To call Fatih Ozluturk a prolific inventor does not do justice to what he has accomplished during his career. Ozluturk is an inventor with 186 issued patents and 181 pending patent applications. His inventions have been licensed to every major cellular OEM, and have generated over $1 billion in licensing revenue.
Clearly, Ozluturk is not your average inventor. But his enormous commercial success is only half the story. Yes, he has a PhD from University of Massachusetts, which you might expect, but he also holds an MBA from the the Wharton School. So not only is he an extremely successful inventor, but he has keen insights into the business of innovation like few others do.
Today Ozluturk is a Principal of the Soryn IP Group, and also Director of Patent Strategy at Liquid Patent Consulting. He is also an entrepreneur and an angel investor, he teaches workshops in the NYC startup community and he is the author of the book “Patents. Simplified.”
I had the pleasure of interviewing Ozluturk on January 20, 2015. During part 1 of our conversation, which follows, he talked about the importance of taking the time to file at least a provisional patent application, saying that provisional patent applications are like chicken soup — they are good for everyone.
Without further ado, here is part 1 of my 2-part interview with inventor, investor and software expert Fatih Ozluturk.
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QUINN: Thanks for taking the time to chat with me today, Fatih, I really appreciate it. I know you are an inventor of great renown in the wireless space and you’ve had a lot of success and I understand now over last several years you’ve been working with a number of startup companies at a very early stage. So I thought we might start with a discussion about what kind of understanding of the startup process do you see out there and what is it that you tell innovators who want to go down this startup path to get them going?
OZLUTURK: That’s a great topic, Gene. Thank you for the opportunity. I’ve been investing as an angle investor in a few tech companies and I’m a venture partner at the Entrepreneurs Roundtable Accelerator in New York City. I spend a lot of time teaching workshops to startups and individual inventors who are asking how they should protect their intellectual property and how to get the most out of patents as business assets as their companies grow. Within that context I see a lot of startups. I get calls from people from all over the country actually asking questions about how best to protect their intellectual property. In the course of those conversations I’ve seen some questions and issues come up over and over. So as time goes on I refine my workshops and address those questions.
One thing that I would say to startups when I speak with them is that they need to first decide whether to protect the intellectual property that they’re generating, because as you know patent protection is not free. It is not only a commitment of resources in terms of money but it is a commitment of time and mental energy on the part of the inventors, on the part of the management of the company. If you look at a tech scene such as New York, there are a lot of companies where technologies or products that are in media, social networking, advertising technology and other software and Internet businesses, and not all of them may want to pursue patent protection necessarily.
Patent protection is not as effective for ever technology, however, I do advise most companies to file at least for provisional patent protection. By filing provisional patent applications they have a filing date preserved while they continue to raise money, build their technology, and assess the future value of what they’re building. So I would say provisional patents are like chicken soup. It is good for everybody. Even a startup with strained resources can afford to file provisional applications. As a result of the American Invents Act and the fact that the United States is now a first inventor to file country, it is advisable for any company to file provisional applications as soon as they have a meaningful invention and have the ability to put it down in an application and file it. So, that would be the most important advice I can give. First decide whether you need to file for patent protection and if you do, then make sure to file quickly using provisional patent application process and gain the time to assess the viability of your technology, and the viability of the company, over the 12 months that is afforded by the provisional application.
QUINN: I think that that’s great advice. The first thing you always want to do before you just rush off to the Patent Office is to spend some time thinking about what is it that you want to accomplish. I suspect you spend some time advising people who are starting small businesses, truly small businesses that are going to create an app for example. Maybe in that scenario it doesn’t make as much sense to seek a patent. And I don’t think a lot of apps really are patented because the business model just doesn’t lend itself to that because the life cycle for the app is probably going to be very short in most cases. And there may be some money to be made doing it but not enough to recoup the cost of ultimately getting a patent.
OZLUTURK: Absolutely. You hit the nail in the head, Gene. For a lot of the technologies the cost of filing a non-provisional application may not be a good investment because of the life cycle of the technology. And also, as you know, after the Supreme Court’s Alice decision, software patents are not as easy to get issued. It requires a little more thoughtful patent prosecution. Some things that used to be patentable a few years ago are clearly not patentable today. For some inventions where a few years ago I would have said okay this is great, just go file a patent application, today I may say, well you should think about it twice because this may be considered an abstract idea and there may be patentability issues. Guidance from the Supreme Court makes getting software patents issued a little more difficult for a lot of software Internet companies.
For some companies, money will be spent better by hiring another developer or doing more digital advertising, because the name of the game may be gaining traction faster than someone else rather than protecting your turf or your technology by filing patent applications. However, there are many other companies, even in the software Internet space, that actually have technologies and services that are firmly patentable even in the post Alice world. Those companies should file for patent protection, and make good use of provisional patent applications. It makes a difference to have a patent strategy from the beginning and develop your portfolio accordingly if you want to have a meaningful portfolio some day.
That is one of the things that we do at Soryn. We work with companies in developing their patent portfolios from the beginning to the end because the patent prosecution and patent portfolio generation has become somewhat too sophisticated and too specialized for many people to fully grasp and execute properly. I run into companies, especially in New York, that have very interesting products with specialized technology, algorithms, new ways of looking at big data and user analytics. There are a lot of inventions that are completely patentable and for those guys my advice is to file soon and file frequently.
QUINN: Going back to app developers, I think there is nearly always value in filing at least one provisional application early on. Now I’m speaking from my own experience as an inventor, by the time you realize that there will be money to be made it’s going to be too late to do anything about on the patent front. And that problem is only becoming more of a concern in the first inventor to file world that we live in right now. So I can’t stress enough when I talk to startup entrepreneurs that they really must get at least one foot into the game at least to hold open a patent option. Would you agree?
OZLUTURK: I fully agree with you, and I also stress the same point to a lot of startups. I focus on three points. One, you should file for patent protection because the cost of filing a provisional application is very small. In other words, not having resources to file a patent application is not an excuse any more. A lot of entrepreneurs are very smart, they work hard, they make the time to document their code, they make the time to document their products. And they make the time to write up provisional applications that are good quality and that could be filed on their own. So the cost of filing a provisional application in terms of time and effort investment is also very low so why do it? That is point one.
The second point is related to my perspective as an investor. I’ve invested in New York City accelerators as well as in individual companies as an angel investor. When I look at a company and see that the founders took the time to file patent applications, whether I believe that the patents will issue or not, it indicates to me that this is a group of entrepreneurs that understand their technology, they take it seriously, they run their business as a serious enterprise. They protect their intellectual assets. They’re seeing it as something more serious than just a weekend project. So it indicates to me a certain level of seriousness and attention to what they’re creating. And it indicates to me a certain level of pride in what they’re creating. This is regardless of whether their patents eventually issue or not. To me, making the effort and filing a provision application always reflects well on the company.
And the third point is that the current climate, especially for software patents, has moved quite fast to a point where a number of things are not patentable today although they used to be patentable a few years ago. But as you know from the history of how the patent law evolved in the U.S. throughout our history, things often swing back and forth. There is no guarantee that the pendulum will not swing the other way. In other words, things that we feel are questionable as far as patentable subject matter today, may be perfectly patentable a number of years from now. Given the typical length of patent prosecution, I would say why forfeit all of that now? Filing a provisional application, even if you’re on the fence, is a good idea.
In light of those three points, I say it is a good idea to file patent applications. Even for app developers, even for people who feel patentability of what they’re building is uncertain, I’d still recommend filing patent applications especially if you’re meeting investors, especially if you’re trying to get into accelerators. Because all of that, to me, is part of running your company diligently and being proud of what you’re building.
QUINN: I agree with you. I think that filing an application early is really important. I think it can be relatively inexpensive particularly when you’re dealing with people in the software area who if you’re really on the fence and you don’t necessarily want to rush out and hire an attorney, there are other solutions. I have a $99 do it yourself solution that results in a quite detailed provisional application and in the software world, and the reason I say particularly in the software world, if you’re doing your software development right whether it’s an app or whether it’s a huge mainframe project you have some kind of a design document that explains what has to happen, where, how and why. So you’ve got all that written down somewhere anyway so it’s not like you haven’t spent the time to put your thoughts to paper. So why not file it and get some protection going?
I want to circle back to something you were saying because as you were saying it it struck me; I hadn’t really thought about it quite this way until I heard you talking about it. If you look at somebody who’s seeking some investment or some help with an innovative startup and they have filed some kind of a patent application you look at them a little differently. You look at them as more serious, they have pride in your work, I think you said. But I think you also look at them in a way that says, you know, these guys get it. They’re business savvy and they’re doing the right things. They’re taking the time to cross the t’s and dot the i’s, which so many entrepreneurs don’t do. I think that’s why so many entrepreneurs go out of business. They don’t do things in a methodical way from step one to step two. They want to run to the finish line before they even run the race, so to speak. And when you’re investing, whether as an angle or a VC, investing in the people is as important maybe if not more important than the technology because so many startups are going to fail. So you have to have some sense that the technology’s good for sure, but you need to have some sense that the people that are involved get it.
OZLUTURK: Absolutely. And I will give a very definite example from the accelerator that I’m involved with and some of the companies we have had over the years. We had a company, which I alluded to in a previous piece at IPWatchdog, that had a creative technology and these guys got acquired by a leading industry player although they had competition and their product was somewhat similar to other things in the market place. Key differentiator was that these guys had a number of patents they had filed and this was seen as a sign of running their company as a serious business and having a certain level of process in place. And also the acquiring company felt that had they acquired someone else, for about maybe the same price, there was a chance that down the road they were going to end up paying royalties to license the patents from this particular company anyways. So it actually tilted the discussion in this startup’s favor and they were acquired beating out their competition. So I’ve seen a real example of this play out.
As I speak to more and more entrepreneurs I definitely see that the importance of intellectual property protection is being recognized. In earlier classes of the Entrepreneurs Roundtable Accelerator maybe there would be one company who would file a provisional application, or maybe not. In subsequent accelerator classes that number went up as people learned more about the process and understood the cost and effort required, and as they recognized this was something they could afford to do. It’s fairly cost effective. And now it’s not unusual for me to see three, four companies file multiple applications in the course of an accelerator class. A misconception I work to correct is that many inventors believe they need to write up something that looks like an issued patent before they can submit the application. That looks scary to many entrepreneurs. As you know for a provisional application requirements on the format are pretty loose actually. You could file PowerPoint presentations, screen shots, even your handwritten notes as long as you PDF them together. And as long as all that description comes together in a way that meets the disclosure and enablement requirements, a patent attorney can rewrite that or format it and organize it in a better way during the non-provisional patent application filing. So, for the provisional application you don’t have to spend a lot of time on the format. And the more the people understand that, the more companies file for patent protection. Which I really like seeing.
QUINN: I agree. I think certainly there are very few if any real requirements for a provisional other than that it explains what the invention is as completely as possible. And that can be accomplished with schematics. It can be accomplished with flowcharts. I always tell people in the software space that flowcharts are worth their weight in gold. And I don’t think that even non-provisional patent applications by and large are filed with enough drawings. And in the software area particularly filing a software application without a multitude of flowcharts is a mistake. Because that’s what ultimately you’re going to have to spend time figuring out and hand over to whoever’s going to do the coding. And I think some of the problem with startup folks in the software space is when they don’t want to put in the time to give the information that’s required to go into a patent whether it be to a patent attorney or in a provisional that they’ve created themselves. The problem stems from this race to the end. I want to get to the finish before I’ve sat down and I’ve thought about all these different steps.
One of the frustrating things—and I’ll give you an example, a very simple software like a plug-in for Word Press. There are all kinds of those out there. Hundreds of thousands, perhaps millions of different plug-ins and many of them just don’t work. It’s not because they are ill-conceived, it’s because the carrying out of it the implementation is awful because they didn’t stop and think the one cardinal rule of software is that anything that can go wrong will go wrong, Murphy’s Law, you know? You have to engineer these things so that humans don’t break ‘em, which is not easy.
CLICK HERE to CONTINUE READING… up next we discuss how difficult it is to write good software and why companies really need to approach software development as an engineering problem and systematically proceed step by step rather than simply rush into coding.