A Start-up’s Dilemma: Confidential Information

IP Questions

In the early stages of any new product or business venture there are more questions than answers. Some of the most important ones involve the management of intellectual property and here are a few examples. “How can I get information that will move my project forward without the risk of someone stealing my idea.” “How can I share information without giving away secrets?” “Can I discuss my idea for early market and technical research before deciding to file a patent application?”

Since there is a lot that could be said about information management, this article is limited to a few basic concepts to apply early in any innovation process. Your biggest competitors gather information all of the time, but they know how to do it without giving away information about their new products or business ventures. You can be as smart as they are about innovation.

“How can I get information that will move my project forward without the risk of someone stealing my idea.”

First, all information should be considered confidential until you know otherwise. For example, you may learn by your own research that parts of your new product are already available. This means that they are in the public domain and don’t need to be considered confidential. If you want to get details about their manufacturing, you can use those examples to request technical information or get cost estimates. The key is to ask general questions about materials, manufacturing, processes without telling anyone what the information will be used for.  Use similar products as examples, instead of your new product. Remember that if the combination of different parts is new, that information and the final product should be kept confidential. 

“How can I share information without giving away secrets?”

Again, use known examples or similar products. For example, if you are building a business to make gluten free products, don’t give anyone the exact composition or the recipe. The secret is the product and the recipes, not the business. If you have a product that has a lot of moving parts you can generally talk about what it does, especially if the key parts are hidden from view. The goal is to keep secret the parts and how they work together.  A good rule of thumb is to remember that the invention is what it is, not what it does.

“Can I discuss my idea for early market and technical research before deciding to file a patent application?” 

For most products that could be reverse engineered and made by your competitor, patent protection should be considered. Early patent research will help determine whether that is a feasible option. To get the best research results, you need to provide all of the details and in this case it is best to use a “Confidential Disclosure Agreement” (CDA) or an “Non-disclosure Agreement” (NDA) to ensure that the person receiving the information knows that you are serious about keeping your invention secret prior to filing a patent application.  Agreements should be used whenever details need to be shared (if you can’t speak in general terms), such when you go to someone to make a prototype. Know the person you are sharing with and the risks involved. The risk when you share information with your family is not the same as when you share with a major manufacturer. Make a conscious choice of who you will share with and how. 

Ideally, you want to establish an intellectual property strategy early in your product or new business venture. If it is a new product that can be reverse engineered by your competitors, you should consider patent protection. If the product cannot be reverse engineered or it is a process that can be kept secret, you should have a strategy for protecting your trade secrets (recipes, processes in a factory, some business processes, etc.). Copyright should be considered for computer code, literature, drama, music, art, films, other audiovisual works, architecture and other creative works. Trademarks identify the origin of your products and services, and help you build your brand.

Yes, the world of intellectual property is complicated. It has a lot of rules that if followed provide important competitive advantages, but if not followed can have serious consequences. Each business venture is different and there is no “one size fits all” approach when it comes to developing and protecting your intellectual assets. Business advisers with limited experience in intellectual property may not understand all of the options or legal implications. You need a strategy tailored to your project and an experienced intellectual property professional can help you. Once you have an intellectual property strategy in place, your business research and development strategy will move ahead much more efficiently and cost-effectively. 

Ellen Krabbe is founder and president of Fresco Services LLC, an intellectual property firm promoting innovation by providing world-class patent research, strategies and other intellectual property services.

What is Behind the Shark Tank Question “Have you got a patent on that?”

The ABC network television show Shark Tank has almost become a standard for entrepreneurs pitching their business to investors. In fact, if you do an Internet search for “Shark Tank lessons” you will get thousands of results for articles with great advice about business development and pitching your business. However, very little time is spent in those articles on what is behind the almost systematic question “Have you got a patent on that?”.

The goal of this article is to present a few thoughts on what the “sharks” know and some assumptions they may make based on the answer to this question.

Here are a few examples of what the sharks know.

  1. If you have a provisional patent application, they know you do not have a patent and you may never get one. Since anyone can file a provisional application on anything, there is no guarantee that they will get a patent unless it meets the requirements for a patent.
  2. They know that a good provisional should meet the requirements of a non-provisional patent application and in preparing it you will have identified the ways in which the product has distinctive differences from competitive products.
  3. They know that you are serious enough about your product and business to seek some protection and competitive advantage.
  4. If you have a patent, they know that your product has been researched, evaluated by several independent sources and recognized as new and different.
  5. They know that with a patent, the product is protected in a way that may make the competition think twice before copying it.
  6. They know that with a patent, they can bring legal action in the case of infringement.
  7. They know that patents improve options for licensing and licensing may be at higher royalty rates.

There are also several things that they might assume.

  1. They assume you are familiar with and recognize the value of having intellectual property assets.
  2. They assume you know your competition and have evaluated the risks.
  3. They assume you have taken advantage of all opportunities in your business development process.
  4. They assume you have made the initial investments needed to acquire long term advantages.
  5. They assume you will gain added value for your product since protected products generally obtain higher sale prices.

I haven’t seen every episode of Shark Tank but most of the entrepreneurs presenting products have at least sought, if not obtained, patent protection.  This should be a warning to those who wish to follow in their footsteps, whether that be in a local, regional, or national pitch events. The question of patent protection should be answered and ideally applications filed before pitching a new product. The question that is posed at the pitch stage of business development needs to have been answered very early in the process.

A professional patent researcher can help you answer many of the questions you may have and prepare you for discussions with a patent attorney.  They can help you identify opportunities or obstacles. Opportunities may be commercial opportunities seen with the review of the competitor landscape and opportunities for patent protection. Obstacles may include technical issues raised in similar patent documents or barriers due to existing competitor patents.

Going from an idea to a successful product is a multi-step process and the best business venture decisions are based on solid market and intellectual property research. You wouldn’t want to later find yourself swimming with sharks without a cage.

Chinese US-based Innovation: Is the fox in the hen house?

China’s drive to dominate the electric car industry.

On February 24th, 60 Minutes presented a segment about China’s drive to dominate the electric car industry. There were two things that surprised me in that report, the first was the rapidity of change in China and the second was the means China is using to dominate the electric vehicle (EV) industry. https://www.cbsnews.com/video/electric-cars-chinas-drive-to-dominate-the-industry-60-minutes/

So many images we had seen of China were of a backward, government-controlled society. Cary Huang, in the South China Morning Post in a 2018 article entitled How ‘Communist’ China has embraced capitalism but remains Leninist at heart, noted that though the government remains totalitarian, there is a growing middle class that has accepted capitalistic consumerism. In 2015, Tim Worstall wrote an article in Forbes entitled “China’s the most viciously free market economy on the planet right now. In it Worstall noted, “In China you can change what you’re doing and how you’re doing it at something close to lightning speed compared to Europe or the US. And that’s the sense in which I say that it’s a viciously free market place.” 

Concerning the speed of change, 60 Minutes noted that in just 30 years China has gone from uniformed people riding bicycles to modern cities with people driving cars. The government is now promoting electric car ownership to reduce pollution in urban areas. Reduction of pollution is a much-needed change if you have seen the pictures of pollution hanging over China’s cities. The report presented the electric car manufacturer Nio. Their cars are all made to order, in an automated, high-tech factory by an army of robots. The reported noted that with China’s massive manufacturing machine behind it, Nio may be able scale up faster than its foreign competitors.

 It is how China is going about that change that is more of a concern. Nio has a research and development center in San Jose, California and is one of nine EV manufacturers that have set up similar centers on the west coast so that they can entice the best engineers and software developers. Nio has hired more than 600 of them from top US firms. Holly Williams, of 60 Minutes made the comment “Some people would see that as the transfer of American technology to a Chinese company.” The response of the Nio executive was “I don’t see it that way.” She went on to explain that they look at it from a perspective of market and pollution. Since China has the biggest market and the biggest problem of pollution, they consider it taking the best talent pool and changing the world for the better.

One could applaud such lofty goals, if they weren’t associated with one of the most totalitarian regimes on the planet. Cary Huang noted that “China is now ranked very low in indices relating to political freedom, such as in freedom of speech, association and assembly. For instance, last year it ranked 141 out of 159 in the human freedom index, compiled by the Washington-based Cato Institute, and 176 out of 180 in the index of press freedom by Reporters Without Borders.

In the last 30 years, China has advanced by sending students to Western Universities and to work in Western companies. Less scrupulous methods have included stealing technology or trade secrets as noted in a plethora of articles on espionage. See for example, the Reuters article UPDATE 5-U.S., allies slam China for economic espionage, spies indicted

It appears that today, the more socially and politically acceptable means for quickly acquiring technology and economic advantage is to set up research centers in countries like the United States to hire the best researchers, engineers and computer programmers. It is a brilliant plan since these people no longer need to go live in China to work for a Chinese company. They don’t need to see the cultural differences or suffer the limitations of freedom. They can think that they are solving a world environmental problem and not that they are giving away knowledge that will further the interests of a foreign state.

Anyone who works in intellectual property knows that China has been patenting at an exponential rate. When American engineers and computer programmers have created patents for their Chinese employer, those patents will surely be used against US competitors in a limited monopoly or required licensing. We need industry specific changes that solve cultural and environmental issues but this report left me with serious questions.

Is the US car industry keeping up with the competition? Isn’t there enough innovation happening in the US to employ the “best and the brightest”? Are Americans being lured to foreign companies by short-term gain? Long-term, how will the American EV industry be affected if Chinese companies receive 20 years of patent protection on new technology? How will US entrepreneurs and innovation centers overcome the challenges of competing with Chinese supported research centers?

Start Small, Dream Big

Apple is a great of example of starting small, dreaming big, and scaling fast without losing control. It took many Fortune 100 companies 20, 30, 40 or more years to get where they are. Most did it with a solid patent portfolio based on serious research.

Contact us for assistance in getting your dream to reality.


There are so many questions when you are starting out in business. There are a lot more questions than answers and some subjects like intellectual property are especially difficult. Most colleges do not have a course on the subject and unless you have worked in a large corporation the subject, the “legalese” and the strategies may not make sense. 

Our research can give you answers that will help you develop a strategy for getting the most out of your efforts to protect your business and build your brand.

Taking Patent Research to the Next Level

By DARPA (Defense Advanced Research Projects Agency (DARPA)) [Public domain], via Wikimedia Commons

Today many patent databases are publically available for research or corporate patent portfolio management. The IPO Patent Search Committee has published an article that will give you a quick overview of what is available at little or no cost and how these databases could be used.


Calling All Inventors!

Did you ever wonder if you idea is new? Patents are a great source of technical and competitor information. You may not be a professional researcher but today’s search tools are extremely powerful and easier to use. Check out this review of four leading search tools including Espacenet, Google Patents, PATENTSCOPE, and The Lens.

Patent Searching Using Free Search Tools