IP Strategy for Grant Funding
Join us for a fireside chat with IP Attorney & Technologist Eric Blatt, and OpenGrants CEO, Sedale Turbovsky. This webinar dives into how to build an Intellectual Property (IP) Strategy as a grant funding seeker or recipient. This information is perfect for startup founders and grant professionals.
In This 1-Hour Session, We Covered:
- SBIR data rights
- Steps to take to ensure the government does not disclose your IP
- How government data rights interact with a dual-use venture’s commercially oriented IP strategy
- How you can protect the long-term value of your technology for both commercial and government markets
- Worst case scenario resources
About the Speakers
Sedale Turbovsky, Co-Founder & CEO, OpenGrants
Sedale Turbovsky is the CEO and co-founder of OpenGrants, a venture-backed startup focused on building modern infrastructure for funding. He has been an entrepreneur since childhood. After honing his leadership skills as an outdoor guide in his younger years, he started his professional career as an independent consultant focused on delivering data products and digital strategies to enterprise clients in South America. He is experienced in independent grant writing and public/private partnerships at the highest level, having worked directly with OpenGrants’ current strategic partner, Momentum.
Eric Blatt, IP Attorney, Rothwell Figg
Eric Blatt is an IP attorney who focuses his practice on emerging companies, particularly SBIR awardees and dual-use ventures. Eric advises on the intersection of patent law and SBIR data rights, strategic partnerships and IP transactions, and a range of SBIR legal issues such as data rights assertions, invention reporting, SBIR eligibility, and Phase III contracting negotiations. Eric speaks regularly on IP strategy for SBIR awardees, including at the SBIR National Conference this October 2021. He is also a member of the Intellectual Property Committee for the Small Business Technology Council, which is a trade association that focuses on SBIR issues. Eric worked as a patent examiner at the US Patent and Trademark Office before entering private practice.
Read the Transcription
Please note, this transcription is automatically generated and may contain some spelling and contextual errors.
We’re going to go ahead and jump in. Thank you all for being here. My name is Sedale Turbovsky I’m the CEO and co-founder of OpenGrants and OpenGrants is a platform designed to streamline access to non-dilutive grant funding. And we’re really excited today to be joined by Eric Blatt. Who is an IP attorney at Rothwell Figg. And I’m going to go ahead and let Eric introduce himself and tell us a little bit about why he’s an expert and why we’re super excited to have him with us.
Thanks for inviting me to the talk today. I’m super excited to be here to give a little bit of background about myself.
My background is first and foremost in patent law. My career started at the U S patent and trademark office. I was a patent examiner for about six years. Many hundreds, possibly thousands of patent applications. I then decided that I did not want to grind on a docket at the PTO for the rest of my life.
So I went to law school and I joined my current firm. I work at Rothwell Figg in Washington, DC. My practice has been fairly broad. I’ve worked on a number of different things. I did quite a bit of patent infringement litigation, including for. Some of the largest companies in the world names, everyone here would recognize.
I also draft patent applications. For also for large companies I prosecute them before the U S penetrating mark office. And what prosecuting patents means is I negotiate with the patent examiners on behalf of my clients to attempt to persuade the patent examiners, to allow my client’s patent applications and having been on the other side of that transaction.
I know a fair amount about there’s a fair amount of institutional knowledge, just knowing what types of arguments are going to be persuasive to patent examiner. And how they want those arguments presented in general, just understanding, understand what’s what they’re looking for and what we’ve persuasive.
And then in the, my, I transitioned from traditional patent attorney career path into an SBIR and startup focused career path. I learned about the SBIR program in 2016. And I said, okay here’s a program where there are a lot of small businesses and startups and they are receiving government funding to perform research and development.
So a lot of these companies will be interested in intellectual property advice. Why don’t I learn everything I can about this program and start meeting and helping some of these companies. And so that’s what I did. So generally with the SBR program, a lot of IP is just patents. But there are also other issues relating to the program.
Government data rights comes up. There’s preference issues, there are eligibility issues. So there’s a whole bunch of other legal issues that are specific to the program. That I just decided to learn everything I could about. I spoke at the 2017 and 2019, and actually I just spoke at the SBR national conference earlier this week.
So 20 17, 20 19 and 2021, I spoke on the intersection of patent law and SBR data rights, government data rights more generally. And I also, write quite a bit on these topics and I help a number of companies that are participating in this space. And so that has gradually become, I would say a significant majority of my practices.
Awesome. No, that’s really cool. And for those of you who have already been so kind as to share some of your questions, we will be, we’re going to dive into a bit of a conversation here and we’ll try to cover a lot of really great information. And then we will have 20 minutes at the end where you can all you can all get your questions answered on a more.
One-off basis. So feel free as we’re having our discussion to go ahead and ping those questions, drop those questions, the Q and a, and we will get to them as our conversation moves along. And I’m really excited to dive in Eric and talk a bit about just first, what attracted you to. The startups there’s a lot of different ways you could’ve gone clearly.
Clearly you have a deep experience in kind of this space. And before we dive into that, I’m going to go ahead and I would just love to get some thoughts from the. From the group here from my attendees around where you all are in your fundraising process. So if you could, as Eric is talking a bit about his journey into this space, if you all could just let us know, where are you in your, grant seeking funding process and let us know how that’s going.
And Eric, if you want to just share, what actually what is it that attracted you to the startup space?
So there, there are a lot of reasons. But I think the core reason is it’s more fun to work with startups. There’s just a. As a lawyer, you have a little bit of a different experience, a little bit of a different feeling.
When you are helping a giant company pursue, patent application, 57,321, then when you’re helping are pursuing patent number one it’s a different, it’s a different experience. It’s a little bit more fun, a little bit more exciting. The work is also a little bit more varied. Patent attorneys tend to become very narrowly focused.
Whereas you heard my background, I do litigation. I do prosecution. I do deals. I do government contracts, a whole bunch of different varied things. A lot of patent attorneys will become. I do only patent drafting and prosecution. And not only do I only do that one narrow thing, I also do it only in one technical area.
So I only do telecommunications, patent prosecution and just it’s fun to my job. I talked to. New companies every single week. And my job is within the confines of about an hour to learn a new client’s technology. And it’s just completely varied. And to learn it well enough to file a patent application on it in about an hour. So it’s an interesting challenge.
No, I love it as someone who dropped out of law school and then also bailed on management consulting. I can attest the fact that startups are way more fun really excited to have you with us. And we’re going to dive right in.
I’m going to go ahead and end this poll. Thank you to everyone who participated. And I’ll just share the results here, exciting to see a lot of folks on the call, they’re exploring opportunity. And that’s where we’re gonna start. We’re gonna unpack the process a bit and talk a bit about some of the red flags that you should watch for as you navigate SBAR and the government space.
And I do want to proceed with the caveat. We’re going to talk a lot specifically today about SBI our programs in particular. There’s a lot of just concepts here that we’ll be sharing that, that applied to the larger space of working with other government other government contracts equals.
And without further ado, let’s dive into that first aspect of this process, Eric. What are some of the things that you see? You meet with all these different startups at different stages of their journey. What are the kind of red flags or the things that, you know, as a startup, that’s thinking about their IP strategy what are the things they should be thinking about as they proceed through this process of SBIR
So there’s a ton of things to think about as you’re waiting into the world of government grants and are a lot of those are outside my purview as an IP lawyer. So there are a tons of things to think about. Do I want to seek funding on this? Am I competitive for this on funding?
How do I actually go about putting together a competitive proposal? If I’m going to be. Receiving government funds, whether it’s to grant or through a contract. So I suspect a lot of the folks in this audience know, but the SBR program is comprised of 11 different agencies. All of those agencies run their own version of the program with sort of their own.
A lot of the rules are the same, but some of them are a little bit different. They all write their own solicitations, they do their own evaluations. And you need to comply with those rules. Some of the agencies by the way, are doing grants and some of them are doing contracts. But the biggest, the largest participating program is the department of defense, which is about half the program onto itself.
And all of those are, all of those are so when you Wade into this world, there are, accounting, Gregg, accounting compliance with technology rules and cybersecurity compliance. There are a lot of things to think about but the things that I am most useful about, and so I will choose to talk about on this webinar or of course, intellectual property.
So if you’re receiving. Government money, whether it’s through a grant or through a contract, any sort of funding agreement you will need to think about how that money is being used and what ideas that you’re coming up with in the course of performance under your government award. And depending on whether you conceive of.
We’re first actually reduced to practice an idea. And what that means is you build a very first working prototype and it has to be a pretty good, pretty reliable prototype for it to count. Then that would become a subject invention under the Bidell act, and there would be report reporting requirements to deal with.
And you wouldn’t want to miss those because it’s hard and sometimes impossible to go back and fix it. The other thing to think about from an IP perspective is. When you are performing under your government funding agreement, your SBI, our award the government is going to ask you for things, right?
So yes, a lot of the agencies are giving a grant to, if they just want to move your technology along or help you move your technology long. But they’re gonna want to see reports along the way, right? You’re gonna submit a proposal. They’re going to evaluate it. If they, if you get the award, then you have reports along the way.
And if you’re working with the department of defense or NASA, they may also want you to deliver. Source code or other things that are proprietary and sensitive. And so you would also want to make sure that you are taking the necessary steps to make sure that you don’t give your source code to the department of defense and then have the department of defense pass that source code along and say, Hey, this is great.
This is really cool. Let’s give this to, a large prime, let’s give it to Microsoft. Let’s give it to Lockheed though. Those things are bad for your business. So you should do what you can to avoid those situations.
Awesome. Yeah. And can you clarify a bit just especially for the folks who are still exploring what you brought up a couple of terms, but I think one of the ones that maybe is really relevant and a dynamic that I have enjoyed hearing you explain in the past who are these, what does it mean?
The, were these large prime folks and why would the government rather give them your tech instead of just investing in.
So they wouldn’t necessarily prefer to give it to other companies, but the large primes are just large companies that it’s w it’s a called a prime contract. So the government, especially the department of defense has a lot of money that it uses for research and development and the government.
Some scientists and some engineers, but it largely relies on the private sector to do this work. So it makes prime contracts to companies. And then those companies then have the choice to subcontract pieces of it. So you have prime contractors, you have subcontractors that work below that the prime contractors, the large primes are traditional giant government contractors.
So think of Lockheed Martin, think Raytheon, think L three Harris Boeing. And, but of course the government. But depending on the nature of the technology, it may be interested in having your technology or something that’s fairly close to it and giving it to any number of companies. The reason that the government might be interested in doing this is yes, it’s true that the government is very excited about working with startups and small businesses.
That’s what the SBR program is designed to facilitate. And yes, the government also recognizes that there are certain areas of technology where startups and small businesses are just ahead of these traditional sort of lethargic, slower moving giant companies things like AI, machine learning. You are probably going to get a higher a cooler solution working with, startup from, the places that are renowned for having these types of technology than you would with a large prime.
The folks that are doing this are at startups are often better at it. But on the other hand, the government it’s a giant slow moving and risk averse organization. So the government. It does want to funnel money to emerging technology, startups and small businesses and help move that technology along.
It also has some concerns about putting too many eggs in a startup’s basket. So the cold reality is that most startups fail. A lot succeed, thankfully, but a lot just, work for 2, 3, 4, 5 years, and then they stop. And maybe they sell their assets or maybe they just stopped.
And so the government doesn’t necessarily want to put a hundred million dollar contract, giant program of record in the startups basket. It might rather take this startups one piece and then pass it along to a larger company that. Broader system and integrate that one small case into the large primes system.
The other things that the government may be concerned about are. Are your, can you scale up quickly enough to meet the government’s needs? So if you’re talking about the department of defense, a gigantic organization, it could have huge needs is your company, which is currently, depending where you are.
Maybe it’s two people right now. Maybe it’s 10, maybe it’s 50, maybe it’s a hundred, but can you scale up quickly enough to meet the demand there? Another thing that comes up are the department of defense. As you get further and further along, and the technology becomes more and more promising and you get further integrated.
The technology compliance requirements step up they’re there from the beginning, but they can get more and more burdensome and. Are you as a startup, a two person startup are your it systems secure enough that you’re not going to become the vector for the next hack. So for all of these reasons and others the government would love to fund loves to fund these companies.
And it loves to make smaller, $1 million here, $2 million there to move the tech along. But when you want to actually sell the technology on an enterprise scale a lot of times the government would rather do that. And with the large.
Yeah, no, I think that’s a great point. And one of the important things that you brought up earlier, and I think is highly relevant to this discussion is the importance of, not only not disclosing important, like IP in your reports because if you could correct me if I’m wrong, but this, these things, when you deliver them to the government become a matter of.
Public record. And if you don’t have if you don’t have the wherewithal to, be either engaged as a partner with one of those primes, you may end up in a situation where you know, that information you disclose gets into the hands of someone else who the government sees as a better partner to, to carry that scaling forward.
Is that a correct characterization?
Yes and no. So yes, it is true that if you don’t properly, so the SBR policy directive. Just the folks here are not familiar with the document. You should just Google SBI or policy directive after this call a webinar. But it has provisions that protect against the scenario that you just highlighted, which is where the small business includes in its proposal.
Proprietary information. And then, so you basically put a confidentiality marking on it, and then the agencies are supposed to respect that’s proprietary. There have been situations where folks knew that a competitor was submitting an SBR proposal. They submitted a foyer request. The government is supposed to.
From any of its responses to foyer request any information that’s designated confidential. So if you slap that sticker on the front and you put it on the bottom of each page, you’re very likely going to be fine. It’s not going to be shared, but you should know enough to put the proper legend on your document or it could be shared.
And a lot of people just don’t look. So it’s an easy thing to do to avoid that risk. But you need to know enough to do.
Yeah, and it sounds and in my experience, the people that know enough to attend, do these things and help you navigate are going to be attorneys like yourself.
Who, have expertise in putting these things together. Are there things that, you feel like entrepreneurs and folks who are exploring this space should be should be exploring. Should they just go straight to hiring attorney and just get it done that way? Or are there some best practices and other things you think that in terms of just this IP strategy that they should be pursuing for.
Sure. So there’s some easy things that if you’re going to pursue the SBR program you can do yourself. So things like putting the confidentiality of marketing on your proposal, that’s easy to do. Just Google SPR policy directive. It’s a long document, but, get through it or at least look for the confidentiality marking, slap that on the proposal.
The other thing that’s easy to do and is incredibly important, but still a lot of companies, I would say more than half of the companies that I first meet with are not doing this properly. So this is a very common error. You need, if you get your. SPR award, whether it’s a grant or contract, it will include a provision that you’re supposed to apply to your reports.
Your technical data, your software that says it’s SBI our data and that the government’s use and disclosure of that SPR data is limited. And you need to find that clause in your funding agreement, and you need to put it on all of your reports. If you do that, then the government is not permitted to share that data externally with your competitors.
There are certain exceptions for government support, contractors, evaluation but for the most part, the government is not permitted to share that data externally with your competitors. They’re not allowed to use it for a manufacturer, so you’re basically protected against the competitively sensitive scenarios.
As long as you apply that legend to your reports, into your software. So do that. Those things are easy to do. You can do them yourselves, if you do want more in depth help. A lot of SBR awardees want to file patents or a lot of SBR awardees want to, publish for reasons related to business development or science academia or there are things like several words, subcontracts, a lot of folks are partnering with universities.
You can find these resources, you can look for them online. I’ve published a number SBIR.gov has a training series on it. I have watched some of those materials. I do not find them helpful, but maybe you will.
But yeah, I think if the easy stuff to do. Get the markings on there. And if you want to have more, in-depth help. If your questions are a little bit thorny or it probably does make sense to talk to a lawyer.
Awesome. Yeah. And I think, that’s a question as an entrepreneur myself, I think that comes up frequently.
It’s like, when do I, when should I pull the trigger and hire an attorney? They’re expensive usually, and I’m looking at whatever my burn rate is. And I’m like, ah, maybe I should just go on avid docs or just sign this thing and Google around. And is it gonna, be a problem in the future.
When do you think, w when should a founder or startup team engage an attorney in this process? What are like, is there a point that you’re like, you should definitely have an attorney.
I’ve seen a lot of companies make it pretty far along the process with hierarchy without hiring an attorney. I’ve also seen situations where they make it far, pretty far along that process without hiring an attorney, thinking that everything is good and then a problem happens and it turns out everything wasn’t good.
I would say folks reach out to me. I do a lot of intro calls, just like networking. Let’s meet each other. Maybe we’ll work together. Maybe we’ll just say hello. When people are submitting. Right before, for whatever reason they wait till the end. When they’re submitting phase one proposals, sometimes people hire me at that time.
Cause they’re just pretty sure that they sorta know what their technology is and they want, they know that they want to file a patent application on it. And. Before you start working on an Escar ward is a good time to file a patent application from a legal perspective, because at that point you don’t have any question about whether it was conceived with government funding.
It wasn’t because you haven’t received any government funding. So that can be a good inflection point to go ahead and file a patent application. The other time. Probably I get higher more often and people commit to actually spending dollars on legal services more often than at the point where they are converting from the phase one to phase two, because a lot of folks, and I don’t know whether this is actually helpful, but a lot of folks just wanting to include in there.
Phase two proposal that they have filed a patent application or that they’ve spoken to a lawyer and have a plan to file a patent application. But yeah, some, somewhere along around that phase two process is probably when people start getting a little bit more serious about dumping money into the IEP process.
Yeah. That makes total sense. Folks, as we are talking, feel free to throw any questions in the QA tool there. We’ll be happy to answer. And just a little bit here. So I think, one of the things that on the topic of hiring attorneys one of the things that I think is also, frequently a challenge, at least for me as a founder, it’s been a challenge is that I don’t really know how to tell if the attorney is good or not.
Like I just, typically I’m just like, alright someone else liked him or her. And so we hired them. So do you have any thoughts on, questions they should folk should ask or different things you should be doing to legal counsel, in terms of how good or bad they might be to in terms of being helpful.
Yeah. Definitely ask around if you’re just going to hire someone on Google, based on their bio, that’s probably not all that helpful. If you have someone that you trust that can put you in touch with someone that would be a good way to start. I would say that the most important thing is to get a sense for whether the attorney is someone that you feel.
I’m just talking to someone you can ask. How is this someone that’s going to be trustworthy? Is this person going to be responsive, keep track of, if you send an email and don’t hear back from three days, maybe find someone else. Cause that’s, that problem is only going to get worse. They’re too busy.
They’re too busy. And you as a small business are not going to be on the top of the pile relative to the giant companies that they’re working on or working for. So keep that in mind. A lot of folks will offer you a free consultation just to see if it’s a fit. So take that and you can get a lot more information and knowledge of whether they’re going to be a good fit for you or not.
A lot of people suggest asking the attorney about their technical experience in the very narrow area that the company is working in. And I’m not going to say that’s a bad question to ask. I will just say how we as patent attorneys typically respond to that question. Yes. I, as a patent attorney have filed many hundreds of patent applications and I worked for lots and lots of companies working on different things.
And so if you ask me, do you have experience in this? I probably do not have a ton of experience. On that thing. I probably, if your thing is unique, I certainly don’t have any experience working with that thing specifically. Cause no, one’s done it before. That’s where you’re talking to the patent attorney.
So instead, what we do is we think through, and try to find one or two things that we can present as pretty close. And then we just talk about those. So I’m not sure how helpful that question is. But certainly you can ask it you’ll probably just get. The one or two matters that are similar.
For the most part, we need to learn your technology and the way we learn your technology is you tell us about it and we ask questions and then we combine that with our prior knowledge. And sometimes we do a little Wikipedia as well. It’s but yeah, our job is to learn your technology very quickly.
And we’re fairly good at that. Any other questions that you can ask? Oh, you should ask how much it will cost. You should ask how much it will cost. And my view, if you’re working with startups, is that. The lawyer should be willing to give a reasonably firm estimate and what amount not to exceed with maybe a little bit of wiggle room big, but I, at least if I were a small business that didn’t have a ton of money and I would not enter.
And I would not hire someone that tells me it might be in this range, but it might be twice as much. And I can’t make up.
And I’m going to go out on a limb and assume that this is one of those questions that might be hard to answer, but is there a typical price range for this and having hired a variety of attorneys of my career?
I’m gonna assume that it’s a sort of you gotta figure it out, but are there any kind of like standards that you’ve seen around the industry?
Yeah. So there’s a bunch of different services that I provide. The one that I is probably the most predictable is filing patent applications.
So the American intellectual property law association, which is a trade associations for IP lawyers does a survey every year and they asked. I guess every other year, actually. And they asked the lawyers that respond to the survey. How much on average do you charge to file patent applications?
And the answer that the survey gets is some were in the range of, I think it’s eight to $11,000, depending on the. Laxity of the technology. And so that would be the ballpark national final average rate for a patent application. If you hire, certain, very large firms you will very likely be paying Sydney significantly more than that.
And then there are some folks that will probably charge you a little bit less. My, I heard small businesses. I try to stay on the lower end of that eight to $11,000. Awesome.
That’s great to know. I’m going to go ahead and launch another poll real quick and while while our audience here I’d love to hear your thoughts around how you feel about working with the us government as it relates to your.
And as y’all respond to that poll and I appreciate your engagement there. Eric, I’d love to hear your thoughts on, we’ve talked about working with the phase one and phase two and working with within the, like the confines of protecting your IP and your IP strategy for the government.
I’d love to hear your thoughts on how all of this kind of shakes out as you work on commercializing. And if you end up going and addressing a larger. What, if any impact does this have on having that future, those future relationships and, is this something that you have to keep looking at in your rear view mirror and managing or is it, just something that happens and you move through.
So the government funding part of that. IP certainly is absolutely going to be critical for all phases of commercialization. I can talk about that second. But the government funding component. It’s probably, if you’re commercializing by selling to the government, which a lot of Escobar awardees do, then obviously the government component is very important.
If you’re commercializing by selling to consumers or to businesses in the commercial sector the fact that you get government funding or you win an SBAR phase to work with the national science foundation or the national Institute of health. Can be incredibly helpful for credentialing, right?
You get to put up on LinkedIn that you won this award. It’s very competitive, but only 18% of applicants get or whatever the number is for your agency. And that can certainly be a helpful thing. I think it’s unlikely that anyone’s going to ask, did you secure your IP properly when you work in the government?
Show me your reports that you marked. I don’t think that question is going to come up. So I doubt that from an IP perspective, that question is going to be terribly important. At least for commercialization purposes. Obviously it could be important if you don’t mark your data and they give it to someone else.
And now Microsoft is using your technology. And with them, it’s much larger platform. That would be a bad thing. But usually that doesn’t happen. And if you mark it, you’ll be okay. As to whether, IP is going to continue to be important. Obviously, yes. Anytime that you, it’s very hard to commercialize a product on your own, very likely you’re going to.
To do deals with, are there companies, whether those are small businesses or large businesses where you really want to leverage their platform or some other aspect of the technology to build, your little piece of a bigger product. And so as you’re doing that you want to, make sure the non-disclosure agreements are there.
If you’ve got some sort of collaboration agreement, whether that’s research and development or joint reseller agreement, whatever it is, make sure that those have the right terms in there. They’re going to protect your interests, protect your intellectual property. And then for a lot of folks who do want to file patents having the patent for a patent application in place will also provide some security, peace of mind.
Because anytime you’re doing deals with our other companies, you’re going to be worried that they’re going to, everything is good right now. We’re all friends. We want to work together, but three, five years later, maybe things change. You never know what’s going to happen. So having the patent as the fallback option, where if they do breach the non-disclosure agreement or the spirit of your agreement you have that agreement to fall back on, but you also have the patent in place.
And so that they take the technology. Not only can you see them for breach, you can Sue them for patent infringement and that, increases their risk and deters bad action. So those patents can be helpful for that.
Awesome. Yeah. Thank you so much for sharing that. I would love to think thanks everyone for participating in the poll as well.
It sounds like most folks are cautious about working with the government as it relates to your IB. And I think this is like the last concept that I wanted to discuss and driving. Eric, I think frequently we have we have a variety of lenses through which we view the government.
There’s a lot of discussion and thought to unpack there, but as far as like small businesses go and working with the government, there’s in my experience, there’s often been almost an adversarial kind of approach. And in my personal experience, having, this is my fourth venture backed company and we have government.
I’ve had government contracts in the past. I find that there’s much more of a spirit of collaboration. When I actually start working with the people inside of the government, I’d love to get your take on that. From your kind of from your perspective as an attorney is, how cautious should you be as you approach working with the government.
And do you find that that whatever that feeling is warranted Yeah.
So I advise startups on this question, both with the government and with commercial partners and, people go out and they ask me, should I share information about my technology before I, when I pitch investors?
Or should I be worried about this? And what I say is with all things in life, there are risks. If however, just by. True of launching a startup, you’ve taken on an enormous risk. And the reality is that most startups fail and they don’t fail because someone took their IP. They failed because they didn’t get their products to the finish line or because they made a product, someone didn’t want to buy.
And so in order to. Actually have a successful startup, a successful company, successful enterprise. You need to be willing to share some level of information because if you don’t have those conversations, if you don’t sign those deals, if you don’t get your million dollars of government funding in order to move your technology along, it’s very likely your company will fail for reasons completely unrelated to intellectual property.
So I encourage folks to, to be willing to take on some risks. But as a lawyer, I have to say, this is not legal advice. You make your own decisions, doctor, lawyer, and there are obviously things that you can do to mitigate those risks. So if you’re a startup, you have to take risks, take some risks, but do so in a way.
That is intelligent and mitigate those risks. Sign NDAs, where you think you can feasibly sign the NDAs, where it makes sense file the patent applications before you, go out to the tech connect conference or wherever you’re going to go demo your if by the way, if you don’t file your patent application before you talk about it in public, or before you publish it on your website or anywhere else, you may forfeit the right forever to have patents on that technology.
File the patent application first, before you put it out in the public space. But generally dealing with the government is like any of these other risks. It may actually be lower risk than some of the other options. And for the, I certainly don’t want to discourage anyone to protect from participating in the SBR program.
It’s an absolutely great program. The companies that I work with absolutely need the most. And it’s an easier way to get that seed funding to move the technology along to a place where you can actually get private funding. Because if you’re super early, it’s really hard to get funding. The SBR program is a solution to that problem and it’s a great solution to that.
Yeah, a hundred percent and I will add two things, one that was a very eloquent eloquent summation of, I had a mentor one time telling me that no one cares about your idea and leave it at that, go get, do whatever you’re going to do now, in case, frequently I find, people are busy, they got their own things going on.
People aren’t really out there trying to try to steal your IP. The other important thing of course is to file those. And I would love to hear your thoughts related to the patent filing process, in, in one of my startups in the past, we filed provisional patents ahead of time.
Because it’s something that we could do ourselves that was pretty quick and easy. Do you find that is a good strategy as well to get outta out ahead of things? Or do you need to have that full patent filed before you go start talking to folks?
All right. So the answer is a little bit nuanced.
If the choice is between filings of pro se means you do it yourself. If the choice is between filing a pro se patent application and doing abs and filing nothing at all you’re better off filing the pro se patent application before you go out and publish something because otherwise you’re certainly going to waive rights, right?
It’s. Is the pro se patent application necessarily going to save you down the road? Is it going to ensure that you get the rights you need to get? No, it’s not, but it’s better than nothing. If you want something more robust, there are a number of ways to do that. So you can hire a lawyer to file a formal non-provisional patent application and you’ll wind up most likely in the range that I said before.
Eight seven to eight to $11,000 range somewhere in there. If you want to do something in between. So one thing that I do when I’m working with a lot of early stage founders. So I work with folks that are fairly far along the process who have money, but they have absolutely no time. They just want to say here’s my technical disclosure, right at the patent application.
Let me know when it’s done. I’ll take a quick look and file it, but I just don’t have the time. Other folks are very early stage and they say, Hey, I want to be super involved in reviewing and contributing to the patent application, but I don’t have a lot of money. So do whatever you can to keep the costs.
And so I use different models. When I’m drafting patent applications, depending on what the client is interested in, if you are in the boat where you have the time, but you don’t have the money. One thing we can do is we can have a technical call. You explain what the invention is to me, we figure out a claim strategy.
Usually I write the claims. It’s very hard if you’re not an expert in patent law. Claims that are legally defensible and effective. So usually I’ll take the first draft of the claims. Then we go back and forth. We agreed to what the strategy should be for the patent application. And then I’ll basically outline the rest of it.
So patent application has two parts. It has the claims, which are your legal rights, very sensitive to drafting errors. And then there’s the specification, which is the description of the technology. That is much less sensitive to errors in drafting. And so what I’ll do is I’ll draft the claims and then I’ll outline the specification and then the client will basically draft that.
And then I’ll go in and Polish, I’ll clean up the legal admissions and the problem, problematic statements. And then we basically ended up with a pretty solid legally sufficient provisional patent application at somewhere around half the cost of what it would cost to, to do it. If I get all of it.
Awesome. I love that. All right. This has been awesome. Eric really appreciate you taking the time to dive into this stuff and thank you all who have submitted your questions. Let’s dive into these a bit. I’m going to go back to one of these first questions has a question about addressing how to obtain grants to develop previously patent technology.
First IP rights. How about tech developed from grants? I think at the end of the day one of the things that is being asked here is more about like grant funding and how that relates to IP rights. It sounds. And I think we’ve covered that pretty well, but I’ll say that you definitely want to speak with your attorney about all of that and just unpack that process.
The things that Eric’s brought up already, I think address that well, if just, making sure to follow that pattern before you’re publishing things and approaching that from a from that standpoint Go ahead, Eric.
I’m not sure I fully understood the question, but I thought maybe it was asking if I have IP before I start working on the grant application of the funding agreement, and then I continue to develop how does that break down?
The answer to that question is what you bring to the table. You would own outright? There would be, it wouldn’t fall. It wouldn’t be a subject invention under Bidell, unless you use government funds to reduce it, to practice for the first time. So you could theoretically find it file a patent application on what you have before you start work.
And that is just your own. Patent application, no rights to the government, and then maybe you’ll make some improvements. And as you’re working under the government funding agreement, and then if you do decide to patent those improvements, the patents on those improvements would be subject inventions under by Dole, where the government would get certain rights, but that wouldn’t necessarily go back to the stuff that you brought to the table beforehand.
Awesome. Thank you. Next question here, what does a priority search look like in the context of previously awarded grants and how do you use that discovery to position a grant proposal for an award while reducing total disclosure?
So maybe I’m wrong about this today to let me know, but I would not put a priority search in a grant proposal. I wouldn’t say I spent 30 hours looking for prior art and I didn’t find anything like this. I don’t know that would be terribly impressive to, to the grant evaluator. But today let me know if that’s wrong.
As far as prior to searching for patent law, I do know the answer to that question. Folks hire me. They want to fill out that application and they ask if they should do a prior art search. And what I tell people is that choice is up to you. Having done. Many examined many patent applications as Baton examiner had done many prior searches myself.
If you tell me about your invention, I have a hunch about which parts of it are patentable and which types of details are going to be stronger from a patentability that perspective than other types of details. And I feel fairly good that if we just talk through what the technology is that we can come up with an appropriate claim strategy.
Where we’ll have our initial ass, which will be a fairly broad claim. And then we’ll have fallback options so that the claims will be structured in a way where we’re reasonably confident that we’re going to get the best thing that we can get, essentially, without doing a priority search. You can usually draft a pretty good claim set without doing a prior search because usually.
The founder is working in this space and they sorta know what’s out there. They don’t know with perfect certainty, but they have a pretty good idea and we can do something pretty reasonable. You can do a private search if you want to, if you want to supplement that. So if you really want to have more certainty if you want to, sometimes just by doing a prior search, you’ll learn other things people are doing and you have new ideas.
And you get a little bit smarter about what your product is going to be, what your technology is going to be. Maybe how you draft a patent, you’ll just select slightly different wording or include another embodiment. So there are things you learned by doing a prior search, but then there are also risks to doing a priority search.
One of them is. If you’re ever sued for patent infringement. And by the way, if you get sued for patent infringement, it’s most likely because you’ve made a lot of money. A lot of people go in, they ask me, are, should I be worried about getting sued for patent infringement? What about freedom to operate?
Yes, that can be important. And it’s especially important for things like biotechnology, where you have to put a ton of resources. And at the beginning before you can get to a product for software stuff In the world where you’re getting sued for patent infringement, you’ve made some money and you’re probably happy.
You’re not happy to get sued, but you have a successful company. So the priority search. If you find patents that you do think there’s a risk of infringement, you can create liability for yourself. Because now that company is not only suing you for infringement, they’re suing you for an infringement of a patent that you knew about, and you knew you were infringing and they’ll Sue you for what’s called willful infringement, which can triple your liability.
It can triple the amount that you have to pay at the end of the day. So there are some downsides to certain. Patent office, us patent office doesn’t require it. And whether you do there’s pros and cons of that decision is up to you.
Awesome. Thank you. Another great question here. And I think also just part of our human nature to learn about these things.
You mentioned that things can go terribly wrong after thinking everything was going along. Just fine. Can you give some examples?
I’m not going to give names. Of course. And I’ll remove all the identifying details companies will it often happens with when the government funding world, it usually happens in the, when folks are working with the department of defense, that contracting agencies. Cause that’s when they get further along the process because the government actually wants to buy the thing.
So when folks are. They get through the phase one, they get the phase two. And then, maybe they get a phase three or maybe they don’t. And then all of a sudden it turns out someone in the government mentioned to them, Hey, I learned that this there’s this other company that the same group that was working with you is now working with them and they have a contract with them.
And I’m not exactly sure what happens, but my goodness, those two products look alike. Then you might say, okay did we mark our stuff correctly? Did we sign any sort of agreements that gave the government to share this? Did we properly educate our customer because the government is a giant organization and the SBR program.
It’s about $4 billion a year that they go out the door in phase one and phase two funding, which is a lot of money for you and me, but it’s a drop in the bucket for the government. And so within the government, most government officials do not really know the rules for the SBR program. And so if you’re in phase one, phase two, you’re working with the SBI, our office, because that’s where you know where your contract or you’re getting your funding from.
Phase three, you’re not working with the SPR office, you’re working with the program office or the customer that somewhere else in the government, they don’t really have most likely they don’t have a lot of experience with SBR. You may need to educate them about what the rules are so that they don’t unintentionally break the rules.
A lot of times they’ll the government will if you have really promising, really interesting technology, they’ll want you to work with another company. Okay. So what are the rules for working with the other company? Do you have the, has, is the government following the SBR rules to make sure the non-disclosure agreements are in place to make sure reverse engineering?
Re-purposing the technology. There are just a bunch of things that you want to think about because you don’t want to wind up in a situation where you’ve unintentionally given the government permission to give your technology to another company.
Awesome. Great answer. I’m just gonna hop around the questions a bit here.
As we come close to the end of our time, and then we’ll do like a, we’ll do a speed round with our last five minutes here, but this is a really great question. What level of prior reduction to practices required to avoid the government? Having rights to the solution? Proof of concept working prototype fully baked especially for software and user interfaces.
There’s a lot of case law on exactly what reduction to practices and what you need to do. Hire a lawyer talked to your lawyer, but generally, roughly speaking, the answer is that the prototype needs to have everything that is in your patent claim. So if you’re missing some part of what you wind up claiming and what the patent office winds up deciding is patentable that likely would not be a reduction to practice.
And you also need to get the prototype to a point where it works fairly reliably.
Awesome. Thank you. Another great question here. We are currently, we’re waiting for the NSF SBI decision based on our tech. The large prime as mentioned is interesting. And goes on to say, I’m assuming this will be where we fall.
How will they approach us? Is it more of a forceful suggestion?
Congratulations. Sign an NDA. Talk to them be a little bit guarded about what you’re sharing, but if you’re going to get something very sensitive, like your source code to that company or if you’re going to share anything about, the secret sauce of how it’s working you might want to have a more robust agreement than just the form NDA that everyone signs something like a research and development agreement.
That will have specifically what the parties are allowed to do with each other’s IP and what they’re not allowed to do protections against reverse engineering, et cetera. Yeah. Have some protections in place, be careful, but this is probably an opportunity worth exploring for your company.
A couple of quick ones here. What if you have a really limited budget and you need some legal assistance, are there any are there programs that for where attorneys will do legal support for like for credit or equity or pro bono?
So the patent office has something called a patent pro bono program. I’m not sure how much availability there is in it. But you can certainly look that up and see if you can get a lawyer who’s willing to work on your application for free a lot of folks for easy questions. So I would put myself in this bucket.
If the question is something that I can answer in the 30 minute or 60 minute call, and it doesn’t seem like we need to like draft documents, it’s just, Hey, what is the answer to this easy question? I’m happy to do that for free on just an intro call. I will tell you that you have not hired me as your lawyer and that it’s not legal advice, but I will attempt to give you directly to the appropriate resources.
Kind of general guidance about what, what the rules are and other resources. Yeah, there’s a number of lawyers that are also willing to provide discounted rates and fixed fee agreements. Some folks are able to take equity as compensation. So some, if you’re working with it usually is going to be a lawyer that has essentially gone so low.
Because if you’re working at a large. It’s difficult to take equity because, and there’s going to be, rigorous vetting process because essentially the law firm is investing in you. So there are folks who do that. And then there are, of course a number of lawyers who will offer discounted rates and sort of promotional deals for small businesses to get to work in the door and help.
Awesome. All right, we’re going to go ahead and move into a bit of a speed round here. Have some questions. And as we close out here a couple of quick ones question, how about verify the attorney? Is that a service for verifying attorneys? I’m not familiar, but Okay. We don’t know, but we’ll try to get you an answer about that one.
What if someone is requesting a retainer of $2,500.
That might be reasonable. It depends on what you’re planning on doing. I maybe I’m going to regret saying this. I try not to request retainers when I’m working on certainly small matters with startups because that’s your working capital.
But on the other hand, if you want to hire me to file a lawsuit, I’m definitely going to request a retainer, but for a patent application, I use.
Awesome. It’s good to know. How about are there things to look for that we could identify where we wouldn’t have to think about IP protection?
Are there things to look for basically? Are there situations where you don’t have to think about IP?
I think anytime you’re running a business, you’re going to want to think about IP and a general sense. There are certainly a lot of businesses that get by, for example, with no patents whatsoever.
You might just, rely on secrecy, NDAs, et cetera. But if you’re running a business that is technology focused in any way, you’re going to want to think about how information is moving around and make sure that you’re, you have a reasonable strategy to protect the value of what you’ve built.
I have a trademark that I want to patent also, is that possible?
So trademarks and patents are due to different things, so no, that’s not possible, but if you have, a term that you like for branding or a logo or a design that you like for branding, you can register that with the trademark office and get some protection against people using that phrase or that design.
Awesome. What’s prior arch?
That’s a loaded question. That’s defined by the applicable law, but basically it’s anything that is in the public domain that came before. When you filed your patent application.
Beautiful. Three questions here. We’re going to go all through them. Do you think that Carta is a good idea for dealing with the DOD to potentially lower your legal costs?
Creda is a cooperative research and development agreement. So if you’re gonna partner with with a company to do research and development, that’ll have, a research development agreement. If you’re doing it with the government, they’re going to ask for crater cooperative research and development agreement.
Is that a good thing? Creators are usually less protective of the company’s IP rights, then the SBI or award-winning. So I’ve seen situations where companies have an SBR award, and they’re also asked to enter a Greta. And usually that actually creates problems because the SBI, our contract is fairly protective of the government of the company’s rights, but the crater is not protective.
And so then we have to deal with that. Awesome.
Do you think if you’re commercializing a technology from a lab. You should go for an exclusive license and exclusive option or what’s the best way to pursue that relationship.
That’s a business decision that I can’t enter in.
And then this other this other question here is one that I’ll answer real quick, finding contracts with PEO with PDO soldier and S C four ISR has been troublesome along with state department. How do you find those resources? We have a variety of tools with an open grants that we’re developing.
Currently there’s a lot of other avenues to pursue. These are great business questions. Definitely reach out to our support team at open grants for some of that stuff. All right. Quick, last one. How long does a patent last and does it need to be refiled?
That’s a question that’s very easy to answer. Patent, if there’s a statutory term, it’s in the law and it’s 20 years from, so you file your patent application 20 years after you file it. It will expire. There can be certain extensions. If the patent office doesn’t act on your application quickly enough, if it just sits on it for five years, you’ll get some term tacked on the back end. But 20 years.
Awesome. Thank you so much. Thank you everyone. Apologies. If we couldn’t get to your questions, we will do our best to send along some more answers and information in our follow-up. Also, this webinar will be recorded and post to YouTube. Thank you all for coming. Thank you so much, Eric really appreciate your inputs and times a day.
And if you want to connect with Eric his links will be in the follow-up as well as it should be in the chat and in the QA tool. Definitely reach out, feel free to connect with myself. And I think Eric would also welcome connections on LinkedIn. Thank you so much, everyone.
We’re going to go ahead and close for the day and thank you all for joining. We hope to see you.
All right. It’s a pleasure to sit down. Thanks so much for having me.