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Very Early Stage Technology Investing

Archive for the ‘Patents’ Category

Trust no one, get nowhere…

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I came across a story in the local paper this weekend about an inventor in Indiana who is suing Clorox and Bird’s Eye for “stealing his idea”.  His idea is a microwaveable container that uses steam to cook/heat frozen foods.  The story, from the Indianapolis Star, only reinforces the fears that many entrepreneurs feel about sharing their ideas with investors or big companies.

These fears are sometimes justified, as companies can undermine legimate claims and tie up inventors for years.  The movie “Flash of Genius” tells the story of Robert Kearns, inventor of the intermittent windshield wiper, who spent his entire life enforcing his patent claims against the auto industry.  By the time he triumphed in the 90’s, he had spent 30 years enforcing his claims, not always with success.  He spent $10 million on legal fees and eventually won about $30 million in damages.  But he died less than a decade after his legal victory.

Kearns was a victim, but sometimes the “inventor” is mistaken about the validity of their claims.  In the Indiana case the most telling aspect is that the inventor is not suing the companies for patent infringement, but rather for beach of contract for violating confidentiality agreements and unjust enrichment.  It is hard to imagine that these companies, involved in the packaged food industry for decades, did not have a variety of research ongoing into how to improve microwave meals.

Occasionally we hear from an inventor or founder who is overly concerned about protecting an idea or concept.  It is a legitimate concern, and anyone going down the inventor/founder path should have a basic understanding of how intellectual property law applies to their field of endeavor.  But at some point the kimono must open enough for judgments to be made.  Ideas that are properly protected are nearly impossible to steal.

Many early stage companies fear that venture capitalists are going to steal their idea.  Even the best ideas are hardly worth stealing, since the thief would lack the individual insight and creativity that led to the idea/business concept.  It is the rare idea that is really not being considered or advanced in some way by someone else at the same time.  How many search engines preceeded Google?  How many cell-phones preceeded the iPhone?  Execution and fate are often more important to winning than novelty.

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Written by Mike Venerable

September 2, 2009 at 9:00 am