. Attorneys must also specialize in the areas of civil plaintiff or criminal defense law. Each candidate must also be in good standing with the state licensing board and must never have been subject to disciplinary action."

Individual inventors: clearing the hurdles

When we watch politicians talk about what makes America great, they often say something about American ingenuity. One example that easily comes to mind is Steve Jobs and Steve Wozniak making the first Apple computer in a garage. Now, Apple is the most valuable tech company in the world.

I get lots of calls from individuals who have an idea for a great new product or service and are looking to take the next step. Lots of these folks have different day jobs and are just looking to sell the idea. What hurdles do they face?

The first hurdle many people face with their idea is it is just that: an idea. This is one of the most common misconceptions about patents — patents protect inventions, not ideas. You have to describe an actual physical product or service in a patent application. That is, you have to know all the components it will take to build the invention and what the function of each component is. A person without a clear picture of how to make a product out of the idea doesn’t have enough information to get a patent.

The second hurdle is that many companies aren’t willing to invest in a new idea unless one of two things happens. First, you can sign a complete release letting them use your idea without paying you anything. This is like sending an email to your favorite software company and asking them to put a new feature in the next version of their software. They may do it, but you would have no claim to any money from the feature.

The second thing companies look for is a patent. Not a patent pending, but an actual patent. But why? A patent pending is not a guarantee that the government will grant a patent. Without a patent, the company would have nothing to protect the idea from copying by others. A company could hire a patent attorney to look at the pending patent application, but this requires a pretty significant cost, and many companies would rather let the individual get the patent first.

The third hurdle is that patents take a while to obtain and, for individuals who are pursuing one outside of a routine business research and development budget, they are also fairly expensive. However, the hard cost of a patent is small compared to the investment of time and money it takes to market a successful product. In order to get a company to buy a patent, an inventor needs to be prepared to make prototypes, go to trade shows, and pitch the product to as many people in the industry as possible.

Like any good investment, a patent is a long-term project that requires patience. It also requires lots of hard work. For people with good ideas and a clear marketing plan, a patent can be a great way to start a new business or to expand an existing one.

Report: Malpractice lawsuits don't drive high healthcare costs, administrative costs of insurance do

A recent Washington Post article summarized a new report from the International Federation of Health Plans on healthcare prices. The report concluded that prices are "far higher in the United States than anywhere else." Here were the things that caused prices to be so much higher:

• 21% of excess spending was caused by high administrative costs (underwriting, sales, and marketing), mostly by private insurance companies
• Preventable medical errors are higher in the United States than in any other developed country except Switzerland and New Zealand
• The United States badly trails Canada, Japan, Germany, Britain, France, Brazil, India, and China on 19 measures of health value scores, meaning that our citizens are generally unhealthier than those in other countries

One thing the article addressed was the effect of medical malpractice lawsuits on total U.S. healthcare costs. Fear of lawsuits is often cited as a reason healthcare costs are so high. However, according to the Congressional Budget Office:

• Aggressive reforms to the medical malpractice system "would reduce total national health care spending by about 0.5 percent." That's one-half of one percent, or fifty cents out of a hundred dollars.

No one likes high healthcare costs. However, in order to reign in those high costs, it seems like we should pick all the low-hanging fruit possible. If private insurers are soaking up nearly a quarter of the cost increases through high administrative costs, then their administrative processes should be streamlined or eliminated.