Posted by Blake Pachner | September 3, 2015
Bottom line, the comment that resonated with me the most was, ‘The patent I write for you is only as good as how much you are willing to spend to defend it’.Jerry Scarrow, Inventor/Owner, Butter Bay
In Chapters One and Two of the Butter Bay story, we explored the launch of the Butter Bay and how inventor, Jerry Scarrow, came up with his idea. In Chapter Three, we followed Jerry’s product design & development journey with the TechHelp New Product Development (NPD) Team at Boise State. In Chapter Four, we examined Jerry’s transition from design & prototyping to manufacturing. This video at thebutterbay.com does a great job of describing Jerry’s manufacturing journey that led to Ohio.
Upon completion of my first crude prototype of the Butter Bay, my initial intentions were to patent my idea and go to the leader in the space, Butter Bell or Norpro, and offer to sell it to them or compete against them. My concern was that without a patent they would just take my idea and make their own with my design. Given their strong and established place in the market, I thought they would end my business before it even got off the ground. I was told early on by a trusted source that the idea was “cool” enough that it was only a matter of “when” not “if” it was knocked off by a Chinese manufacturer.
What Jerry Learned
I consulted three highly regarded patent attorneys in Boise’s Treasure Valley. All three felt that my Butter Bay idea did not pass the non-obvious clause of patent law. One of the three also found some prior art from a small ceramic studio blog based in Oregon. They believed that we could work around the prior art issue due to time statutes but felt the non-obviousness would be very difficult to overcome. All three attorneys said they could spend my money but the patent they would write would be so broad it would be very easy to design around to make it essentially worthless.
The comment that resonated with me the most was “The patent I write for you is only as good as how much you are willing to spend to defend it”.
All three suggested I put my money into a good trademark and get the product to market as soon as possible to build brand awareness and loyalty. This information helped us decide to forgo patenting and move ahead with a trademark and logo branding.
What Jerry Decided to Do
It became apparent that the best way to develop the profit potential of my idea was to “build a brand” and get it to market fast. I brainstormed with friends and family and thought about lots of different names before moving ahead with Butter Basin. This was my first major mistake that cost me money. I never dreamed for a second that the name “Butter Basin” could not be trademarked. Unfortunately, this turned out to be the case and resulted in $9,000 worth of “Butter Basin” boxes going to the cardboard recycle plant. We regrouped and found a name that could be trademarked “Butter Bay”.
We re-branded as Butter Bay with the same logo and got to market as quickly as possible. Today, we are selling on Amazon and on our website at thebutterbay.com . We are being carried in 16 kitchen stores in the West and hope to be in 50 retailers by Christmas of 2015.
In the beginning, my fear was that the big dog in the market, Butter Bell, would just knock us off. Today, I don’t believe they will try to do that. They have a major brand following as Butter Bell where the bell shape creates their brand identification. They would lose that brand ID if they chose to copy our shape. If the Butter Bay continues to gain traction in the market, I would anticipate that a Norpro-like company will have it copied in China and sell it under their umbrella of kitchen products. We may add the term “Original” to our name (as Butter Bell has) to help consumers know we were the first major cube shaped product in the market.
Of course, another thing that makes the Butter Bay unique is that it is MADE IN THE USA; handcrafted and fired in East Liverpool, Ohio, by American Mug and Stein.
Two Cents from Paul Cooperrider, Statewide Tech Commercialization Director at the Idaho Small Business Development Center
One other thing to consider in the IP category is that while we felt there was little to protect from a Utility Patent standpoint, there may be some IP that can be created from a Design Patent standpoint. By itself, the Design Patent will not afford much protection, but in combination with a strong trademark and an effective marketing campaign that gets solid market penetration, it can be another weapon in the arsenal to build and protect the brand.
IP Observations of Steve Hatten, Founder of the New Product Development Lab at Boise State and Executive Director of TechHelp
The conversation about IP in the NPD Lab normally starts with an understanding of what IP is already out there. Many clients benefit from some basic practice in searching for IP at the USPTO or Google Patents websites. A lot of learning takes place during a simple patent search:
- What is the technical jargon used in the industry?
- Who are are the key individuals and players with IP?
- What types of products are envisioned where the IP is used?
Insight can be gained into gaps that might exist relative to market needs where there appears not to be any IP? Since we are not experts in patent searching, we normally give a little basic coaching, then let clients do the work themselves. Generally, we advise them that for a few hundred dollars they can get professional patent searching assistance.
Simple web patent searching can yield other benefits. Learning the common technical jargon can be useful for finding other web content, about (potential) competing products already on the market. Many clients who were sure there was “nothing on the market like it” have used this process to rethink their IP strategy, business strategy, product and its value proposition, or to pivot in an entirely new direction.
For a client like Jerry, where a utility patent is unlikely, we generally encourage the client to contemplate and get advice as to whether any other IP is of value. The SBDC has been a really great resource for referring clients to get some excellent insight into this question before engaging an IP professional.
Observations of an IP Professional, Bradlee R. Frazer, Partner at the law firm of Hawley Troxell in Boise, Idaho
As a preliminary matter, know that I will happily offer clients a liberal free initial consultation. This has several benefits. One is that any “bad news” I find is protected by the attorney-client privilege, even for that work done under the free consultation. Conversely, research performed independently by the inventor—research which would suggest an alternative course of action–that is ignored by the inventor, i.e., the inventor proceeds even in the face of possible infringement liability, is not so protected and is thus discoverable in litigation if an allegation of willful infringement is made.
“Intellectual property is like found money!” This is what I most often tell inventors and entrepreneurs who approach me as an IP lawyer to get advice on how to protect their idea or invention. The application of a few basic principles well BEFORE launch can take an idea—with no products, no prototypes, not even a single line of code—and create a foundation to generate considerable revenue.
At a very high level, these principles are summarized into five steps: (1) Form an entity; (2) Identify the IP; (3) Own the IP; (4) Protect the IP; and (then and only then) (5) Monetize the IP. For a more detailed explanation see my Five Steps video at https://www.youtube.com/watch?v=0070uEwzvdg. Those who try to jump right to Step #5 are leaving money on the table. It is also critical to remember that your idea is subject to theft leaving you with nothing to monetize. Liberal and consistent use of Non-Disclosure Agreements and timely patent applications can do much to give you remedies against misappropriation while you follow the five steps.