Knowing the patent pending products selling dangers is important as a business. Here's everything you need to know about the potential drawbacks and downfalls when selling products that are still patent pending.

What Are the Dangers of Selling a Patent Pending Product?

Applying for a patent with the U.S. Patent and Trademark Office (USPTO) and getting a patent pending status does not legally protect you from infringement. There is still the danger that someone will copy your invention and sell it as his or her own. Protection comes after your patent issues. You must be careful when presenting your invention to others to minimize your risks.

The biggest danger of selling a patent pending product is infringement. You do not need a patent to sell a product. However, it does help protect you from infringers. People do not want to spend the money to copy your product if they know there is the potential for a lawsuit.

That's why it is always better to get patent pending status for a product before going to market. This does not always stop an infringer. However, it gives you a means to sue for damages if your patent issues.

Beyond dealing with possible infringement, selling a patent pending product comes with other dangers:

  • Negotiating a fair price for licensing.
  • Obtaining an actual patent.
  • Filing patent applications in foreign countries.
  • Monitoring competitors.
  • Educating consumers about your product.

Some inventors spend ample money on the patent process only to find out their product is not patentable. You should get a patent attorney involved in the process early on. He or she can do some research to determine your chances of getting a patent. It does not make sense to go through the costly patent application process until you have an invention or an idea that is truly unique and patentable.

How to Protect Your Patent Pending Product From Knockoffs

Inventors often worry that someone will try to knock off their idea. Competition is a real threat. However, it is rare for a company to spend money to knock off a product in the idea stage. Product companies work on several new products at the same time. They have a backlog of cases. They do not spend much time worrying about adding new products. Therefore, inventors do not need to worry about knockoffs as much as they think.

If you can't help but worry about the danger of knockoffs, you have some options. You can ask the company you approach about your product to sign a nondisclosure agreement (NDA) that includes a noncompete clause. You can also wait until the patent application is filed and your product is patent pending. These strategies are risky because they could prevent you from getting an introduction in the first place.

An alternative to a patent is registering a trademark. It costs significantly less money and comes with additional benefits. You can assert the trademark by using the (TM) symbol after your product's name.

As an additional protection to product knockoffs, reserve all domain names that are close or similar to your product. You also want to watch your competition carefully and alert it early if you have concerns of infringement.

How to Make Money from a Patent Pending Product

Inventors typically make money in one of two ways: licensing their invention to another company or manufacturing the invention themselves. The first step for both of these strategies is filing a patent application with the USPTO.

  • Licensing Strategy: Many inventors choose to license their patent pending product to other companies. Licensing is the easiest method because you don't have to set up the manufacturing and distribution channels yourself. You simply create value through your patent; then you can sell your idea.
  • Manufacturing Strategy: Manufacturing your own product is completely different than licensing. You don't have to worry about value during the early stages of patent pending. Instead, you can focus on manufacturing and distribution. You can take measures to reduce the risk of another company knocking off your product. The main advantage of manufacturing your invention yourself is that you retain more profit in the long run.

There will always be risks, regardless of the path you choose to take with your patent pending product. A patent is the only legal way to protect your product or idea from competitors. Unfortunately, a patent does have some limitations.

  • A patent's protection is limited to specific design elements and functions presented in the patent application. You cannot add new elements once the patent is issued.
  • If someone is infringing on your patent, you are responsible for filing a lawsuit and notifying the infringer. There is no "patent police" to take care of this for you. Entering a legal battle is time-consuming. In addition, it does not always pay off.

Creating a Selling Strategy

You need to have a strategy for selling. This is true whether you are licensing or manufacturing your patent pending product.

Selling online is different from creating an in-store setup to sell your product. Each requires a detailed description of what your product is and what it does. However, this messaging should be as concise as possible. Consumer education is a major hurdle to jump. This is why product packaging is so important.

There is also an art to setting up an in-store display for your product. You should make sure you receive a prime selling location in a store, such as a main aisle. If your product is tucked away in a corner, you won't sell as many items. Then, arrange your inventory in a clever way to draw attention. Other selling techniques, such as only stocking 90 percent of space or having coupons nearby, can also improve your success rate.

Remember to design packaging that catches the eye and clearly describes the purpose of your product. You also need targeted advertising and a PR campaign to spread the word. Early on, it's most cost-effective to focus on trade shows and targeting retailers, but you'll eventually want to branch out to educating the general public. Once you place in major retailers, you can advertise more aggressively. Just remember that placement doesn't guarantee sales. You still have to work to make that happen.

To secure your retail location, you need to prove you're a reliable vendor with good customer service. You should also work on creating complementary products that expand your retail footprint. This will help establish your brand and prevent people from turning to knockoff products.

What Is Patent Pending?

It takes the USPTO a long time to review your patent application. During the review process, your product is patent pending. You can claim this status as soon as your patent application is submitted. However, this does not grant you legal protection.

You do not automatically get a patent after filing an application. The USPTO carefully reviews your application, checking it against others. A patent reviewer then decides whether to:

  • Issue the patent
  • Ask for revisions
  • Deny your application.

This process can take anywhere from one to three years. If your patent is particularly complex, it could be patent pending for even longer.

The quickest way to get a product patent pending is to fill out a provisional patent application. This document requires less information than a utility patent application or a design patent application.

However, there are two drawbacks to a provisional patent application:

  • The patent pending status only lasts for 12 months.
  • A provisional patent application does not lead to the issuance of a patent.

You must fill out a nonprovisional application to get a patent reviewed and issued.

Many inventors worry their invention is not protected during the patent pending time frame. This is because you cannot sue someone for infringing on your patent pending product. You must wait until your patent issues.

Even though there's a waiting period to sue, patent infringement damages start to accrue from the date the patent application was submitted to the USPTO, as long as the patent issues. Therefore, submitting a provisional patent application as early as possible can grant you ample protection. Nobody can come along and steal your idea, even if he or she makes significant changes. They still must have permission for the part of your product they stole. The patent pending term carries a lot of weight. However, you can't seek legal compensation for infringement until the patent issues.

Common Mistakes Inventors Make

Protecting a product when going to market is full of legal situations. The way you treat these situations can affect your invention and its success forever. Some mistakes can even prevent you from attaining a patent. Some of the most common mistakes inventors make can be prevented.

  • Selling your invention too early. If you have not filed for a patent, be careful when selling your invention. In the U.S., you only have 12 months to apply for a patent after the invention is sold. This can affect your ability to file a foreign patent application because of public disclosure laws.
  • Using your invention in public with no intention to patent. You only have 12 months to apply for a patent once you start using your invention in public. If you are not ready to enter the patent application process, do not share your idea with anyone. You can have the same problem even by offering to sell.
  • Not keeping good records of the invention. Most patent applications are several pages long because of the level of detail required. If you haven't been keeping good records of your invention, it may be difficult to fill out your patent application. Keeping records help an inventor stay organized, and witnessed journal entries are needed under present patent laws. Poor records can also lead to a poorly written provisional patent application. You have 12 months from the time you submit a provisional patent application to also file a utility patent or design patent. An unclear provisional patent doesn't help much with the actual patent process or help establish the intended early application date.
  • Not performing a professional patent search. To save money, many inventors opt to do a patent search themselves. The problem is that there are more than 7 million patents on file in the U.S. Finding any prior art also takes time. A professional patent search turns up much better results. It can save you from making mistakes on your patent application.

Frequently Asked Questions

  • Am I protected when my invention is patent pending?

You don't have any real legal protection until your patent gets issued. Patent pending simply means you've filed an application for a patent. While you're waiting for the patent to issue, there is the danger someone can steal your product or idea and market it as his or her own. Luckily, you can sue for damages if your patent does come through.

  • Is it worth my time to fill out a provisional patent application?

Provisional patent applications are a useful tool when you aren't ready to file a nonprovisional patent yet, but you want to have patent pending status on your product. In the long run, it costs more money in the patent process to file a provisional patent. However, it buys you extra time to perfect your product. Therefore, in some situations, a provisional patent application is definitely worth your time.

  • Is there an alternative to filing a patent application?

Filing a patent application is not always worth your time or money. A patent attorney can help you decide if this is the right move to take for your invention. An alternative way to protect your product when showing it to companies is a nondisclosure agreement. This document can include noncompete clauses to protect your best interest.

Steps to Selling Patent Pending Products

  1. Submit a patent application to the USPTO.

    Before you can sell a patent pending product, you need to submit a patent application to the USPTO. This ensures you can legally claim the product is patent pending.

  2. Put a patent pending notice on your product.

    When your product is officially patent pending, it is a good idea to put a notice on your product and product packaging. This lets your competitors know they can't copy your idea without risking an infringement lawsuit. You should also include a patent pending notice on your website and any marketing material you create.

    Product packaging should clearly mark "Patent Pending." This protects you from people who claim they didn't know you were seeking a patent. Additionally, you should include your company name, logo, and copyright notice on your product's packaging.

  3. Buy liability insurance.

    If you can think of any way your product could injure someone, you should buy liability insurance. People are eager to sue companies about injuries, and they prey on new products. Keep in mind that insurance rates are negotiable. You need to declare if you intend to sell your product. However, most of the time, you can find affordable coverage.

  4. Look for places to sell your patent pending product.

    One of the hardest things about trying to sell a new product is finding a store willing to give your item shelf space. The patent pending title can help you negotiate deals with stores and also build credibility.

    Big companies do test marketing where your product is only available in a limited number of stores. If possible, you should be past the prototype stage when looking for a place to sell your patent pending products to have greater success. Professional packaging can also go a long way in ensuring the success of your patent pending product.

  5. Setup distribution for your patent pending product.

    It could take several years for your patent to issue. You should not wait until that time to set up distribution channels for your product. You can make money long before your product officially has a patent. The sooner you can set up distribution, the sooner you can start making money.

    It is not uncommon to have questions about selling patent pending products. It helps to have an attorney you can turn to for legal help. A patent attorney can help you:

  • File a patent application.
  • Sue people for patent infringement.
  • Give general legal guidance related to your patent.

You can choose from some of the top patent attorneys in the country through UpCounsel's database. Don't wait to check it out. An attorney can make sure you have the protection you need while selling patent pending products.

Can You Sell Patent Pending Ideas?

Not everyone that applies for a patent intends to sell a product. Sometimes it is more profitable to sell the idea. This is possible even before the patent issues. You can even sell your idea and transfer the patent application to a new person.

Steps to Sell Patent Pending Ideas

  1. Research the market.

    Before you try to sell your patent idea, you need to understand the value of similar products. You can hire a marketing firm to do this research for you or do it yourself.

  2. Set a value for your patent idea.

    Pricing is always a tricky subject. The value of your patent idea is basically what someone is willing to pay for it. Your market research should give you a good idea on how to price your idea initially. The negotiations can start from there.

  3. Prepare your sales presentation.

    Potential buyers want to understand your patent idea fully before they are willing to buy. If you can afford to make a prototype, this can go a long way in selling your idea. Along with a prototype, you should create a sell sheet to outline the invention and any other material you think will help with the sale.

  4. Start contacting potential buyers.

    Buyers aren't likely to fall in your lap unless they have been following your patent progress. You need to contact companies that specialize in similar products to your own to try and find a potential buyer. The hardest part is getting an introduction. If your sell sheet and sales presentation is well-prepared, you will have an easier time closing a sale.

  5. Negotiate a contract.

    If someone is interested in buying your patent idea, you need to draft a contract that defines the terms of the sale. Keep in mind that it is typical for companies to stipulate the deal on your patent issuing. Unless you have experience negotiating contracts, you should hire an attorney to help mediate the terms of the sale.

  6. Contact the USPTO to amend your patent.

    Once the sale is complete, you need to amend your patent to include the new owner's name. This is easy to do. Simply contact the USPTO to make the change.

How to Stop Copiers During Patent Pending

Complete patent rights aren't given to a patent applicant until a patent office officially grants them a patent. An entity or person who files the application on his or her invention is considered to have patent pending status until the patent gets issued or the application gets abandoned. It does not ensure a patent will be granted for sure.

The office may find the patent can't be granted because the application doesn't meet the appropriate requirements for getting a patent. For example, if they find the invention isn't original, the application will be denied. Patent holders don't have the same rights as those applicants who are in the patent pending phase. The reason for this is that not all applications will necessarily end up becoming a patent.

This means it's not suitable for applicants of patents to try to stop others from actively using, importing, making, or selling their invention that's written in detail in the application. This is due to the patent office possibly not granting the patent later.

Can Anything Be Done With Copiers During the Patent Pending Phase?

A part of the law addresses patent applicants and states they can get a royalty for sales of services or products that a current patent protects. This covers copiers or those who intend to infringe. The name for this is provisional rights, which refers to an application for a provisional patent; it doesn't matter if the application was filed or not. An issue with provisional rights is that multiple requirements must be met, so the applicant will have provisional rights to protect against a would-be infringer or a copier.

The requirements include the following:

  • Royalties start only once the application gets published and aren't correlated with the application date.
  • You must give the copier notice of the application.
  • Any claims in the application need to be similar when you're granted the application.
  • You can't get royalties until the patent is actually obtained.

The biggest problem when it comes to requirements is the substantial identical requirements. Amendments get made to the claims during the prosecution stage where the attorney for the patent goes back and forth with the patent examiner, negotiating the scope of the patent protection. The end result is the patent being granted.

Notice Letter

While provisional rights might be uncommon, you might decide to send a letter to the copier and attach the notice of your patent application that's been published. This letter might state that the copier should stop what he or she is doing, or it can invite the copier to a licensing discussion. This approach can be helpful and effective, particularly if there are high costs for the startup and the design of the invention. However, the copier might choose not to invest in those costs if he or she will be required to shut down when you get a patent.

The copier can also decide to completely ignore your letter. There isn't any requirement that they must respond. The copier can say that you won't end up getting a permit or if you do obtain one, that it won't cover the services or goods that the copier is performing. The copier might also redesign the service or product in an attempt to avoid the subject of the patent application after he or she gets your notice.

Speeding Up the Application Process

When you find an infringer, you may decide to ask the Patent Office to expedite your patent application request. Sometimes there is an advantage to having a delay at the patent office, as the competitor will build a market which you can then take over or get the licensing fees once your permit is granted.

Other IP Claims

You may be able to make additional intellectual property (IP) claims depending on what your circumstances are, such as:

  • Trade dress infringement
  • Breach of contract claims
  • Trade secret misappropriation
  • Other infringement.

It's frustrating to find other competitors selling imitations of your product while your application is pending and hasn't been granted yet. Sometimes a simple notice letter to the copier will be enough. But other times, you will need to wait until the patent gets granted.

If you need help with the dangers of selling patent pending products, post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.