371: What product managers need to know about IP – with Rich Goldstein

The value of patents and trademarks for product managers Today we are talking about what product managers and leaders should know about intellectual property (IP) protection. Some organizations have a robust IP protection system that is part of their product management and development process while IP is an afterthought for others. What do you need to know about IP?  Let’s find out. Helping us is Rich Goldstein—a patent attorney, entrepreneur, author, and speaker who helps people protect and capitalize on their valuable ideas. He also authored the American Bar Association’s book on IP titled The ABA Consumer Guide to Obtaining a Patent. He originally studied electrical engineering at Stony Brook in New York, a highly rated engineering school. Summary of some concepts discussed for product managers [4:48] What IP protection mechanisms should product professionals know about? * Patents protect products * Copyright protects content * Trademarks protect branding [7:13] When are trade secrets useful? A trade secret isn’t something you file for. You just have to keep it secret. Trade secrets are appropriate for products that cannot be reverse-engineered, like Coca-Cola’s secret formula or data used within an artificial intelligence system. Patents are useful for products that are out in the open, like the components of a physical product. [12:51] What is the value of protecting IP? IP protection is valuable when your company would be hurt economically or offended if your competition were to copy your IP. In general, there are two reasons for patenting or trademarking something. First, IP protection can help you while your company is operating. You can slow down your competition and hold on to market share. Second, IP is valuable when your company is acquired. The entity acquiring your company can’t do what you’re doing without your IP, so they’re willing to pay much more. During operation, you determine whether IP is worth it based on how much revenue you’ll gain vs. how much the IP costs, but if you get all the way to exit, you will always get a huge ROI on whatever you spend on IP. You can also leverage IP for licensing. [16:56] How much do trademarks and patents cost? Trademarks cost a lot less than patents. Generally, U.S. domestic trademarks are a few thousand dollars, while domestic patents are tens of thousands. International trademarks and patents cost more. [19:00] What can product managers do to help with IP protection for new products? Look for product differentiation that you can keep exclusive. If you can differentiate your product in a way your competition cannot because you own the IP, you have an advantage. It’s gold if you can find features in the overlap between what’s patentable and what’s marketable. If your customers want it and your competitors can’t make it, they won’t even want to compete. [22:03] At what point in time should product managers be thinking about IP? In much of the world, it’s too late to apply for a patent after you’ve made the product public. In the U.S., you can file for a patent up to one year after you make the product public. You don’t lose the rights to file a trademark after you’ve used the name publicly, but if someone else files a trademark on the same name earlier than you do, you have a complicated and expensive situation. You should apply for a patent at the earliest point you have something valuable. Then follow-up as improvements are made. For example, if you have an idea to create a non-toxic cleaning product, that’s an aspiration, not something valuable. But if you find a plant extract that can break down grease that no one has ever talked about before, that’s unique and valuable. Even if you don’t know the exact formula for your pr...