Business Startup Advice

OK - I have an idea for a product. I can’t tell you what it is right now - because I don’t have a patent for it yet. But in general terms, it’s along the lines of a giant foam finger, or a penant, or a car flag - it’s basically a product which will be customized to specific sports teams and will be marketed to college alumni and sports fans (college and pro). It doesn’t do anything (won’t fulfill an existing need) - it will just serve as a way for people to display their support for their favorite team. For the purpose of this thread - the specifics of the product aren’t really important. Just know that it will require some product design, licensing agreements, manufacturing, distribution, sales, etc.

Now, after sitting on the idea for ~10 years, my wife and I are finally ready to pursue this idea further. We both have MBAs. She has 15 years of work experience, primarily in sales. I have 15+ years of business experience and am a consultant to the Government (cost engineering). So we both have pretty good understandings of the basics of business and what it will take.

But we’ve never started a company or manufactured anything, etc. So does anyone have any similar experience. For example, I’m pretty confident that getting a patent is very high on our to-do list. We can’t talk with designers or manufacturers or look into licenses very far unless we have patent protection. But what type of patent do we need? Should we incorporate first? Should we incorporate at all - or just try to sell / license our idea to an established manufacturer with existing distribution chanels? If we incorporate - any suggestions on what type (S, LLC, etc.)? Obviously - we need to develop a business plan too.

We are both researching this and learning a lot. But any advice would be greatly appreciated. Also - any advice on good resources would be great as well. We’ve found that our local city has some good resources, as does my wifes alma matter. But any other good resources we should check out?

Service Corps of Retired Executives (SCORE) is a nonprofit that sometimes offers volunteer consulting to people who are starting businesses.

One thing you can do is get a provisional patent first. You can lookup more about that. It is an early filing of a patent that establishes the filing date. You have a year to finish the patent application. The provisional patent will give you some protection as you start investigating.

Go to a China manufacturing site like www.alibaba.com and find a manufacturer for your product. Talk with them to get an idea of what it will cost to manufacture.

Talk with the manager of stores where they sell that type of sports merchandise and get their opinion of your idea. Your provisional patent will protect you from the unlikely chance that they try to steal the idea.

You can likely create a first run of your product for less than the cost of getting a patent. Create a prototype and talk to stores about selling it there in a test marketing effort. You may need to set the wholesale price very low or free.

One thing to remember is that a patent doesn’t really offer you a lot of protection. It means you can sue somebody, but it doesn’t prevent someone from ripping you off. There are thousands of China factories who will be glad to manufacturer whatever someone wants no matter if they hold the patent or not. And you’d have to think about how patentable your device is. The foam finger, pendant, and car flag aren’t really patentable. If your device is in that vein, you may not have any luck.

One thing you can do is to try to name the device something unique so that it’s known by that. So instead of calling it a foam finger, call it the Kibernator. Then everyone would know to get a Kibernator. Like the way people want Crocs. People don’t say they want some rubber shoes. They say they want Crocs. That name brand is worth more than the patent.

Thanks for all the input. I checked with my wife and it turns out she had already signed up for some webinars (sp?) from SCORE. They do seem to be a great resource.

I’m also going to look into the provisional patent. It looks like it might be a great way to get the ball rolling without having to go through all the full-blown patent hassle right off the bat. And the Kibernator is a great idea - although I do have a name in mind. I’m not sure it’s quite as catchy as your suggestion.

Thanks,

Meet with a good IP lawyer and decide if a design patent or utility patent makes sense. You may be able to get a design patent issued quickly but get it out of your head that youre going to wait and get the patent *first*. Even if there's material for a utility patent it will take years to get and even when you have it you won't have any ability to defend it. What exactly do you think is patentable? What would your claims be, if it doesnt do anything? It seems more likely a design patent might be appropriate but I don’t think it’s going to be an important part of your business anyway.

I agree with filmore about getting production sourced to Asia asap and finding someplace that can do quality you have faith in. Sales will be more important, relatively speaking. Or, I’m confident you can get it produced, but I think getting enough sales to support it will be more challenging - good thing your wife has that background.

Do you see this as a business you’ll run for many years for income or are you anticipating a liquidity event in the future? Incorporate if you forsee having follow on investors or ever trying to do an actual round of VC funding, or you might wind up with $100,000 in legal fees converting your LLC to a corporation. I don`t see any reason not to make an S election.

For college teams there are 2 big companies that handle the licensing for logos of the teams. That makes it easier than dealing with each school.

This company does most of the big schools

http://www.clc.com/clcweb/publishing.nsf/Content/Home.html

Thanks everyone for the input. I am definitely planning on meeting with a patent lawyer early in the process. I’m guessing that a design patent is the way to go - but not really sure where the line is drawn. I’m assuming for my purposes that a Patent Pending claim is enough to at least show people the concept and get quotes, etc. without fear of them immediately stealing the idea?

Along those lines - what is the best way to minimize the risk of people stealing the idea? A patent is only the start, and would require me to defend it. So does speed to market become important? If I can establish myself as the sole provider of said product, then would that inhibit other people from trying to copy it?

I’m also wondering if licensing firms, like CLC, will limit their licenses to only one manufacturer per product type. If that’s the case, then getting a license first could become as important (or more so) than a patent.

Note that filmore’s good advice about the provisional patent allowing you to cheaply obtain an early priority date will not apply. You need to file your entire design patent application - no provisional.

Your design patent covers the ornamentation and design of your product. A utility patent would protect your novel and non-obvious functional inventions. In either case, but especially in the case of a design patent, it really won’t make much difference to your business. Without knowing what your product is, it’s unlikely the design is so unique that a similar product couldnt be made without infringing in your design patent. Talk to the lawyer but I think youre putting much too much weight on IP protection.

I would suggest you stop worrying about people immediately stealing your idea for 2 reasons. (1) nobody is going to immediately steal your idea. If it was that phenomenal idea someone would have done it already. It’s only a good idea, if at all, with a lot of time and money and effort expended trying to implement it. (2) Somebody is eventually going to steal your idea and no patent is going to stop that.

Get to market quickly, be amazing at sales, have excellent quality products and great service and always build your company to suit your customers. The only real defensibility is, as you said, being established as the sole or major provider in the market. Become the youtube or google (I know google owns youtube) of weird sports fingerlike products. Until then you`re just trying to stay ahead of everyone else.