Thursday, August 16, 2012
Apple vs. Samsung Cost: $700 million to defend iPhone patents
" Legal fees will cost Apple Inc. $700 million to defend its iPhone patents against Samsung"
Apple-Samsung fight can scare all inventors
Published: Monday, August 13, 2012 at 1:00 a.m.
Legal fees will cost Apple Inc. $700 million to defend its iPhone patents against Samsung, according to a National Public Radio report on July 30. Even if you lop off a couple of zeros, it still costs big bucks for small-business owners to defend their inventions.
The Neustel Law Offices in North Dakota estimates "it is not uncommon for even simple patent-infringement lawsuits to end up costing a company $2 to $5 million." Its website says, "The attorneys' fees alone can put many small businesses out of business."
But few inventors focus on the cost of defending their patents against infringers. Instead, they discover needs in the marketplace and dream up products to fill them.
That is what Sarasota-based inventor Mark Schreiber did. "We make and sell the Aqua Comb, which I invented and designed," he says. The product cleans pool and spa filters. He makes a second version for washing horses, pigs, cows and dogs. Schreiber and his family own Mi-Way Inc.
"One thing one must do when inventing a product is explore other uses for the invention so as to open up the number of markets," he says. He offers third version for beauticians.
Schreiber says that he filed three provisional patent applications, which can cost as little as $125 each. Filing the PPAs sets the filing dates, even though the U.S. Patent and Trademark Office has not yet approved the patents. The final documents then must be filed and perfected within 12 months for the patents to be approved and published by U.S. Patent and Trademark Office.
"I found the USPTO website and patent office staff extremely helpful," Schreiber says. "They encouraged and aided me in filing my patent without the use of a lawyer."
Greg Hunt, a patent lawyer with Jenkins, Wilson, Taylor & Hunt in Durham, N.C., says, "Provisional patent applications are a way to save upfront costs."
But because there are statutory requirements to be met, "we do not recommend filing provisional patent applications without review by an attorney or patent agent."
After filing your PPA inexpensively, you have a 12-month sprint to learn if your product is marketable before spending approximately $8,000 to $10,000 in legal fees to file the final documentation.
Schreiber built a prototype of his product and decided to use distributors as the most expedient sales and marketing vehicle. So he is demonstrating his products at the trade shows distributors attend.
"I decided that I wanted to sell to distributors, so I limited my marketing to trade shows that would put me in contact with distributors both nationally and internationally," he says.
"We subscribe to trade magazines to glean industry news and mine distributor contact information," Schreiber says. He also uses Internet search engines to learn about organizations that sponsor trade shows attended by distributors.
Thomas Register, Manufacturing Extension Partnership and Manufacturers' Agents National Association are online examples at thomasregister.com, mep.nist.gov and manaonline.org.
But when Schreiber's marketing efforts become successful, there will likely be copycats. As a result, he may spend millions of dollars to defend against patent infringers -- albeit less than what Apple is spending in its infringement suit against Samsung.
Jerry Chautin is a local volunteer business counselor with Manasota SCORE, Counselors to America's Small Business. Send business questions and stories to him at email@example.com and follow him on Twitter.com/JerryChautin.