Shark Tank and Patents
Shark Tank and Patents
The hit ABC television series Shark Tank has brought patents to the mainstream. In each episode of Shark Tank, small entrepreneurs pitch their businesses to a panel of five big time investors (the “Sharks”). The entrepreneur asks for an investment in exchange for a percentage of the business. Before investing, the Sharks ask an array of probing questions, aimed to uncover the risks and opportunities inherent to the business.
Shark Tank Illustrates the Importance of Patents for Start-ups
In practically every episode of Shark Tank, a Shark inquires about the entrepreneur’s patent protection. Here are a few examples of questions that probe the entrepreneur’s patent position:
- “Why do I need you?”
- “Why can’t I just go an make this myself?”
- “Is there anything proprietary about your product?”
- “What’s your secret sauce?”
These questions illustrate the importance of filing a patent application at the United States Patent and Trademark Office. Without claiming an invention as property by drafting patent claims and filing a patent application, the inventor risks being scooped. For example, a large investor could compete with the inventor (rather than investing). The large investor would probably win on account of having more resources. Accordingly, an inventor is well advised to protect the invention before disclosing it to anyone . . . especially savvy business people like the Sharks.
The Shark Tank Application Stresses the Importance of Patents
Shark Tank is a reality TV program. Notably, in 2012 “Shark Tank” received an Emmy nomination for Outstanding Reality Program and a nomination for a Critics’ Choice Television Award for Best Reality Series. As a reality TV program, the contestants are members of the public. Each contestant must submit an application, describing various aspects of the business. In the application for season 5 of Shark Tank, the “Application Packet” includes an entire section entitled “Intellectual Property Questionnaire”.
The Intellectual Property Questionnaire includes questions like these:
- “Describe the circumstances surrounding how you conceived and developed your business.
- Is your business in any way related to your past employment? If yes, please describe the relationship and provide a copy of the applicable employment agreement.
- Is your business an improvement upon any current product, service and/or idea? If yes, please list the specific product(s), service(s) and/or idea(s) and how you have improved upon it/them or what differences exist between them.
- Describe any third parties … that offer products or services similar to or competitive with your business, including the differences between them.
- List any third party intellectual property (e.g., patent, trademarks and copyrights) that you are aware of that relate in any manner to your business or may otherwise impact your business.
- Have any records or logs been kept with respect to your development of your business . . . inventor logbooks, etc?
- Do you own or have you applied (or intend to apply) for any patents and/or copyright and/or trademark registrations in connection with you business? If so, explain (include filing date, application type (e.g., provisional/utility/ITU, etc.), application number, serial number, publication number, jurisdiction(s) filed in, assignments, status (pending, published, issued, expired, abandoned, etc.) and/or issued patent number/registration numbers, as applicable).
- Are you the sole creator, inventor …?
- Have any of the products or services ever been manufactured, offered for sale and/or marketed? If yes, please give details and dates….
- Has a patentability search or a trademark or copyright search been performed and/or a legal opinion rendered in connection with your business? If yes, please provide the name of person/entity performing the search and/or rendering the opinion and the date of the service.
The above-listed questions emphasize how important intellectual property is to a start-up business. Each of these questions (especially the italicized terms) probes facts that are important to determining the strength of the inventor’s intellectual property. Often the inventor’s idea is the most valuable part of the start-up business. Accordingly, owning that idea should be a high priority.