MDH 43 | Small Business Intellectual Property

Patents, trademarks, and copyrights serve to protect intellectual property for your small business. Intellectual property is the ownership of ideas in the legal world. In this episode, Victoria Wieck’s guests are Richard Gearhart, a respected patent attorney and provider of great intellectual property strategies, and Elizabeth Gearhart, the Chief Marketing Officer at Gearhart Law. Richard and Elizabeth talk with Victoria about how the first step to determining when to use patents, trademarks, and copyrights is to consult with an intellectual property professional. Make sure to get confidentiality agreements while you’re at it. Want to learn more? Tune in!

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Patents, Trademarks And Copyrights: How To Protect Your Small Business’ Intellectual Property With Richard & Elizabeth Gearhart

I’m so delighted because some of the questions I’ve always had and struggled with in my entrepreneurship journey have to do with protecting my ideas, my business, and what we call intellectual property. I know that sounds like a scary term, but it’s not. I have the perfect guests who can unravel all of that and unlock the secrets to making sure that your hard work is protected.

I have Richard and Elizabeth. They’re a married couple. They have been married for many years and that already tells you something why these people are saints other than being super smart people. Richard is a very respected Patent Attorney. His wife Elizabeth is the Chief Marketing Officer. She does a lot of things behind the scenes to help Richard’s clients as well. Without further ado, I want to introduce Richard and Elizabeth. Welcome to the show.

Thank you.

Thank you, Victoria.

You founded your law firm several years ago. Did you work for other people or you get out of school and founded it? How did it happen?

MDH 43 | Small Business Intellectual Property

Small Business Intellectual Property: The goal now is to help others escape from jobs they don’t like and start their own businesses.

 

I worked in big corporations. I was the Head of Intellectual Property for Novartis. I didn’t like the corporate lifestyle. I got some great training. I worked with some good people, but I didn’t want to spend my entire career working for somebody else. A break in the action happened at Novartis. Elizabeth said, “Why don’t you go out and start your own law firm?” I thought she was nuts. It turned out that it was the best decision I ever made in my life. I’ve been having a blast ever since then. That’s my story. My goal is to help other people escape from jobs that they don’t like and start their businesses.

I stupidly said, “I’ll do whatever you need me to do to make your firm successful.”

First of all, I know all of you probably heard a lot of different things in that very short intro that Richard escaped. What I got out of it is that behind every successful man, there is a woman kicking his ass. You worked in corporate and you didn’t love the lifestyle. You felt that you could impact more people more directly by going on on your own. It took Elizabeth to convince you to do that.

I had never thought of being an entrepreneur. When I was growing up, the way somebody became successful was to claw their way to the top of a corporation, which I did. By the same token, that came with a lot of stress and a lot of personal ethical compromises that made my life less fulfilling. Elizabeth thought that if I started my law firm, I could be more my person. It would be easier to be around because, let’s face it, you carry that stress with you wherever you go.

If you work at a corporation by the time you’re in your mid-fifties, you’re at a huge risk of losing your job.

She didn’t want to move the kids again if I took another corporate job and I ended up in some other part of the country. We didn’t want to move the family. That’s what was behind it. She always said she knew I would never fail because she knew that I was driven and determined. Having a family to support is a lot of responsibility.

It felt like a huge risk. We were in our 40s. If you work at a corporation by the time you’re in your mid-50s, you are at a huge risk of losing your job. Starting your own thing in your 40s, so that you have something when you’re in your 50s, I think it was important for us. I feel like it was almost less of a risk to start his own thing than to try to stay in corporate.

Those of you who might wonder about this. I completely agree with you on everything you said so far about the risk. Sometimes we think it’s safer to stay in a corporation. In my experience, not ever taking a risk and taking the safe route could be the most dangerous thing. You did more than practice law. Since you opened your law firm, you have been helping people deal with intellectual property.

It’s important for people to understand all the different parts of intellectual property, which I don’t understand very well, so I have you here. Also, I deal with a lot of attorneys because I have a lot of intellectual property to protect. You’re one of the few law firms that helps your clients succeed. You have a radio show called Passage to Profit, which I’ve been on as a guest. You also have another show called Fireside, where your clients can come on the show, promote their products and you highlight what they do to help their clients, which makes the world a beautiful place.

You might want to check out Passage to Profit, which is on iHeartRadio and GearhartLaw.com. If you’re entrepreneurial, you definitely want to check them out because even if you don’t think you have anything worth protecting, there are so many things that they’re doing to help everybody that I think is worth checking out. Let’s dive into the intellectual property itself. This question is directed you, the attorney, Richard. How would you define intellectual property? It’s a very vague and scary term.

Intellectual property is the law of ideas. Just like you would have a deed to your house that defines the ownership of the land and the house, intellectual property is the ownership of ideas. In the legal world, they refer to ownership of property as real property. In the legal world, we refer to the ownership of ideas as intellectual property. There are four different basic types of intellectual property. There are patents, trademarks, copyrights, and trade secrets.

Patents protect ideas related to technology. They protect the inventions. If it’s a new mousetrap, car tire, or a tangible thing, that technology is protected with a patent. Trademarks protect business names. They call them source identifiers, which may sound a little confusing. The point is that they exist, so that when you go to buy a bottle of Coca-Cola, for example, you know that bottle of Cola was made by the Coca-Cola Bottling Company. Trademark serves to identify the source of the goods, so you know that it has a certain quality or characteristic.

The third category is copyrights. Copyrights protect original works of expression. Music, art, sculpture, architectural drawings, literature, all of those movies, all of those things are protected by copyrights. The fourth category is trade secrets. Trade secrets are secrets that a company has that give them a competitive advantage. It’s information that’s kept secret within the company. Lots of times, you may see things like documents marked confidential or whatever. You can protect the confidential information of the company through trade secrets. Those are the four types of intellectual property.

MDH 43 | Small Business Intellectual Property

Small Business Intellectual Property: If you’re looking for larger sales volumes, then investing in a patent makes more sense.

 

For a small business entrepreneur, this is a lot of information you unpacked. Thank you so much for doing that. We know now. A lot of times, I’ll go have lunch with somebody or I’ll give a speech, people would come up to me afterward and they’ll ask me things like, “I want to apply for a new patent on my new whatever. Do I need an attorney?”

With the limited knowledge I have about patent law, I knew right away there are a lot of the things that they’re talking about are more copyrights and not patents type things. It’s interesting that patents had to do with primarily new inventions or a new way of doing something or making something. When you said copyrights protect original works of art, such as sculptures and music, I copyrighted both of my books and a lot of my design work for jewelry designs.

Copyrights are not that expensive. It’s something that can be done easily. I would assume that trademarks and patents can go up to quite a bit of money. Do you have any idea? I also understand that it has to do with the complexity of the project and whether or not you get into some pushback by other competitors.

Intellectual property is the ownership of ideas in the legal world.

There’s a lot of considerations. For example, at Gearhart Law, we charge flat fees for everything and it’s a pay-as-you-go service. A utility patent is a patent that protects a concept. For example, if you were to want to patent a desk, you would patent the concept of a desk. You would have different sides, tabletop, you would have drawers, no drawers, different materials, plastic glass, wood, L-shape top, oval top. The idea is to protect as many variations on the concept as you can.

There’s another type of patent that’s called a design patent, where you only protect exactly what is shown in the drawing. It’s a very specific embodiment and specific view. It’s almost like taking a photograph and sending it into the patent office. Those two different types of patents have different levels of protection. They have different costs associated with them.

The utility patent, for example, might cost $15,000 to $20,000 from start to finish, spread out over 3 or 4 years. The design patent might cost between $2,000 and $3,000 from start to finish, including all costs. There are advantages and disadvantages to both. That’s why you need to contact the professional who can discuss it with you and recommend the best protection for your project.

If you’re starting out on an entrepreneurship journey and you had a new business idea, at what point do you think that they should be looking for intellectual property protection of any kind? I have a way you can decorate an Apple iWatch case. You find a lot of phone cases, but you don’t find a lot of iWatch cases because every time you put a metal around the piece where you can put jewelry pieces, it will negate your Bluetooth and all the functions. You have to get around the metal piece of it and all that. I designed it.

In that case, I have a design patent. I have a patent pending. I have trademarks for that particular brand and copyright for the design. I believe in the product. I went after all of that. I assume that in some things, you can get all of them, like copyrights design. For an entrepreneur, who doesn’t have a lot of money, they don’t know if it’s going to be marketable or not what would you suggest that they start with?

The first thing they should start with is a discussion with an intellectual property professional. After that, usually what we do as a search. We want to find out if there are other things out there that are similar to your invention. That’s very important both from a patent and a trademark perspective because somebody else might have a patent that could block you. You want to find that out as soon as possible, then your options are to change your design to avoid the other person’s patent or get a license from that person which may be attainable or it may not.

You need to do a search and you need to see what other intellectual property is owned by others. For us, about a third of the projects that we researched, we have to tell the client, “If there’s something out there that’s too close, we can’t move forward with this because you’re going to get in trouble from some other company.” Assuming that you get past the search phase, then you have to decide when the project is mature enough that it makes sense to invest in the intellectual property? That’s an art. It’s not necessarily a science.

Once you understand what your budget is, you understand what all your costs are for moving the project forward, then having at least a little sense of what the total sales potential is you can then make decisions about the intellectual property. For example, if you’re selling a niche product and you think that the value of the sales is going to only be $250,000 to $300,000 a year, then maybe spending the money on the patent is more questionable. If you’re looking for larger sales volumes, then investing in a patent may make more sense.

MDH 43 | Small Business Intellectual Property

Small Business Intellectual Property: It’s important for legal reasons to get confidentiality agreements with the people you talk with.

 

You have to remember that the value of the patent is not only running out and suing somebody. If they copy your idea, that’s what people think. The value of the patent also puts other people on notice. Other people who are having searches done find your patent and that discourages them from entering the market.

Even if it’s only for six months, if you have $100,000 a month in sales and you invest $20,000 a month in your patent, in those six months, that will keep you dominant in the market. You might earn $500,000 worth of sales based on a $20,000 investment. It’s not that you would necessarily even sue them, but you keep the competition at bay. That’s one of the values of intellectual property that people don’t often realize.

I have my startup called Fireside.Directory and I have a logo. The first thing I did was have one of our attorneys at Gearhart Law do a trademark search on Fireside.Directory. They didn’t look for the exact words. They looked at things that would be close to the category I’m using it in. It was clear. I started using it. With trademarks, you get some protection from when you start using them, but we have filed for trademark protection.

I’ve learned that a very famous person is going to use Fireside for something kind of similar, that’s going to be pretty interesting. I’ve been working on this and having Richard help me. The two of us have brainstormed a lot of ideas that are patentable. I haven’t told anybody what they are. I’m on a patent age, and I’m almost done drafting that patent. I’ll have one of our experts at Gearhart Law finish it for me because I haven’t done a patent for a long time. I think that if your service business, especially a trademark, can be important. We have a client that’s in litigation for millions of dollars over a trademark.

A utility patent is a patent that protects a concept.

I think that intellectual property is something that if we could afford it, in an ideal world, you want to all have that. As Richard explained, a lot of times, it’s an ROI. It’s a return on your investment in some cases. Beginning entrepreneurs don’t know in the beginning what’s possible and all that. That leads me to my next question, which is to be directed to you, Elizabeth.

I know that you are more of a driving force behind Passage to Profit. I find that to be fascinating because you’re not doing law. You’re helping your clients get more traction, get more clarity which might even help the intellectual property part of that too, because you’re using it more out there. It’s more of a deterrent. How did you conceive that show and what’s your goal there? What’s your home run situation with that show?

There was somebody we networked with in New York named Kenya Gipson with iHeart. She broached the show to me over champagne in New York. I brought the idea home to Richard. I’ve been on radio before, and he liked it. We got a lot of pushbacks from a lot of people we knew who said it was not the best way to spend money, not a good idea. We wanted to do it anyway. We felt like it was a real place for us to showcase our clients, and we have a whole social media effort around it.

We felt like it was a way to push positive and negative experiences because we do ask people their challenges about entrepreneurism out into the world. The normal person listening could understand what they might have to go through if they decided to start a business. Our goal is to help as many people succeed using whatever they can from Gearhart Law, but also using the promotion and the advice I get from people like you on our radio show.

I was a guest on the show and the first thing I noticed was how authentic you two are as people. You take all the attorney, the law firm, the chief marketing officer hat off. It’s a lot of fun, but you’re also providing some serious content around that. I also love what you said, which is not only success stories, but I’m a firm believer that we learn so much more from failures. Especially, the ones like you almost make it. My kids played competitive tennis, USTA National level tennis. In a lot of those close matches, you lose over like 5 or 6 points. It comes down to how those kids play those critical moments and points.

When you win over somebody 6-0, 6-0, you don’t learn much. You hardly get an exercise. When you have a deuce forever and then you finally lose it, those are the things that shape you. I feel like bringing guests on where they’re talking about there are challenges in the past and current because you will always have challenges when you’re in business, as you might know, I think that’s doing a lot of services. I commend you for doing that. Being married to a top-notch attorney, you could stay at home and keep on drinking champagne all day long.

I think that’s great. I want to be a part of that. I was glad that you invited me to your show. I work with a lot of entrepreneurs. In fact, I am the co-director of the Global Society of Female Entrepreneurs. That’s why I invited you to my show because the one thing I do get a lot is surrounding the patent and intellectual property law. I wish I had found you many years ago because almost every one of my designs is an original design. There are like 70,000 people out there in the world making money off of my designs. They’re knocking you off here and there.

As Richard said earlier, it’s not only about suing people, but it will deter some of the bigger companies from knocking you off. If you are a little mom-and-pop in China and you don’t understand the law yourself and you can knock my designs off, they’re not going to have that much of an impact. Whereas if a major company did that, they’ll do a search like we’re doing a search and it deters them.

Your practice and Elizabeth, you are a force behind marketing your services and also helping your entrepreneurial clients to market their services. That’s an exceptional above and beyond. I want to thank you for doing that. Anything that I didn’t cover about intellectual property? That’s a thing you can probably talk about for the next year. I don’t have the year.

I would say one other thing is that make sure you get confidentiality agreements with the people that you talk with. There are legal reasons for doing that. There are also other reasons, the business relationship reasons. Before you spill the beans about your project, you need to make sure that you have a non-disclosure agreement or confidentiality agreement, something in place to make sure that they don’t run off with it. It happens. I can’t tell you how many times I’ve had clients say to me that they went and they talked to somebody and I said, “Did you file a patent?” “No.” “Did you have a confidentiality agreement?” “No.” “There’s not much I can do to protect your interests if you don’t have that agreement.”

The other thing too is that you lose your rights in Europe if you tell somebody your whole idea without a confidentiality agreement.

I’m so glad you both mentioned this because the one thing I do is I get approached a lot because I’ve been on TV for many years and have done quite a bit of business myself. I have incredible contacts. Every single CEO that went through HSN since 1998, I’ve been personal friends with. Many people want to tell me their idea.

They’ll say, “I have a great idea. I haven’t told anyone.” I tell them, “Stop. Don’t tell me anything, because I don’t want to know. I don’t want to be at the receiving of a lawsuit if you tell me something and you tell six other people and somehow that product gets on the market.” That has happened to me many times where I would tell somebody, “Go get your intellectual property secured before you talk to me because I don’t want to know anything about it.”

Especially if they’re jewelers, I don’t want to know because I may be working on the same thing and we’re all on the same journey. Sometimes as a receiver of information, you also have to protect your rights. My children’s SAT coach, whenever it was like a holiday or something she would give us boxes of cookies. The woman didn’t know how to bake, but she knew how to decorate them. It’s really cool the way she does this. It’s sugar and water and she has a way of doing it. She wanted me to help her get on QVC or whatever.

I said, “I don’t want to know how you do it.” She told me it was sugar and water. That’s all that was. I told her, “I don’t want to know anything about it. Get your intellectual property secured. I don’t want to sign an NDA because I don’t know what I’m signing off. Until you get that signed, I don’t want to talk about it. I don’t want to hear it.”

MDH 43 | Small Business Intellectual Property

Small Business Intellectual Property: We’re always open to helping any group that would like to receive information on intellectual law.

 

That product was on HSN three months later. I can tell you, by the time HSN gets something like that on, it’s usually a year. It takes you like six months to get a vendor number. Whoever was doing it at the other end probably had it already. Meaning that there are multiple people that are doing it. It’s a machine. These other people invented the machine. There was all this other stuff.

Non-disclosure agreements are the first step. Lastly, I want to ask you a question. I’m going to challenge you guys. I’ve never done this before to anybody, but you guys seem so down to earth, I’m going to do it anyway. Have you ever thought about giving like a free webinar or a seminar? This is what I do on my show. What I do is I take six different key factors that I felt like I needed that every entrepreneur needs to master before they can build a business empire.

I went from 0 to $500 million with no advertising. Basically, storytelling is one of them. There are six key pillars that you do have to master to be able to do this as an entrepreneur with no money. What I do is I pick one topic once a month, because we’re all busy. We don’t have time to do endless free webinars. I’ll do like a storytelling mastery. I’ll limit it to like 50 people, where I’ll do a free webinar for 45 minutes.

Next month, I might be doing how to build a proper website because a lot of people, their websites are there but a proper website will generate money for you no matter what you’re doing 24/7. I’m repeating storytelling like once every six months. Obviously, if you’re doing intellectual law, you’re not going to be able to help them with everything you do. There’s a lot of information there that they’re going to get for free. Have you thought about doing something like that or would you consider something like that?

No. A lot of our team members give many presentations to a wide variety of sources. We’re always open to helping any group that would like to receive that information. We’ve presented in Inventors Associations. We don’t necessarily set up the webinars, but we have, for example, meetup groups with probably close to 5,000 meetup people and members. We give seminars monthly. We get good attendance. I love speaking about intellectual property. I’m happy to do it anytime and I’ve never charged for my time to do it.

If people wanted to connect with you for those, they still go to GearhartLaw.com.

We have the links there. You’d have to join one of the meetups. We’re rebranding the meetups because it used to be a global intellectual property business meetup, but we’re gearing it more towards general innovation and having different topics. We’ll have the name of the new branded meetup on our website. That’s a great idea.

Thank you so much for coming and it’s been so delightful having the two of you there. You guys are trailblazers because I don’t normally interview two people at the same time. In fact, you are the first one, because it’s hard to interview more than one person at a time. Especially topics like yours, which is a very focused topic. You broke new ground there.

You get protection when you start doing trademarks.

Thank you, Victoria. We look forward to having you on Passage to Profit, again too.

Everybody, go to Gearhart Law. You’ll be literally absolutely amazed at the type of clients they’ve had so far. They are passionate about helping entrepreneurs and small entrepreneurs. A lot of them are the household brands that you will recognize. They’re very humble people here. You’ll find an incredible amazing diversity of the types of clients you’ve helped. You’ve got food, pharmaceuticals to small service businesses, you name it. Whatever your challenges are, connect with them.

You’ll get free information. Quite a bit of it will be free before you spend the money. That’s a great thing. Secondly, they are probably the most down to earth like real, approachable lawyers. When I think about lawyers and doctors, they’re very scary. I always think twice about whenever I have to go to a doctor.

I know so many people in my age group that don’t go for a routine checkup. They’ll go, “You have prostate cancer or whatever. Don’t worry, it’s the beginning stages,” or something like that. Whenever I get a call from one of my lawyers, it’s the same thing. It’s like, “Are we getting sued or something?” We haven’t been sued, by the way, ever. Go to GearhartLaw.com. You can always check out Passage to Profit podcast on iHeart radio. Thank you so much for reading. Don’t forget to subscribe, rate and review the show. Thank you, Richard and Elizabeth, for making time. I’ll talk to you soon. Until next time.

Thank you.

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About Richard Gearhart

MDH 43 | Small Business Intellectual Property

Richard is the founder of Gearhart Law and the host of a weekly radio show for entrepreneurs called “Passage to Profit”.  He has built a firm with an international presence that helps entrepreneurs from around the world with their patent, trademark and copyright needs.

Richard commands a breadth of experience that comes from nearly 30 years of practice in the writing and prosecution of hundreds of patents, and in all aspects of Intellectual Property law.

Gearhart Law emerged from Richard’s passion for entrepreneurship and startups and his belief that entrepreneurship grows the economy and creates jobs. When we started Gearhart Law, our goal was to help and support the new business ventures of 500 entrepreneurs and inventors. After 12 years, the firm has far surpassed this goal; today, we look forward to helping even more inventors and entrepreneurs get off to a great start and reach their own goals.

Richard formerly headed the U.S. Patent and Trademark group for Novartis Pharmaceuticals Corporation. While at Novartis, Richard oversaw over 40 patent and trademark attorneys and managed global litigation and patent prosecution. He managed numerous product development activities and participated in extensive transactional and opinion work globally.

Richard previously served as General Patent Counsel at CIBA Vision Corporation, where he oversaw the activities of 9 patent attorneys, and actively managed U.S. and global patent litigation, as well as patent prosecution and opinions. Richard successfully initiated and managed the case of Wesley Jessen Corp v. Bausch & Lomb, Inc. which led to an injunction against one of CIBA Vision’s major competitors, and the removal of an infringing product from the market.

Before taking the helm at CIBA Vision, Richard worked at Dow Corning Corporation as Senior Managing Counsel, and prior to that worked in private practice at the Geneva, Switzerland office of the international law firm of Jones, Day.

Richard graduated from Knox College with a BA in Chemistry. He received his J.D. from Case Western Reserve University, and subsequently obtained a DES in International Law from the Graduate Institute of International Studies, in Geneva, Switzerland. He is registered to practice at the U.S. Patent and Trademark Office, and admitted to practice in the states of New Jersey, Michigan and Massachusetts.

About Elizabeth Gearhart

I’ve recently launched Fireside, a video directory of businesses. I’m inviting any business owners who would like to shoot a short Zoom interview video with me for inclusion on the site to message me. The video and listing are free for 2020 due to the current economic conditions. You can schedule an interview with me through calendly at: https://fireside.directory/contact-us/

I’m also a patent agent and Chief Marketing Officer at Gearhart Law, and co-host of Passage to Profit, a radio show that premiered on iHeart Radio at 8pm on Sunday July 29, 2018. It’s also a podcast which can be found on iHeart and the other major podcast platforms. The show is for entrepreneurs and each week we feature an interview with an accomplished business person followed by presentations by three entrepreneurs. We normally tape the show in the iHeart studios in Manhattan, but are on hiatus for now. As soon as we can get back into the studio we’ll be taping new shows every other Wednesday. You can message me if you’re interested in being on the show, it’s sponsored by Gearhart Law and so is free for the presenters.

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