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Originally Posted by MonsterMaxx
OK, my take on this whole patent infringement and China rip offs.
Keeping the products out of their hands is impossible. I personally witnessed a Chinese man going around a major race taking photos and video of innovative products with a high end camera. Shortly thereafter many of those products were offered thru known Chinese companies like Integy.
Yes, I have a patent and yes it has been infringed, no, there was nothing I could afford to do about it.
IMHO a patent for a small business in the US is really only good for marketing. You can NOT afford to enforce it.
As Mike probably knows, the patent itself costs $5-$20k and often takes 3+ years for approval. So there’s your first expense.
Next is the changes our good buddy Obama has pushed into law. That is ‘first to file gets the patent’. This is hugely disadvantageous to small businesses who have often put everything into R&D and can’t yet afford the legal fees for a patent. First to file means that if anyone catches wind of your project, they can go file for a patent having never even produced one item and exclude YOU from making it. Let them get their hands on it and they’ll use YOUR item for their patent application.
This is fine for big companies like Apple with teams of lawyers and dedicated testing personnel, but is NOT advantageous to small businesses.
It used to be that you had a year from your first public debut, that is no longer the case.
Now, what you can do once you get your patent. (Remember, you’ve probably already have spent $20k and have to include that in your product price, which China is likely already undercutting.)
Stop them at the US border. This is an ITC filing. What you do is hand your lawyer aprox $50k and they do a fast track filing with the ITC. Normally this can be completed in 6-12 months and the cost doesn’t usually exceed $100k. Once you win (if you win) customs will stop importation at the border.
There is NO financial recourse with an ITC filing, you only stop them at the border. Also, it’s YOUR responsibility to monitor the market and catch other importers using different channels and part numbers and descriptions. Of course, every time the copy cats take a different route, you have to catch them, give your lawyer the info and more $$ and wait for enforcement.
Fun right?
Now, next is you want to go after the company who is making these clones for real money. They are overseas, right. Get your big checkbook out, ‘cause the lawyer is going to want a $100k retainer and the total bill will be over $250k. Plan for a long fight with lots and lots of extra expenses.
You are suing a Chinese company? Good luck. First off, China does not respect US patents. So, no US physical presence, no chance of any $. Even if by some miracle you manage to win, you’ll never collect. Sueing in Chinese court, there’s a waste of time. A US company will NEVER win in Chinese Kangraoo court. Also to remember, many Chinese companies are supplemented by the Chinese government (reference Chinese solar panel industry which under cut prices by a huge margin and drove US companies like Solydara out of business.) Yea, basically you are suing the Chinese government.
You are wasting your money. Might as well take a truckload of $100 bills and use them for fancy toilet paper at parties. At least your friends would get some satisfaction.
Bottom line, IMHO, for a small business with limited resources and a limited product exposure (say under a million units) a patent is nice marketing ploy but is way to expensive to enforce. Because at the end of the day, the only income you have off that item is your net profit. If you have to roll $300k+ into your prices no consumer will buy it, they will buy the copy that’s now 1/10th the cost.
Nice product Mike, shame that the US govt is so in bed with big business and China that this kind of thing happens. But frankly, there’s not a darn thing you can do but biotch and complain and lose sleep.
My advise to you would be to write some threatening letters, but if they tell you to piss off or ignore you don’t lose any sleep or spend any more $.
Is what it is.
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Kind of sad, but kind of true. March will be three years since I filed for the patent - in the home stretch now(making some minor tweaks to the drawings for the gov't), but I still am technically "pending". It was cloned before I broke even on the part, too. Next time there won't be a next time. I largely feel like I spent a couple years development and testing and $15k+ for someone else to make the money. It totally sucks and I have lost some sleep, but I won't soon spend that kind of time and energy again unless I have some $$backing$$. I could go broke trying to be innovative!