Editor’s note: This story has been updated since original publication. An earlier version misattributed a quote to Warner Delaune, a registered patent attorney with Baker Donelson Bearman Caldwell & Berkowitz. The correct attribution is Devin Ricci of Kean Miller. Business Report regrets the error.
(Photography by Don Kadair: Cellcontrol CEO and co-founder Robert Guba)
For seasoned technologist and serial entrepreneur Robert Guba, a patent is the foundation on which he has built successful businesses.
As CEO and co-founder of Cellcontrol, a technology firm with a mission to stop distracted driving, Guba has secured a majority of the market through strategic third party partnerships, working with Fortune 500 and 1000 companies and fostering direct relationships with consumers.
While Guba attributes Cellcontrol’s success to hard work, an innovative engineering team and the company’s focus on long-term business strategy, he insists the root of that success lies in the strategic advantage of the company’s patented technology.
For Cellcontrol, patents provide both an offensive and defensive strategy, Guba explains. “Offensively, it gives us the freedom to operate,” he says. “Defensively, it brings value within the company for us; there is protection in a barrier to entry or a perceived barrier to entry.”
Cellcontrol is certainly not Guba’s foray into the patent world. Prior to co-launching Cellcontrol in 2009, Guba co-founded TraceSecurity in his Austin, Texas garage. While serving as the chief product architect for the Baton Rouge-based firm, which offers cloud-based cybersecurity solutions, Guba worked with his partner to develop his first patent under the umbrella of TraceSecurity.
After six years in business, Cellcontrol has secured three patents and has several others pending.
“We invest in patents as a pillar of business that you have to have for success,” Guba says. Even so, he knows there is no substitute for a strong commercialization strategy. While patents offer invaluable advantages in the marketplace, Guba is ever mindful that despite the patents, the company must still successfully execute and sell its product.
As Cellcontrol Vice President of Marketing Jesse Hoggard explains, “The patent doesn’t guarantee your success. What it does guarantee is the potential of your success.”
Devin Ricci, an intellectual property and registered patent attorney with Kean Miller, believes that’s the reason the protection of novel innovation in Louisiana is on the rise.
“It seems as though the interest is growing for patent protection in Baton Rouge, and not just patent protection. … The [intellectual property] landscape in Louisiana, for a while, was lagging, and it is starting to catch up at a very fast pace.”
According to the U.S. Patent and Trademark Office, inventors in the Baton Rouge metro area obtained 1,367 utility patents between 2000 and 2013, the most recent year for which data is available. That placed the Capital Region at No. 118 among all U.S. metro areas for utility patents—the most common type of patent—defined as new and useful processes, machines, devices, manufactured items or compounds, or any new useful improvements to the same. The data also shows the number of patents awarded here has steadily grown every year between 2009 and 2013, when 77 patents were awarded locally.
Ricci attributes the growth to an increasing awareness of the importance and the benefits of developing a personal brand, which, in many cases, is best achieved by utilizing a combination of the four areas of intellectual property rights: patents, trademarks, copyrights and trade secrets.
While many businesses and entrepreneurs use a combination of these, others may rely on patents or trade secrets—which, broadly speaking, can be any confidential information that is not generally known or ascertainable by others, and provides a competitive edge—to separate a company from competitors.
“It really depends on what you are trying to protect,” Ricci says. Therefore, weighing the potential risks and rewards of obtaining a patent is paramount before ever investing in the process.
DAUNTING AND COSTLY
If time is money, then obtaining a patent is undoubtedly one of the most daunting combinations of the two.
Securing a patent generally takes between two to four years and can cost anywhere from $10,000 to upward of $40,000. And once you start investing time and money into the process, there’s no guarantee that you’ll actually end up with a patent in hand.
So whether you’re trying to navigate the complicated process yourself with the help of online resources or hiring a patent attorney for professional assistance, time is of the essence for a number of reasons.
“Inventors are working against the clock, both in terms of other inventors and their own actions,” says Ricci.
He notes that the U.S. is now a ‘first to file’ patent system, meaning that except for a few exclusions, the first inventor to file an application with the USPTO will be deemed the inventor for that invention.
“But the inventor also is on a clock against his own actions,” Ricci adds. “By statute, an applicant has one year from his or her own first public disclosure of the invention to file an application or the invention is deemed to have lost its novelty as a matter of law.”
In Baton Rouge, higher education and research institutions fuel the majority of the region’s innovation (see graphic), while large corporations such as Albemarle and IBM constitute a close second. However, just because a patent originates here doesn’t mean the Capital Region will see the economic return, says LSU professor and Vice Chancellor of Research and Economic Development Kalliat Valsaraj.
“One of the things I would say clearly distinguishes Baton Rouge from other metro cities is that many of the industries that are in this area don’t have their research divisions here that much, so whatever patents are produced here are not immediately translated into useful products by the industry here,” he explains.
“I try to emphasize to people these days that yes, locally innovation happens, but it may not remain local. It may become more of a nationwide thing because most of the industries are located elsewhere.”
Nonetheless, Valsaraj says the concept of entrepreneurism is spreading throughout LSU’s faculty and researchers (see graphic, page 30). “A lot of faculty are now interested in that activity, and that is very positive,” he says. “The atmosphere at LSU has changed dramatically over the past few years to make sure that faculty knows that entrepreneurialism and economic development is a major part of what we do here.”
When it comes to pursuing a patent upon which to build a business, considerations and best practices for navigating the process are unique for every inventor. Factors like financial resources, business goals and the function of the product or invention largely determine the best path to patentability.
“The challenge sometimes is the nature of the patent process—that you will publish for all of the world to see what your invention is,” explains Warner Delaune, a registered patent attorney with Baker, Donelson, Bearman, Caldwell & Berkowitz.
A patent requires the disclosure of an invention, setting forth very specific claims with protection for 20 years. On the other hand, a trade secret allows an inventor to keep their invention confidential—and the protection can last in perpetuity. Both have their benefits and drawbacks.
“One of the benefits of a patent and a drawback of a trade secret is independent creation,” Ricci explains. “If I have a patent and someone independently comes up with my idea and starts making and selling it, if I have a patent before they do that, I can go after them for infringement. But if it is a trade secret and someone independently comes up with it, as long as they did not come up with that information through a misappropriation of my trade secrets, then I have no recourse against them.”
Large corporations and universities have the benefit of in-house counsel to navigate the complex and expensive patent system at no cost to the individual researcher.
“One of the main advantages, whether you work for a corporation or a university and you are interested in patenting, [is] at both of those places you have structure already in place that can help you through maze of paperwork before you can get a patent,” says Valsaraj, who holds two patents of his own. “Even with that, I would say corporations are probably a lot easier to do things with, or through.”
And then there’s the lone entrepreneur who has little more than an idea and is faced with the decision of either trying to obtain the protection of a patent, or roll the dice and move forward without one. Ricci advises entrepreneurs in this situation to seriously evaluate the specifics of their idea and develop a strong patent strategy from the outset.
“Not everything can be patented, nor should a company or inventor attempt to patent every innovation,” he says, adding he advises entrepreneurs to ask themselves if they simply want a patent or if they truly need one. “Objectively evaluate your situation and how your invention would impact your business.”
Even once a patent is secured, tough decisions and high expenses remain. A primary consideration is the ongoing responsibility of protecting the patent, in addition to thousands of dollars in maintenance and other fees that are due incrementally throughout the life of the patent.
While pursuing a patent is a gamble in itself due to the uncertain return on the investment of time and money the process requires, the rights granted to entrepreneurs through a strong patent contain the security on which they can build a successful business. Research, capital, trust and—perhaps above all, patience—are all needed to make it through the complex process.