 I'm very happy to introduce our speaker. Mando Kunar has spoken on a number of occasions in our College of Science and Engineering dating back two years, three years, two years, two years on a number of different topics, all of which are, I think, related very closely or peripherally to value creation. And value creation in this context, I mean engineering products, engineering solutions, and various aspects. Today's focus is on intellectual property patents. This is an area that I think has interested our students in the past, primarily those who have seen entrepreneurial activities or new product creation here in Armenia and looking at global markets as a hopeful direction or a current direction. And then some of you are involved in such a thing. Even if you're not, I think it's great to hear at first hand from someone with many years of experience in actually many different high tech and engineering sectors and leading companies and someone who has directly undergone this process of patent application successfully in the US and is currently involved in projects here in Armenia. I don't know if our flyer is in front of me to list his background, but maybe he can take a minute and introduce some of those highlights himself on where Mr. Kunar has worked and what kind of experiences he's drawing upon. Because I think it's very relevant and very interesting. So without further introduction, welcome all of you to our College of International Engineering seminar and Mr. Kunar. My name is Randall Kunar, and I'm an American Armenian living in Los Angeles, second generation of Armenians. So my Armenian isn't too good. I spent 20 years at Rayfiel, which is one of the top aerospace companies in the United States, military and industrial aerospace. And so that's primarily where most of my experiences, although I haven't worked at other companies in the medical and commercial engineering area. So what I wanted to do today was talk to you about intellectual property and patents. Compare it a little bit with what's happening in Armenia, but primarily I'm going to talk about how it's done in the United States. The reason I'm talking about primarily the United States is because that's where the money is. If you want to make, if you have an invention and you want to make money, unfortunately, you're not going to make a lot of money in Armenia because the market's small here. So if you want to make money, you're going to have to go to the United States and get a patent there. So we're going to concentrate on that, and we'll talk a little bit about Europe and Russia and Armenia in terms of the patents. OK, definition of intellectual property. You can see what comes out of your brain, what's out of your mind, what invention do you have, what have you thought of that's different, something that's tangible, something that can be used for a valuable product. These different types of intellectual property you can see here in the technical data and software also, but we're primarily going to talk about hardware, although there's not that much difference when you're talking about software. There are some differences. Companies' intellectual property is what's most important for your competitive advantage, not the technology, the intellectual property itself. We're going to talk about that a little bit more. What's going on? All right, kind of here is what we're going to go through real quick. I thought I had to go over to the table for you. We'll step through each one of these areas. Here's something that was taken out of the economists in 2006. There's two ways to grow. Through mergers and acquisitions or through innovation. So we're going to talk about innovation. Mergers and acquisitions, that's for the lawyers. That doesn't bring value. That doesn't create new jobs. We're talking about innovation, technology, and creating new jobs. Here's another quote with regard to the British companies falling behind, so there's a concern in England. OK, why do you want to protect intellectual property? You want to protect your innovation? And if you can't protect it, why are you investing in it? If you're investing your time and your money into coming up with a new invention, if you're not going to protect it, why are you doing it? Somebody will steal it. I guarantee you the Chinese will, because they don't value intellectual property in that country, it's a major problem or one. So you've got piracy, counterfeiting, unfair competition. Patent conveys the right to exclude others. Now what that means is, when you get a patent, there's no guarantee that anybody, no one, will steal it. You get a patent, somebody's going to want to steal it anyway. The only thing that the patent does is allows you to sue them and try to recover from them whatever money you can get out of them. That's it. There's no other protection. It just allows you to take them to court and sue them. So you have to get your patents in various countries. You just can't get it in one country. If you get a patent in Armenia and somebody steals your idea for China or in the US or in Germany, if your patent doesn't cover those countries, you can't sue them. You can only sue them where you have your patent covered. All right, I just covered that here. It excludes others from making them up. One that, say, excludes it excludes it because you're allowed to sue them. Now the reason you want to get a patent, you want to prevent other companies from using your technology because, hopefully, your technology is superior. You want to prevent them from using it. So they're at a disadvantage. You have an advantage? They're at a disadvantage because they can't copy you. At least they can't copy you legally. Now patent documents are available to the public. Now this is generally, so this is something after filing a new patent application. That number changes. I wouldn't worry about that too much. Now it's important that when you're filing for a patent before you file, you have to figure out, OK, which country should I get a patent in? Now you're here in Armenia. You have a brilliant idea. You probably want to get a patent in Armenia to start with, but then you better figure out what other countries that your idea is going to be valuable in. You probably want to get a patent in the United States. You probably want to get a European Union patent. European Union patent covers 33 countries in the European Union. So virtually all the countries in Western Europe and some of the countries in Eastern Europe, including some of the ex-Soviet republics, Lithuania, Estonia, Latvia, two or three of them, either two or all three are in the European Union now. So there's 33 countries. So you may want to get a European Union patent. You may want to get a US patent. You get an Armenian patent. And it's not cheap, and we'll talk about that later. If your patent rights may be lost, it's not pursued in a timely fashion. And I'm going to go over this in more detail later, and that should answer some of your questions. OK, now, if you have an idea and you're thinking, oh, I want to patent this idea, if you patent it, you're telling the whole world what you're thinking of in detail. You're giving all your ideas in the patent. You have to write everything down for the patent office. So you better decide ahead of time, do I want to tell the whole world what my idea is? You may not want to do that. You may want to keep it a secret. Because if you think that someone's going to steal it, and then you have to sue them, and you don't have enough money to sue them, how do you protect it? If it's a big company, Toyota, General Motors, steals your idea. You come up with a tool that they could use in a factory. And it's a valuable tool that saves a lot of money. If they steal it, how are you going to fight when you take the court, General Motors, or the Toyota, or whoever? That's a very difficult, very expensive thing to do. If you have a patent, you can do that, right? If you have a patent. Oh, if you have a patent, you can sue them, but you need money to sue them, too. You can hire lawyers that's telling you. It's a long and costly thing to do. You can do it. I'm not saying you can't. You can do it. It'll take a long time. So in case you win the lawsuit, you will get your money back. If you win the lawsuit, depending on how the lawsuit is written up, what you do is you win a certain percentage of the money that was saved by the company who stole it. The court will decide. You could get millions of dollars. You could get nothing. I meant the money that's spent over the lawyer. The money, yeah, all that will be recovered. Yeah. There was a lawsuit by an individual inventor in America. He invented a tool, just a hand tool, that you would use in your car working on a car. He invented that hand tool. And Craftsman, which is a big American tool company, stole the idea. And for 30 years, they were making that tool and selling it and making money off. And this man was just a normal person, just all alone. And he went to court. I think he went to court in 1968. And he didn't win. And this thing went and it was in the courts for 30-something years. And he finally won like $76 million. 30 years later, like 1998 or 2000, the man was 72 years old when he won all this money. Can you imagine all that stress for 30 years of his patent was stolen? Now, in his case, he has no choice but to patent it, because it's a tool. You can see the tool, so it's easy to steal and it's easy to copy because it's something in front of your face. But if you have an idea on a manufacturing process, like you have an idea of how to, like when you're baking, when you're making a cake, you have a recipe for making a manufacturing process. You may not want to patent it because you figure, gee, somebody to steal this idea is going to be very difficult for them to figure out the process and copy it. And it may not make that much money. They may not want to spend all that time to do it. So in that case, you don't get a patent. You get a trade secret. And it's kept secret. Now, the best example of this trade secret is Coca-Cola. Everybody here probably has drank Coca-Cola. I see Coca-Cola machines all over you. There's no patent on the Coca-Cola formula, chemical formula. Coca-Cola keeps that a secret in Atlanta, Georgia, in the Peachtree Center, in the basement of, like, a 35 or 40-story building with armed guards in the whole thing and a vault. They don't want anybody to know that formula. They keep it a secret. So that's all the trade secrets. Now, it doesn't prevent somebody from figuring out on their own without trying to steal from you. Somebody else may figure out your trade secret because they're just doing it on their own. So it doesn't protect you from that. But what it does do is it allows you to go to court if somebody's trying to steal from you and you've got your trade secret, you can go to court. And you have some recourse in court if there is a problem. So it's not perfect. I have a question. Do you have to formalize your trade secret? Yeah, the best way to do it is formalize the trade secret and lock it up. What do you formalize? Write a long document explaining everything in detail. And then you just keep it. How it could be separated. It is copied or it is infected idea or someone else. Because you're right. If somebody else on their own without stealing from you, they figure out the same thing, then there's an issue there. Can you put a secret agreement 100% sure that this is such a thing that nobody else can do it? That's right. You have to be certain in your own mind that this is going to be an extremely difficult thing for somebody to reverse engineer. All of this is there's risk in everything here. There's no guarantee. If you have a trade secret, there's no guarantee that it's safe. If you have a patent, there's no guarantee that it's safe. No, you can't sue, right? You can't sue anybody. Right, however, when you have a patent, you have to write down in detail, which is publicly shared. And you can get on the internet and look up my patent on the internet. You can read everything. So the only protection you have is the ability to sue somebody, assuming you have the money to sue them. Or you can get an attorney to work for free until you win. If you win. OK. I think you beat that 100 down. OK, now, I'm not going to spend a lot of time on copyrights, but you can read here. Copyright is similar to a patent. It's a protection like a patent where if somebody steals it, you can sue them until you have a copyright. Now, once you get a copyright, copyright is easy. You just put that C in the realm and that's it. Right, and then nobody steals it because then you have to take it to court. All right, so source code, that would be, I mean, I don't think anybody here is planning on writing music or copyright, but source code, that would be of interest here for engineers, computer files, CDs, computers, this. OK, now this is important here. The copyright protects the literal expression. Now, let's say you come up with some fancy wording and you want a copyright like Nike. Everybody knows Nike, the shoe company? Just do it, right? That's got to be copyrighted. Sure. They're only protecting those three words, just do it. They can't protect the idea behind it. It protects the literal expression, not the ideas and concepts. So if somebody else came up with another way of saying just do it without using those three words, they can copyright it. So that's probably the most important thing I want to talk about on this slide is the literal expression for copyright. All right, here's the expectations and employee obligations. Any major US company is going to have an expectation from their engineers and scientists that when they're in the laboratory working, that they're documenting the work they're doing. When I say documenting, you should have a lab notebook. You should have your name, date on each page. And really, if you want to do it right, you should sign at the bottom of each laboratory page when you're taking your notes. You sign a date at the bottom of each page because if it ever goes to court later on, five years from now, whatever, and you're having a battle with somebody who stole your patent, assuming you got a patent that later on, that document goes to court and everyone will want to see what you did and when you did it. Because when is a big deal? We'll talk about the timing of things as we go through this. Don't co-mail funds. For us, it's talking about government funding. At my company, most of our money comes from the government to build military equipment. At your company, it may not be. At your company, a customer. Some customer comes to your company and says, I want you to build this kind of a machine. And then you design and build that machine. And as you're designing it, you come up with a really great invention for that machine. If the money, if you were being paid directly from the customer to make that machine and you invented that new invention with their money, then there's an issue of who owns that invention. And that's where co-mingling means don't mix up the money. If you come up with a great idea, make your company pay for it so that you can keep your invention in your company. Because you may be able to use that invention for other products. You don't want to have your customer get the benefit of that invention if you're using their money to come up with the idea. So co-mingling is a very important concept. You've got to think about that when you're working somewhere. If you come up with a brilliant idea, you better stop before you. If you're using somebody else's money, stop and tell your manager, I got a brilliant idea. You better give me money to pay for this because we don't want the outside company to get the benefit of that one. OK, starting to get into your question. Do not disclose without a proprietary information agreement or other non-disclosure agreement. If you come up with a brilliant idea when you're working on designing this new machine, don't go around telling everybody. As soon as you start telling people what's a problem, because for US Pat Law, and I'm sure Armenian Pat Law is probably similar. As soon as you start telling everybody, I've got this brilliant idea on how to make this thing. And then you go tell people, especially if you tell people outside your company, then it becomes public knowledge. And public knowledge is bad news for you. When something becomes public knowledge, you can't patent it anymore. Just like you can't patent the wheel. Everybody knows about the wheel. So you can't patent that. That's public knowledge. So you can't go around telling people. And if you say, oh, I've written a white paper, and I want to make a presentation at a technical seminar of my new idea, my inventions, you can't do that. If you go to a seminar and you give a public presentation of your brilliant idea before you've sent it to the patent office, you have a big problem. Because the patent office is going to look at it and say, has this been made public before you submitted it to the patent office? And if you tell the truth and say yes, then they go, well, you can't patent it. It's public information now. So you can't do that. And I know that's a hard thing, because when you invent something, you want to go over to a seminar or symposium. You want to explain what you've done. You can't do that. If you write an article and it goes into a journal, that's bad news. Oh, that's poison, because now it's documented and in public. So you've got to be very careful. When you come up with an idea, the first thing you do is you close your mouth and you do not tell anybody. All right, you can tell your manager or the people that are very close to you at work, that's allowed, because it's within your company. And you have to do that, because while you're working, if you come up with an idea, you have to talk to the people that you're working with. So the people who have a need to know, have you heard that before, need to know? The people that have a need to know, you can tell them within your company, not outside your company. There better not be anybody outside your company that has a need to know, that's a problem. But within your company, you're allowed. But don't go around and tell 20 people within your company. So when I was doing my work at my company, I didn't even tell my manager. I said, you know, you don't even have a need to know. And he didn't like hearing that. You have to be careful on who you're gonna tell, only the minimum number of people. If you want to pattern your intellectual property, but already something like that, already patterned by the others, do you have a right to make your pattern the same way, or they will not pattern? Right, yeah, we're gonna get into that a little later. I'm gonna give you a quick answer now, but we will go over it. If you have an idea that you come up with an invention, then you get on the internet, you do a pattern search. If you want to see if somebody else has a pattern, you do a pattern search, you find out that somebody has something similar. If you change their idea, here's what somebody else did and here's what you did. If you can make this a little bit different than this, and if it's important, that little bit different is important, then you can get a pattern on your idea. And we'll get into that, because I have a slide on it. But that's a good question, and it's important. Okay, where are we? Talk about this, it's just the same thing. Right, when you come up with your idea and you're working in your company, the first thing you should do is write it down, don't show anybody and don't talk to anybody about it if you can, other than the people close to you. And then go talk to your manager, or if your company is big enough and you have an invention committee that reviews inventions and decides which one should be patented, then you write it down and you get the submission to your committee, so that they can decide whether this thing should be patented. Okay, that's another good, that's a very good question. And I can, for some reason I didn't put it in my presentation, but it should have been in there. If you're working for your company, and your company designs and manufactures automobiles, and you come up with an idea that has to do, well, this is a true story. Hold on, hold on, hold on, we won't do the true story. And you come up with an idea that has to do with medical equipment. I don't know, I don't know a bit, but this is something you're, I'm sorry. Well, if it's in the same area, You cannot do that. You're kind of obligated to tell them that it's in the same area. Now, if it's totally different, you're an automobile, so you're a kind of, all the time you're in the description. All right, but I'm going to give the answer. If you're working in automobiles, and you come up with an idea for medical equipment, depending on when you want to work for your company, you have to sign a contract with your company. At my company, they own everything. If I'm working in automobiles, and if it's a medical equipment, they own it. It doesn't matter. In fact, and the example that we use is the Barbie dolls. Does everybody know what a Barbie doll is? It's a little doll, but it's a beautiful woman. Dolls are usually ugly. This one's a beautiful woman with beautiful dresses. The man who invented or worked on the Barbie doll was an aerospace engineer. So these are two different technologies. One is toys, and this is for little girls, right? One is toys, and he was working in aerospace. But whoever, when you go to work for a company, if you sign a contract and it says that they own all of your intellectual property, then no matter what you think of, you're in the shower, you're taking a shower, and you think of something, they own it. Your company owns that idea. If you write it down and submit it to the convention committee, they own the idea. But is it usual practice? I don't remember. I was looking for A.G. as well. I couldn't figure out why I signed such a contract. Most people don't know. If you work in an aerospace in America, you signed it, I guarantee you. All the big companies make you sign it. I mean, the argument from the employer standpoint is that they've nurtured an environment of creativity. They've surrounded you with equipment, with people, with, I don't know, an atmosphere of such thinking, and therefore they've set you up. They've contributed to that environment where now you are bearing fruit. I mean, that's not the only argument of the problem. That's exactly what the big companies in America will say. I'm not advocating, I'm just saying, I think that's where the argument is going to be. No, you're right. Our big companies don't mind the great realistic UDSC or something. Yeah, that's right. You're taking a shower and you think of something else. How can they own it? Well, they own it because you signed the contract. Now, here's what you do with it. You write it all down, you submit it to the committee. Committee is not interested in Barbie dolls. An aerospace company, they won't even know what to do with it. You have all these PhDs in there. They're gonna look at the Barbie doll idea and they're gonna go, what are we gonna do with this? We can't make money off of Barbie dolls. They don't have enough sense to want to sell it to somebody. They don't want to mess with it. They're not interested. So then what you do is you request a release of your idea from the company. And the company has 30 days to tell you if they want that idea. So within 30 days, if they tell you, no, we want that Barbie doll idea, we're gonna do something with it. Like sell it to some other company to make money. All right, then they can do that. If it's a Barbie doll and you're in an aerospace company, I guarantee you they're not gonna do it. They don't have enough sense to see that this will make money somewhere else. So they won't do it. And then after 30 days, if they don't respond to you, then the law says that you're free on your own. Many of you, some of you might have been present a couple months ago. We had a seminar, Rube and Mestjian talked about his experiences working at IBM. And he and some fellow co-workers of his have developed some new database technology. So it wasn't even Barbie dolls and aerospace. It was IBM and databases. And they said they weren't interested in pursuing the idea. So this same example, which is taken in an extreme form here, happens at a, I think even a much closer form where a company may not be interested. And Rube and Mestjian, then co-workers at IBM actually quit IBM. When IBM said we're not interested, they basically spun the idea out of IBM, but with this non-relational database idea that now he's, he told me this, I don't know. No, that story is true because I've read that in a magazine. Yeah, so I mean, this happens, I think in even much, much closer topic areas, if it doesn't follow a company's strategic direction or if they have a competing product or whatever, they might just not be interested. Anyway, I don't want to, I do want to find topics we hear about in our other seminars because they're eventually supported. I actually have my own personal issue. So I'm going to tell us. Can I add one thing which is appropriate to this? Swiss companies make watches for over 200 years. Swiss companies, in fact, invented a quartz watch. Showed it to leadership. Maybe you should look at it. It doesn't have all these moving mechanical things. That's not a kind of watch you want to watch. The process ended up with Japanese who got the quartz watch and they took over and there was much more sales than regular watches. So there are many examples of both extremes. And that happened in the late 60s so that was only about 45 years ago. Right, well I'm sure I understand this at the time but I would say that the Armenian wrote Lowes in at least one method is literally the same. Armenian Lowes says whatever inventor events in whichever company it is owned by the inventor pasta, except for the cases, except for the cases. If he's doing his direct responsibilities in the company at particular tasks delegated at the moment at the time. Otherwise according to Armenian Lowes but well how worthy Armenian patents are that's not a good one. So we are going to look at the continuance, right? Okay, anyway. Now the last one is very important. Acquire your company's permission before presenting an external conference as they're publishing technical articles. Remember if you do publish or present you lose the right to patent because it's public information. If you go to your company's management and tell them that gee I think this should be a simposium but I still want to go to and present it to simposium then you'll work with your people within your company to decide what things should we take out of the presentation so that I can still present it but it won't affect the patent. You don't want to tell them everything in a simposium. You tell them everything you're going to lose your ability to patent. So you've got to be real careful. This is a very touchy thing. The best thing is don't tell anybody, don't present, don't do any of that until after you've submitted your patents to the patent office. Okay, why do you want to patent it all while we've done some of this? For the company, it makes your company look good. It's something that gives your company good reputation. It prevents your competitors from using that idea unless they steal it and then you consume them. Licensing revenue, if we haven't talked about that I want to do that now. If you have a great idea like the Barbie doll and you work in aerospace and you come up with the Barbie doll and you get your company to release you while in Armenia it's already released but if you're working in another country you request a release and most companies aren't going to want to make Barbie dolls or sell Barbie dolls. So they release it. So now you have your Barbie doll idea and you can go get a patent on it. Now you probably, if you're working in aerospace you probably don't want to make and sell Barbie dolls either because you're working in aerospace. You're an engineer. So what you do is you go to a toy company. Mattel, an American Mattel is one of the big toy companies. So you go to Mattel and you say, I've got this patent idea and if you like this let's enter into some kind of contractual arrangement and you pay me royalties, some percentage of what they would make in terms of profits off of them making and selling your idea, the Barbie doll. And then you would keep some of that, you would get royalty money from it. You might get 5%, 10%, it's negotiable. Say if they make 100 million in sales and they make 10 million in profit you might get 5% of the 10 million. So you might get $500,000. And that might be every year depending on how you write the contract. So the royalties could go for many years. It might go as long as the patent. US and European patents are now 20 years long. So you might get a half million dollars a year for 20 years and then you go do whatever other work you want to do on your own. So that's licensing revenues and that's typically called royalties. Not able portfolio, this is more for the company so we don't want to talk about it. If your company has all these patents and these different products that they make that has value to your company because if your company is going to be sold to another company having all those patents and all those different technologies that your company is using has great value for your company. Repository of inventive concepts and technology for future use. Let's say you come up with a bunch of ideas that are good for your company but maybe not useful right now like the relational database. Maybe they didn't want to do it right now. They should have used it in the future. So you want to patent certain things because it may be needed in the near future so it would be valuable to have it now. Now for you personally, professional recognition because you've invented something, you have a patent. Some companies give monetary awards for their patents. The monetary awards that we got were not very much. Just a few thousand dollars and then career advancement. So you may get promoted faster because you did have a patent. There is nothing new with the inventive but it gives like one percent of some companies. Some companies do that and I don't think so. IBM I think gives a percentage. Aerospace companies, they just give you a flat rate, two, three, four thousand dollars, that's it. It's not very much. No percentage of... No, aerospace in general does not give a percentage but I think IBM gives a percentage. There are some companies that give a percentage like kind of like a royalty of the money that's made from the patent. Okay, here's different things that should be patented. System level, design architecture, the actual product, the apparatus, algorithms, software. Now this is where my patents are. Manufacturing methods or processes. And I'm here. Composition of matter. Now, it's gotta be non-obvious, whatever. Again, you can't invent a wheel. It's gotta be something that's not obvious to someone who works in your field. Now after saying that, the US Patent Office will tell you we have a very low threshold for non-obvious. So in other words, if you come up with something that you think is non-obvious, they're probably gonna like the patent. So you don't have to worry about it too much. Sometimes it comes up and they say, well gee, that idea is so obvious you can't patent that. I would suggest you write it down and submit it to your committee. Let the lawyers decide whether it's, and the business people, decide whether it's something that should be patented. Don't be afraid, write everything down and just submit it. Don't be afraid, don't hold back. When you hold back, you may be the one that's making the mistake. But if you write it down and submit it, then you're not making a mistake. Let other people decide whether it should be patented or not. All right, well we talked about this. It's a useful novel. I mean you can't invent things that are just stupid and useless. The patent office. They're trained to look at it and they say, is this thing useful to society? If you come up with something stupid, I mean it has no use and the patent office decides it's useless, but there's no problem with it. Novels, I mean it's gotta be creative, innovative. Non-obvious, this is the one where it's a little, it's up in the air and the patent office will tell you that. That's kind of like on a sliding scale, so this is not an easy thing to find. Okay now, when you're writing your invention, must be described in sufficient depth so that a person that's knowledge in that field can understand it and know how to do it. Now the best mode of invention must be described. Now this one, the law changed in the United States in 2012. Before 2012, you had to tell the patent office the best way to use your idea. Let's say there's five ways of using my new idea. Well, you have to tell the patent office the best way that you think it should be. Right now, as of 2012, you don't have to tell them the best way. You just tell them the different ways to use it and you don't have to tell anybody the best way. First of all, how could I know which one is the best way? Maybe I don't know either, so I think it's probably better that you don't have to tell them the best way. If you have patterned your idea, but it has not still come to realize or it has not yet become as natural as you want. And someone, it realized your idea and it is already came to reality. How you can shoot the process and say that I want to sue you because you're still my idea, but it is just an idea, not realized things that you want to make it real. Okay. You can sell them. But there's no requirement that says that you have to actually have... You can say it is my idea, it is not your idea I have used. I used my own idea, but you already patterned this idea and I realized it. If you patterned it, then it's yours. It is just a theoretical concept, not the realization of the things. All right, that's the realist, and you make a good point. You can have reduction to practice, but it's not a requirement. Reduction to practice, which means realization in reality, building actual hardware. You are not required to do that and have it happen. Your idea should be buildable, should be buildable, but there's no requirement that you have to build it. Remember, it's intellectual property. Didn't say hardware property. Remember my first, on the first slide, the definition of intellectual property? What's in your head, the idea? Now, you can't invent something that's a perpetual motion machine and then say, okay, this is my idea and nobody can copy it. First of all, how could you make something that's a perpetual motion? But the pattern office will look for those kinds of things. If they see something that's perpetual motion or generates huge amounts of, or if you're claiming it generates a huge amount of electricity or energy and there's really no way of making it work, that's not gonna be patterned. Remember, it has to be something useful, not novel. That would be something that can't be made, even though you have it. Yes, I know that everything can be patterned, but you are just patterned your idea. Your patent gives you the right to sue somebody even if they made the hardware. They should pay you, they have to pay you royalties. I'm not sure that they have to pay you. If you sue them, they are free to pattern their own idea and realize what they want to. Well, if you're talking about them having a different idea than what you have, then yeah, but that's two separate factors. But if they're copying your idea, then you can sue them. Now, they may not have any money, so you may not get it, you may not make any money. Right, so we talked about this already. It's a little special for novelty, utility, and non-obvious, but the patent office will still look at it. They'll filter out things that are really closer to this real fast because this is typically for a big US aerospace type company. But here's the different ways of generating an invention disclosure. One is when the company itself funds the research and development with their own money internally. One is when it's being funded by the outside, by maybe the government or an outside customer is funding it, but then there's an issue of who owns it, if they have somebody on the outside funding it. And then if there's contracts where they're giving a contract specifically to do more innovation activity, sometimes your company will have a competition inside your company to create innovation. And they say, okay, we want people to come up with ideas to do such and such, bring us your ideas, and we'll give you that award. And I've been involved in several of these. Documentation of inventions, it establishes a legal record, and we talked about this earlier. Make sure when you have your notebook that you sign and date every page of your notebook, that's important. They say you're in your notebook for evidence. Reduction to practice. Reduction to practice is what we talked about is when you have your idea, and then you actually build something that shows that your idea works. Now if you can actually build it and show that it works, that convinces people that this thing is a really good idea, because you can show them. It's a lot harder when you just write it down on paper and you're trying to convince somebody in your company that they should spend the money to act. So reduction to practice is important. If you can do it, usually reduction to practice, sometimes it costs millions of dollars to build that first unit. So you don't have the money to do it sometimes. But if it's something easy and you can do it, you should do it. Trump, this closure is further okay. I think this is where I'm gonna answer your question. Let's see if I can remember the details. If you comment, the law that you would, United States patent law has changed in 2012, so I'm gonna try to tell you that before it changed and after it changed. You have one year from the time that you think of something, and then you document it. If you think of something and you never write it down, there's no time limit, because how does anybody know if you thought about it? Maybe you were in the shower 10 years ago, you thought of something, and you never wrote it down. There's no deadline, there's no time limit, because you never wrote it down. As soon as you write it down, the clock starts. Are you got it? You write it down, you write it down, you send it down. Send email to me. Well, you have to remember, you don't want to go sending your idea of the email to your friends. Because then it starts getting public, and then you got a problem with the computer. You gotta go write it down. You write it down. Now, let's say you're within your company, you write it down, and you tell them that your invention committee would give it to them. So that's kind of like, when it goes to the invention committee, then that starts the clock, and you got, now this is in the past, the long one. You got 12 months to submit it to the pat-off. Remember, see the thing is, who's gonna know? When you put it in your sink, who's gonna know? I'm saying when it becomes, when you write something down and it's within your company and other people know, then the clock starts. Because eventually, if you submit it to the US pat-off list, they're gonna ask you, what did you first document? Can you trust the US office when you send your pattern? You said that you should not make it public, but while you are sending your ideas to the debt office, how they are guaranteed that you will not steal your idea of sending. What's your choice? Well, I'm not even serious, what is your choice? The whole point of this is not some objective, you know- Not to send it in emails. Yeah, it's a legal process, it's like, you trust the court system, you trust that. Trust to something you don't have to, but you also don't. I have my own right, not trust their system. Okay, but then how does it happen? Then don't have it. How you sue somebody, you don't trust anyone. Right, you don't have to trust anyone. I understand. I understand. Don't complain later if someone steals the idea, right? I mean, that's the- We're gonna go over it. Yeah. What you can do, you can write to yourself because post office and send it to you, you get the stamp. Oh yeah, you can do it. You do all that. You can send it to me, you can send it to me. At least in America, and from my personal, because I've done several of these now, there's not an issue with the US Patent Office. The US Patent Office is best I can tell, it's honest. So at least for the US Patent Office, that's really not an issue. In Armenia, I don't know. No. Now here's the thing. The US Patent Office has changed the law for 2012. And now it's whoever sends the idea first to the Patent Office, so you'd better send a registered mail so that there's a timestamp. When the Patent Office gets two ideas that are identical then it could happen. Two people at the same time mail into the US Patent Office their invention. And so, the one that wins the race is the one that got timestamped first by the national. And this just changed this year. So this is new. Now that one year thing I was talking about, the US Patent Office, if they got two that came in, they wouldn't say which one came first wins. They would ask you, how long ago did you document it? And then you'd have to show them your documentation. You had up to that one year before. So that's all changed now. Whoever sends it in first against the timestamp, that's the winner. Another person's just not alone. Let's say there is a patent or something. I don't know about that. And before the time that it was patented, I had been using it in my manufacturing process. The products were ready, but the Patent Office did not talk these days. If you were using it before you sent it to the US Patent Office. And before somebody else sent you. Okay, but when we're saying using it, were you using it internally? If you're using it internally, you're probably safe. But if you're using it in your product and then you sell it and then everybody has it, then you got an issue of whether it's public knowledge or not. I can't give you an exact answer because it depends on the specifics, but if your idea is in a piece of hardware and you're selling it to the general public, then there's an issue there. Because you haven't sent it. You should do that after you've sent it to the US Patent Office. By the way, once it gets to the US Patent Office and they timestamp it, then it's called Patent Pending and it's already safe. If somebody steals it, even though they haven't approved it yet, because it takes 32 months and then you'll come, I have that in a slide. Once they stamp it, it's protected until the time they actually read it, because they can't, they don't read these overnight. It takes three years before they actually start reading it because they're backlogged or behind. But when they stamp it, it's Patent Pending. If you get a patent later on, then it's been protected that whole time. So you don't have to worry about the stamp. That stamp is a big deal. So right after getting this done, you can make a public... Yeah, after you've got the Patent Pending stamp, then you can start making it public because it's already protected. Now it may turn out that the US Patent Office three years from now when they actually read it, they don't know that this isn't patentable. We're not gonna let you patent it. Well then it doesn't matter, right? Because it's not patentable anymore. But the time it was in the service stamp, that time you have to pay this $40,000? No, no, no, no, the $40,000, let's go with this. How's later? It finally made it. I mean, we're going over time, so I assume it's okay since you're asking a lot of questions here. Is it okay? Yeah, it's all okay. As long as you're here? It's all okay. Estimation and where we're at? I don't know, it depends on your... I didn't think it was gonna take this long, but we've had a lot of interaction which I like. Probably 29 minutes, right? Okay, I'm gonna quickly go through this and give you an idea. Submission of inventionless closure, okay. I submitted an invention, I submitted it. Who did I submit it to? Well, I didn't submit it to my manager because I knew we wouldn't understand it. So I didn't submit it to my manager, although you may typically do that. And then it gets reviewed by somebody before it goes to the committee, usually somebody that understands that technology but then it goes to the committee. The committee's gonna decide. Now, when you submit it to the committee, you gotta be like the cheerleader. Does everyone know what a cheerleader is? You gotta go in there and say, look, this is really important. It's gonna make the company money. This is important because you gotta give them all the reasons. Don't just hand it to them and walk away because they're gonna look at it and go, what's this? We don't know if this is important or not. You gotta make sure you tell them. And money, is it gonna save the company money? Is it gonna make the company more money? Is it gonna reduce defects? Is it gonna decrease cycle time? Is it gonna improve quality? Does it reduce pollution? In America, reducing pollution is a big deal. You can make a lot of money just on inventions, reducing pollution. So those are all things that you gotta tell the company that this is what it's good for. So you gotta pitch a card. Okay, then it comes here. Then they decide what to do with it. Then you get a chance to make your presentation. At our company, we got a chance to actually talk to the committee and tell them what the idea was good for. Then they decide. Now in my personal experience, I submit 19 ideas. They only like five of them. That's a bad, that's a really low percentage. I was striking out. I was losing all the time. And the reason for me was because I had manufacturing process technologies that I was inventing with my colleagues. But the people on the committee were not manufacturing experts. They were PhD design engineers. They were analysts. So they didn't have an appreciation for manufacturing technology since that wasn't their expertise. So it was very hard for me to convince them that what I was inventing was important because they really didn't understand it. And it wasn't something important to them. So that's why my percentage was very low. Five out of 19 is horrible. It should have been more like 10 or 12 out of 19. Alright, so they decide and then they decide whether to trade secret, don't do anything, whether to call it away, or you know, have it be good. Now, when the patent committee decides they're going to patent something, they don't patent it themselves. They don't write it up. Then what it does is it gets sent to an outside patent attorney office, an outside company that's an expert in patent. An outside attorney office that specializes in doing patents will be who actually writes the patent. Now, I want to make sure that this is money. This is a big deal too. Number one, you want to pick a patent attorney who understands your technology. So if your technology is in chemistry, you do not pick a patent attorney office that has expertise in biology because they won't know how to write your patent. So you have to pick chemists who understand your chemistry type invention. And so the patent attorney should have a degree in chemistry and be a patent attorney. And then it's better if the patent attorney has a PhD expert in chemistry who acts as a patent agent. And then the patent attorney uses the patent agent who's a PhD chemist as the consultant because it's very important when the patent attorney writes the patent that that patent is written in a very precise manner so that when the patent office, the U.S. patent office, reads it, they know that this thing is well written and then they're going to approve it. If you don't have that thing written right, they won't approve it. Or it'll be a weak patent. They may approve it and it's a weak patent than someone else will have along a year later and have a better patent written and then they will actually override your patent. And so your patent kind of becomes useless because somebody wrote a better one and then it becomes a matter of who wrote it better. So writing the patent is very important. You've got to pick the right patent attorney who has the technical expertise in your field. Okay? And that's one of the big points I want to make. All right, then they have to decide whether they want to do a foreign filing. So in the United States, you might want to file a patent into European Union. You might want to file a patent. Sometimes you file a patent in China even though China doesn't observe patent law very well. You may want to do it anyway because 20, 10 years from now, China may change and China may be better at protecting your patent. So you have to decide where. And your patent, within your company, your management will ask you, where do you think this should be happening? And so you've got to know where do you think it should be. For us in America, it's usually South Korea, Taiwan, Japan because they're strongly electronic. European Union, the U.S. Those are the main ones. Okay, next. All right, we already talked about this prior art. When you come up with your idea, you get on the internet, you start looking for who else has done what I thought of. If I thought of something, I want to see if somebody has done that before me. Then you've got to make sure that when you write your patent, that you're not funding somebody else because that's inclusion. Then you're cheating. So that's called prior art. What was done in the past that's on the internet that I can look at? You can look at patents. The U.S. patents are on the internet from 1976 until now. So you can look at the last 30, 40 years worth of patents. Talk about that. Now, even if you find prior art that's close, submit your idea anyway, maybe you change it a little bit, then it can be patented. This just tells you how to do the keywords or the U.S. patent trade market. Okay, next. What number are we? 16. 16. We're done. Okay. Alright, now talking about costs. There's a patent office. There's about 30,000 for the patent attorneys. And then every three years, you have to send a fee to the U.S. patent office to maintain your patent. It's a maintenance fee. And I don't know, I think that's $500 or $1,000 or something. Is it possible that normal anxiety is the imaginary to do the same thing? You could do your own patent yourself. There's nothing preventing you from doing it. But because there's a very specific way of writing it to maximize the protection for your patent, I would recommend that you don't do it because it'll take you far longer to learn how to write it than if you just want to pay somebody else to do it. And if you make a mistake, then you've lost area. And he's not so good about it. He's not so good about how you can do by yourself the patent. No, your relation. Your relation you can't do. This is hopeless. The only thing that you can... The easiest thing for you to do is write a very detailed white paper. I'm going to talk about that on a later slide. You write a very detailed white paper and then you submit that to the patent attorney and then you work with them because you just can't give it to them and walk away. You're going to have to help them understand it and you're going to have to help them work. Then they have to write it for the U.S. Patent Office which is a very specific way of writing it but the attorney is going to ask you a thousand questions. Back and forth. My first patent took seven months. Back and forth. I went back and forth, I think, eleven times from the attorney to me and my colleague. It's doing this. And then finally it was done and we sent it. There's another issue. Sometimes your company may not want to do the patent because you can't police it. And what that means is if I have a medicine, some of mine are manufacturing... Well, I almost solved my invention for manufacturing processes. How are you going to know if some company in China copied your manufacturing process? There's no way. I'm not in their factory. I don't even know where the factory is. And when they sell the product you can't tell from looking at the computer safe that they copied my manufacturing process. So in that case you don't want to get a patent because it's impossible to know if they even stole it. So what you do is that's when you trade secret. You got to trade secret. You just write it down and you put it in your safe and you keep it. Trade secret. So that's another reason for having trade secret. And then you don't have to spend any money with attorneys. You don't have to get a patent. You don't have to worry about everybody knowing about it. Remember, when you get a patent it's public information on the internet. When it says no file, when the committee says we're not going to file for a patent, don't take that as an install. Sometimes it's better to do the trade secret because of the police permission. Sometimes this is the smartest thing to do. So just because you don't get a patent does not mean that your idea was bad. It might mean that this is a better way to protect it. So trade secret. Actually in our company, if we got a patent or a trade secret, the company paid us the same amount of money. Not very much, but it was the same. So from a monetary point of view they considered them equal. We're going to go through this fast. This is the 12 month within 12 months of patent rights loss. Now see, this has changed. It's actually old. This is kind of telling you how long things take usually. This is good. None of this is concrete. And it's also showing this is for foreign patents. See the foreign patent filing is a little bit different here. Present idea to the committee draft application without with outside counsel See that's that 12 year 12 months we were talking about before goes to the patent office. Well, write the disclosure. See as short as possible as the time period. In other words, before the law changed, they wanted you to write it down and then submit it to the committee and then get it over to the patent offices within 12 months. You're wasting money. Now they're saying we don't care. Whenever it gets to the patent office we date stamp it and whoever got in first, they win. But still this gives you an idea of how long things take. Now, the US patent office date stamps your patent when you send it to them. Your invention, not your patent. It's not approved yet. They have to read it and go through it and that takes months for them. The average time that they you have to wait is 32 months after it's date stamp before they even start looking at it. Because they're backlawed. They're so far behind in patents to read and to approve. They're 32 months behind. So it takes a long time. But this is when the patent pending protects you. This is the line. After that, regardless of when they actually read your patent and approve it, the line starts when they stamp it. That's when the time starts. And then you get 20 years before your patent expires. We talked about all this. Well, we talked about this. How can a company make money off of your patents? When we talk about it, they can license a sale of patents for royalties. You can actually license a secret if you want. Data rights. Here's ways of making money. Licensing, royalty, money. You have the secret. Okay. And some other company says do you know how to do this? Do you know the secret? With contracts and attorneys involved you reveal the secret to them. But they're paying you. Well, they're paying you for it. The secret is gone. How is it shared? Yeah, you shared the secret. It's still a secret. You share it. Okay, so the guy who you are licensing the secret has no rights to sell to somebody else. Well, that's all in your contract with them. If they say we want to sell it to somebody else and you agree to it, then that's all part of your contract. The contract is up to you and the other company. If you sell the secret we don't cut the news why do you conclude that? Well, that would be hard to prove if it was a manufacturing process. You have to trust the company that you're dealing with. A lot of us just trust, right? Licensing is the secret. I didn't see this for the first time. I didn't know that. Licensing is the secret I know. You can license the trade secret. The secret is ready this time. You don't pay fee but how do you license the secret? Secret is done. They can keep the secret or you agree that they're going to expose the secret. As long as you agree to it they can do whatever they want. They just sell the secret. I see. You share it. It's all in how the contract is written. I see. Okay. This is just a review. You document your inventions. We talk about writing your name on each page. You're not trying to determine if the idea is patable like your management and your own company attorney decide that. You're not the one that's going to decide whether it's profitable or trade secret let the attorney decide that. You're going to be involved but you're not going to do it alone. Okay, next. Now, we've already gone through this again. We already went through it once so now I'm going to talk about quickly. I'm going to talk about in two minutes my own personal experience. Go ahead. I already told you I had 19 invention disclosures. Submitted 80% of them were manufacturing technology. Here's what they were doing. How do you make part of a better, faster, cheaper or agreement? Most committee members or PhDs have little or no many factor. This is a big problem for many and for the types of submissions that I have. Only 5 of 19 of mine were approved for patent. So right now I have one US patent and one European union patent and three US patents are now pending. I'm just waiting. I mean it'll be two or three more years. And they're 32 months behind on patent submissions of the US patent office. Okay, next. Here's what you as an engineer have to do. You got to write a very detailed white paper describing your invention. You got to do a really good job of describing it. I would suggest you write a white paper then you create a slight presentation because you're going to have to present it to your management and to your attorneys at your company. If you have reduction to practice did you come up with a prototype of your idea? So if your idea is a machine did you build that machine? Does it work? So that would be good. If you can do that this is a huge advantage to proving to people that your idea is really good. Reduction to practice is very important if you can do it. And then we talk about it. You hired an attorney that has expertise in the field of your invention. Don't hire an attorney who handles criminals. They're not going to know how to write a patent. So you got to be careful. We talked about this having a PhD in the field because we were working with an attorney on this chemical invention the patent attorney was a chemist with a four-year chemistry degree and then that patent attorney used a patent agent who had a PhD in chemistry. So for one of my patents there was a lot of expertise at the patent attorney office. Now you always have to work closely with the patent attorney because there's always going to be a misunderstanding as to what it is you wrote. So you got to work closely with it. And after the patent is written after they've written your patent and you think you're all done you're not. The hardest part, you haven't even done yet the hardest part is anticipating is somebody going to look at my patent that I've written make it slightly different and then they're going to patent that slightly different part and kind of ruin your patent. So you have to figure out how many layers around my patent do I have to think about and write into the patent to protect my patent. And that's called a multi multi-tiered or multi-layered patent. And that's the part where you really need a patent attorney because they will ask you a thousand questions about how do we put these other layers around this basic patent so that somebody can't change it a little bit and then they get a patent. And that's called the onion. You know you got a soap peeling the onion, you get all these different layers of the onion that's what you have to do with your patent and I'm telling you that's the hardest part because I invented this I don't know about all these other things out here, I didn't invent something over here, I invented this. How am I going to know all these other things? So you spend more time trying to figure out well if somebody wrote something here from my patent how am I going to, I have to figure that out so we write it into this patent. I have to like predict the future and that's hard. That's what takes the war. So even after you've written this this is the basic part of the patent. You have layers of additional protection, the onion layers. You can discussion we might have gone over a little bit I will take a couple of questions now and then as long as Mr. Fennar can stay here and as long as he's not needed you know we can hang around and informally continue but maybe we'll take a couple of questions and then if people have to run they can run. One thing that when you're trying to sell your idea to your company so that they'll want a patent you're going to have to have like a 20 to 1 ratio on money that you're going to make off your patent versus how much it's going to cost to get the patent. So if it costs 40,000 the typical US patent costs $40,000 to get with attorney costs and all that you better have an idea to make your company at least $800,000, 20 to 1 because other than that it's not worth it it takes too much time from different people they want a big payback a big profit if you're going to spend $40,000 and you're only going to make your company $60,000 the company is going to say forget it we're not interested, it's just too much effort you've got to do that math you've got to do that financial analysis, economic analysis while you're writing up your idea to prove to them that it's worth spending the time and effort and money to get the patent it's got to have a huge payback and I'm giving you a rule of thumb 20 to 1 at our company it was minimum 10 to 1 10 to 1 they wouldn't even pay attention 20 to 1, 30 to 1, 50 to 1 then you get their attention this is the profession that started the unden the idea that you mentioned it would be a good idea to expand that discussion long because the way those happen to other boards become vulnerable for professional thieves take it and read it would be a good idea to expand that it is a big problem for a person who's writing a patent to try to predict who's going to try to copy my patent and change it a little bit over here, over here, over here and you have to be able to write all those things into your patent so that they can't do it let's say we are a medical university so I come up with something that I think I think this is about the patent thinking because I know the history of cryptography for example two professors from Stanford University in 1976 they published a paper they get it was a revolution at that time and 20 years they're getting money from the patent so it was really being as a donor but that was the idea let's say I think this is a similar idea how I can do this how but I can at least management of our university for example how can I do that it's $40,000 up front if you want a US patent and that's really where you're going to spend money big money comes from the US you're going to spend at least $40,000 Japanese I want also European Union or something you'll spend over $100,000 how can I convince the management of university for example that will be a very difficult thing to do I was thinking I published the paper the recognition this is the best paper and I have one year to do that this is hopeless thinking you publish that paper before you have sent your patent idea to the patent office then you cannot get it then how this is $100,000 how can I convince the management that this is good to do is there a chance to say I'd say the chance is pretty low because I worked for a major corporation that had a lot of money and I'm not going to lie about a 19 how about good news I do have good news you've got a couple of ways number one you're not going to go to the AUA management team here they probably don't have the money and they're going to say you're a cryptographer expert this is a university we're not experts so you've got to go to either an outside company or you've got to go to an outside company or you have to go to a wealthy individual and you trust and have them have it you can't you can't trust me but you have to have well I told you you've got to write everything down in detail and then you create your slide presentation and then you can build a reduction to practice that's how you're going to try to convince someone I didn't say it was easy isn't it good news if you work for a company or if you work for a university who's not interested in what are they not going to be interested in they're not interested in defending the path if you're not going to keep prepared to fight them if they're not prepared they might sign a waiver saying that's the first step this question is after it gets passed to the university now you've got how does it get passed to the university it says you are free to do anything maybe it's yours now and now step two is everything that I think Randall just said you find a partner who's going to mutually benefit it's going to make billions or even more I hope for you in your example you're going to be prepared to split billions with you if you have a partner see in photography for example until you get recognition from the community then you can do something you can't say oh I keep in secret if you're going to go to a symposium so you think about photography if you're going to go to a symposium and present you can't tell them the real part of your idea don't tell them what are you thinking about they say this is not that easy I know it's not easy I never think I never I have 10 heads but I never want to be involved in this because I work for the company they find a partner but I'm just thinking what if I have some future I really want to do something look it's very difficult I work for a big company and I only got 5 out of 19 it's a low for me it was a low probability to pose you can't sign anything with the company but then how confident can you do it if they look at the symposium they can't say what is that how I know if this is good thing or no they might understand really well it's not just their ignorance I admit it's pretty good with data misses but in our example I am surprised why are you surprised maybe it's a species in a different direction maybe it is a failed ideal maybe they have a competing product maybe they see the technology evolving in a different direction it is not black and white I think there's a million reasons why they may not you have to sell the good idea you have to be able to stay if you just wrote it down if you are given to somebody they are not appreciating the value of this it's your fault you are not going to do a marketing job to say what's a marketing value something like that an example of the watch in swiss company the engineer was a football engineer he was not a marketing person he showed the marketing value outside the company so maybe you want to get trusted people who do value and get an evaluation if you go to society they'll buy that from you for so much money then there's a marketing potential you can make marketing value something you have you have a contract at Stanford you have a contract now or you can reach them and you can trust them and then if you can get them and you can trust them because they're at Stanford University by the way he reached to a university and he was 60 years old he said I don't believe any professors you're retired from professors at Stanford University because he said he was driving a plane you have to help you have contacts like that you should get a hold of those types of people and share with them your idea and assume you're trusting them or you get a legal document okay so you have to share private private not public I would suggest you get a non-disclosure agreement cycle okay we're done come down here and ask more questions