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Manufacturing And The Law With Tyler Dunham (MFGMonkey Episode 15)

MFG Monkey | Manufacturing And The Law

Today, we sit down with Tyler Dunham. Tyler is an Intellectual Property Attorney/Registered US Patent Attorney, and the CEO of Dunham IP Law LLC. We discuss patents, trademarks, trade secrets, and much more. Go check them out on their website

Dunham IP Law LLC is a law firm based out of Columbus, Ohio. Their practice includes all areas of patent, trademark, copyright, software, and trade secret law, with specific expertise in patent and trademark prosecution.

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Manufacturing And The Law With Tyler Dunham


Tyler, welcome. It has been a long time in the works. 

I haven’t seen you in a long time. You guys have some exciting stuff going on here. 

We have Tyler Dunham on the show. We have the infamous Nebraskan back on the show. We’ll see what value he adds besides hanging out. Tyler and I have been buddies for a long time. It’s been 10 or 12 years. It’s exciting. This is our very first episode in our own building. It’ll be a lot of fun. I cannot imagine a better person to have our first episode in here. Thanks for coming. 

I like seeing all the random parts scattered around and asking questions. It’s a nice nerd manufacturing you got here. 

We all like to nerd it up. Tyler, you are a mechanical engineer and a patent attorney. What a hell of a combination. With that, tell us a little bit more about yourself and we’ll get rolling.

My background was in engineering. I spent most of my time through college doing internships with different companies, doing everything from large energy systems to a lot of research and development for automotive systems. I then moved into more consumer product development, which I enjoyed the most. The client comes in and they want to build a new product. They have ideas and things, but it’s our job to flush them out and find something that will satisfy all their needs that we could manufacture and ship to them at a cost that they can afford to make a margin on. 

That was where I cut my teeth, manufacturing for purpose, design for purpose, design for manufacturing, and learned solid modeling, tooling, and all those good skills. I then went to law school. I wanted to expand myself and keep learning. I knew there was an opportunity there for anyone who had a tech background to pair that with a law degree. There would be some opportunities there. Law school was a big change from engineering. I was a fish out of water for sure, but like everything, you adapt and learn and you get through it. 

I learned a lot of great things in law school, even aside from things I would apply for engineering work or patent work. I clerked with a large IP firm here in Columbus for about two years through law school. I went there for about eight years after law school working for all different types of clients from all over the world, mostly doing patent prosecution work, as well as some litigation and licensing. About three and a half years in, I left to start my own firm. I’ve had my own firm Dunham IP Law for about three and a half years now with a partner who works with me here in Columbus. 

We represent clients, not only on their patents but all of their IPs. We do trademarks and branding all over the world, as well as copyrights and software law, trade secrets, and stuff like that. It’s been good. I enjoy the constant learning that I have to do every client has a new machine or a new technology, a new set of problems, or a new set of competitors, and I like being able to learn and move and adapt to what their needs are, and learning more. I round myself out as an engineering person and lawyer as the more that I learn. I like being in private practice law because of the variety of challenges. It’s fun.

The most important thing you left out is your being in a band, which always blew my mind when I first met you. This dude is an engineer, is an attorney and he has a band on the weekends. When do you sleep? I don’t know, you’re a machine. It’s always been interesting. Remind us what that band was called at that time. 

That band was probably Capital Sound, which was a cool ten-piece soul, funk, and blues band. The horn section and all that fun. It was a lot of fun. I was the band leader and everything though. I got to be a little too much. I try and run a law firm, as well as a band and all the other things I like to do.

You’re still playing. 

I am. COVID pretty much nipped most performances in the bud, but we still rehearse here or there. I’m in an original band now too. We’re writing songs and recording and trying to make the most of this time. Music has always been a part of my life. It’s it’s been around forever.

Your parents got you into it. I remember you telling stories about you guys playing music as a family. 

I still have a nice little little family band every holiday. We get together and jam and no song with more than four chords. That’s the max. We can have anything more than four chords in a song, but we’ll pretty much play them and sing them. I love it. 

While most families get together and they eat and drink too much and argue, you guys are doing something productive. 

Nowadays, you keep the arguments to a minimum when you’re playing Creedence songs and Beatles songs. It’s pretty hard to be upset about that.

Dan has been with me going on a year coming out not being involved in the manufacturing industry at all. He gets to see a lot of different things, which complements what you get to see and for that matter, what I get to see. The fun part is nothing is ever the same. Every part is different, every engineer is different that we deal with, and every project is different. It is a lot of fun. For us, we marry all these different people together. 

A Challenging Patent Deal Story

What better to have than a patent attorney or mechanical engineer when we run across people they can lean on? We’ve had that a couple of times. Travis Snow has reached out to you here in the past. There might be a cool opportunity there. Start out with a story about one of the most challenging patent deals that you have worked on either recently or in the past. 

I’m a mechanical engineer and my bread and butter is machines and electrical things, real tangible stuff. When patents get challenging, it’s usually when you get into the ones and zeros. Your magic sauce is your software. That’s getting more and more difficult to protect for a number of reasons. A lot of it is because I cannot point to a figure or a drawing and show you, “Here’s why this is different from that.” You’re talking hundreds of thousands of lines, maybe millions of lines of code, and there’s no way to easily show you and point to you why this is different. 

Whereas with machines and with circuits and sensors and systems, I can show you why this is different and why it’s better. In the world of software, it’s very challenging to quickly be able to describe something very complex in terms that are general enough so that you won’t be able to walk around my patent. All the people who call me about apps are very challenging now. 

I won’t say impossible, but it’s very tough and software in general, even for people who are doing some pretty revolutionary things like machine learning and others, it’s very difficult to quickly describe something that complex and compare it with another very complex systems and explain why in 2 pages or 3 pages or less, why this is different or this is better in some way. Those are the most challenging patents for me probably. It’s anything that’s mostly based on the software that’s going on in there. The physical parts and pieces are the same as everyone else’s, but the software is different. 

It reminds me of a story. I cannot remember what the company’s names were in it. Even if I did, we probably shouldn’t name them. It reminds me of a Columbus-based company that ended up working with a company out in Dallas. Amazon loved its technology. It was a straight technology. It was all system driven but it gave them the opportunity logistically to move pieces and parts to auto warehouse like no other company has ever been able to figure out. Amazon came in and posted that they were very interested in buying their software.

They spent 6, 7, or 8 months at this little company helping develop all this and then pulled out and went away and said, “We’re good. We figured we’re not interested in it anymore.” They stole their idea, developed it, and repackaged it. The Columbus-based company got involved because they were a logistic-type company that deals in warehouses. When his dad started it, they sold pieces and parts. That is how they started. 

Protecting Our Intellectual Property

He got involved and ended up buying these guys out because it bankrupted this tiny little company. It was like 4 or 5 guys, and one of the first things that the small company wanted to do was patent their product. The story that I told was that I don’t want to patent it because we have to reveal our secret sauce. He’s like, “We’ll leave it alone. People are going to try and steal our idea but they don’t have access to what it actually is or the recipe of what it is.” They’ve left it alone. What is your thought on I guess that plan with software?

That’s a very valid approach to those kinds of situations. That’s the line a lot of times you have to walk when you’re deciding, we’ve got something great here and we want to protect it as best we can. What is the best strategy? A lot of times it comes down to reverse engineerability, if that’s a word. It comes down to how easily you can reverse engineer or something. If it’s pretty easy to take this thing and put it in front of some smart people and they can figure out how it’s working, then you probably want to try and get that patent even though it might be expensive and it might take you awhile and maybe they’ll even be questions that to how broad it is or how valid it is. 

Once people know what you’re doing, you cannot put that cat bag in the bag. It’s tough to protect something once it gets out in the public unless you have a patent. Trade secret protection is your other route with those types of things, whether it’s code or whether it’s a chemical composition or whether it’s a manufacturing process or something like that. Trade secrets technically last forever. They don’t have any limit to them, but they’re a little more difficult to license because you don’t know exactly what you’re licensing sometimes.

Once something is public, protecting it becomes very difficult, unless you have a patent. Share on X

Great lawyers will keep you out of litigation by drafting good contracts.

You have to be very careful about how you treat them. This is my biggest message to anybody who’s trying to maintain trade secrets at their facility. That is go over the top with your paperwork and your passwords and restrict access to certain areas only for certain people. Make sure that when the day comes and the judge says, “I want to see all the things you’ve done to protect your trade secrets,” you can show that. You can show it in a lot of different ways. If you cannot, then the judge is going to say, “You don’t have a trade secret here because you haven’t protected it.” 

Just because it is a secret and the people don’t happen to know about it doesn’t necessarily mean it qualifies as a trade secret. You have to take these affirmative steps to protect them. That’s day one on a trade secret litigation. They’re going to say, “Let’s see what you’ve done to protect this.” If you cannot support that, then the judge will probably say, “I don’t think this is his trade secret here and you’re not deserving of any protection.”

Great lawyers will keep you out of litigation by drafting good contracts. Share on X

Even with trade secrets, when you take all those steps to protect them, if they get out, whether it’s a nefarious former employee, whether it’s hackers, whatever it happens to be, once it’s out, it’s out, and everybody sees it. There’s no way you can stop someone from copying it or using it unless you have a patent. 

It’s like that original company, even though they didn’t do it with a company like Amazon, they probably couldn’t even go after them if they wanted to because they never took the approach to do anything.

Somebody like Amazon is so big and powerful that even if that small company had a patent, they would probably tie them up in re-exams in the patent office litigation for years. They squeeze you. There are a lot of bad stories out there of people who’ve tried to do business with Amazon or other large companies, and it seemed great. Everybody was nice. At the end of the day, they were brain-draining you to get everything and then they were going to build a competing product or a competing system. 

It’s tough because everyone wants to take a business opportunity when it’s there, especially if someone is knocking at the door and has purse strings. People want to do business with them for a lot of reasons. It’s very valid. As an entrepreneur, you have to balance the risk with the possible reward. Look at the business and determine if this is something you need. It’s tough. For people in that position, it’s difficult because if your technology isn’t necessarily defensible or protectable by patent, you’re relying on first the market things and growth and that stuff to squeeze out competitors. If your competitor is a Goliath, it’s going to be difficult.

I don’t think you could have an NDA powerful enough to protect you against a company like that unless they have endless funds. 

I tell people all the time that an NDA is a contract. You guys I’m sure know people break contracts all the time. They sign it saying, “I’ll do this for you. I’ll do this,” and then it all goes out the door. NDA is no different. They’ll argue in court that, “This happened and that happened so we had to breach this NDA.” They’ll have armies of lawyers that will stretch that case out for years and make it very difficult.

It is frustrating because we’ve had it happen to us where we sign a contract and you’re going down one path and there’s a hiccup and we’ve had a company pull out of a contract. It’s like we have a contract. It’s not worth the paper it’s written on if you don’t have the integrity to back it up. A lot of times, the bigger thing in business is the integrity behind the person that ink the paper. If they don’t have any integrity and they don’t do anything, especially as a small company, what are you going to do? 

You ruin the relationship. You give your company a black eye because now they’re like, “Macmillan Co’s litigious. Let’s not do any business with them because we have a hiccup.” The first thing they’re going to do is fire up their attorney’s hotline and go. It’s a balance of trying to work through it and ignore it and move on with our life and hope some good karma comes in the future. It is an interesting game that you guys play for sure. 

Going to court is the worst option for anyone unless you’re an Amazon. If you’re an Amazon, they want to play in court all the time because they know they have the muscle to win. I tell my clients all the time, that great lawyers will keep you out of litigation by doing good contracts. Maybe we did sign a contract and then COVID or something hit, and it’s changed. Let’s go back to the table and let’s say, “Guys, what can we do?” Let’s renegotiate or whatever. Let’s not throw the whole thing out. Let’s renegotiate.

If you continue to do that, and you and you stay in touch with each other, and you do a good contract from the beginning, then that’s going to help you so much. I always feel like a wet blanket because two people get together, they have a great idea, and they want to start doing business together. I’m like, “Hang on. What if he screws you? What if this happens? What if that happens?” The answer is, “Tyler, you’re such a naysayer, and you’re always thinking of the worst possible scenarios.” I’m like, “Guys, if it’s never going to happen, then we’ll put it on paper. It’s never even an issue. If it does, you’ve got this eject button, or you’ve got a clause in here that specifically kicks in.”

I agree. Were getting ready to press release with CuGrip that you and I were talking about out in the warehouse. We did a big contract. I’ve known Larry Cole, one of the owners. Victor is the founder of the company. He’s a mechanical engineer, a young dude in Victoria BC, a brainiac. Larry and I were the ones that pushed the contract. Victor was like, “Do we need a contract?” Larry and I are both like, “Yes, we do.” If this is the only time that we ever look at it, awesome. The next time that we need to look at the contract is when something goes sideways.

The biggest thing with that is if either company decides to sell or you get another partner, once they have a personality conflict. There are all kinds of things that could happen where we’ve invested and they’ve invested so much money that you don’t want somebody to easily be able to walk away. 

Too many people feel like, “This person I’m doing business with today is a nice person.” They have a track record of honesty. That’s great. He could be fired next year and they bring in this shark and guess what? He’s not getting along with you. You still have that contract there. It’s always important. That’s probably a lot of the worst situations I’m getting clients out of because they never did any contract and they started charging ahead in business.

The reason a lot of people do that is that they don’t want to feel like they’re insulting you by writing all these like, “I would never not pay your royalties,” or “I would never not deliver on time.” That’s that’s a big mistake. The other mistake too is thinking that that person you’re doing business with today will be the same person for years. They can change. Someone else can come in new. The board gets a new person on the board and the board decides, “We want to slash costs. Who’s this supplier? They are way too expensive. Get them out of here.” They don’t care that you’ve been doing business for 20 years. They don’t care. They’re new and they want to make a name for themselves. They want to up profits however they can. It’s always important. 

A final point on this is that people think contracts need to be more complicated than they need to be. Even initially, get something basic down. “Here’s what I want to do. Here’s what you want to do. Here’s our plan. Maybe we will supersede this with a more lengthy agreement later about details of international things or whatever. For now, this is what we want.” You walk through the process and get yourself there. A contract does not have to be 50 pages.

Legalese in it. That is the difficult part is even with the contracts that I’ve reviewed, some of them are written and they’re so hard to understand. It almost seems like the attorney is stretching their own ego by writing in this language that nobody understands. You read another contract and it’s by an attorney that’s more down to earth. It gets the same point across. It’s as legally binding as the other contract, but everyone can understand it. It’s always funny to me and it never fails. The contract that is written by the guy that you can understand, or the girl or whatever, it’s inevitable that they have the biggest ego in the room. They’re the guys walking in with the shades and the $5,000 suit and that.

They want to put all these words in here that you don’t even know what they are.

I’m googling half of them. Let’s scrap this and start over. They need to be in place and one of the things we do is agreements quite a bit and we run into that all the time, “We have a good relationship. Do we need this?” I’m like, “I’m not worried about you. You and the company today, if you sell it to some asshole tomorrow that I don’t know, that’s who I’m worried about.”

He takes on a new investor and this investor is a little prick.

Patents Vs Trade Secrets

It is and that’s a good negotiation or communication style. It’s not that you and I are worried about each other. It’s like being married. You’re not worried about each other. It’s the other person that you don’t know about yet. One of the things that you wanted to talk about is patents versus trade secrets. Talk to us a little bit more about that. What does that mean?

I started to scratch at that a little bit before, but it’s something that comes up a lot with clients and I thought would be interesting to talk about today, especially in the manufacturing world. It comes down to the way that you treat that technology. Let me back up a little bit. The first step when we’re looking at these things is, are we going the trade secret route or are we going the patent route?

You need to make a definitive decision on it because 1) You need to implement policies, procedures, and paper that’s going to back up your trade secrets, and 2) If you’re going to have to file patents, you need to file them. I don’t know how many people know this, but there is a sort of clock that starts running that you need to file your patent applications. It usually starts as soon as you use or sell or offer to sell the device in public in some way. 

There is a time period when you need to file your patent applications. It usually starts as soon as you use, sell, or offer to sell the device in public in some way. Share on X

Research, prototyping, all those kinds of things, that’s not going to start your clock, but when you go out and you start offering it for sale, when you go out and you start advertising it or go to a trade show and show it to people, a lot of people would say your clock has started. That gives you twelve months to file your application in the US patent office. That’s number one. A lot of issues that people run into is they delay it. 

Understandably so, they don’t want to put money into a product that they aren’t sure is going to sell. They want to wait and see what’s the feedback. What do my customers think? What do the people think about this? Unfortunately, if you wait too long, then you’ve lost it. That is an even harsher penalty on the international stage. In the USPTO, we have this one-year grace period. Foreign patent offices are not as nice. They’re called absolute novelty patent offices and they say, “Anything you’ve done in public before filing, you don’t get a one-year grace period. It’s invalidating your patent internationally.”

For clients who are only playing in the USPTO, they have still that one-year grace period, but for my clients who I know are going to try and pursue a patent internationally or somewhere else, then I know that we have to get this thing filed before ever you go with it publicly. That’s the big thing too. We have to make that decision before we go public. The decision for the most part, as we were talking about, comes down to whether or not the product can be reverse-engineered. That’s usually the way.

Your typical Coca-Cola and things like that, the chemistry for those kinds of things have been held as a trade secret for probably over 100 years now and may stay that way forever. Whereas if they would have patented it, it would have run out a long time ago. That’s the biggest thing that you have to think about when it comes to that. Certain technologies are ripe for patenting and that would be physical things, whereas other technologies that are based on software, based on chemistry, or maybe even based on some natural sciences might not be the best for patent protection. It might be better for trade secret protection.

With the trade secret, you don’t have to disclose what the recipe is or your secret sauce of whatever your trade secret is. 

A trade secret begins as soon as you have created it and you have some policies, procedures, and papers to keep it secret. You would never go around barking about, “We have trade secrets.” The way you would see that in public would be to say, “We have proprietary technology on blah, blah, blah.” That’s commercial speak for we have trade secrets that protect these things. 

The word trade secret is a legal construct that comes up when you go to sue someone for taking something, stealing something, or using something that they don’t have permission to use. As I was saying before, the first step is going to be proving that this is a trade secret. One, you’re going to have to show that no one else has this. It truly has to be secret. If lots of other people have essentially the same piece of code or the same chemical composition, then it’s not a trade secret because everybody has it. 

The word “trade secret” is a legal construct that comes up when you sue someone for taking, stealing, or using something that they don't have permission to. Share on X

We all have a general idea of what you’re doing there, but if it isn’t known and derives value from not being known, then it would be considered a trade secret, provided you can prove all of the steps that you took to keep it secret. A lot of times we might think that that’s easier to do than it is. It does take some diligence. When you’re going through your day-to-day, you have the high-priority items that you have to deliver for customers, then you have a bunch of paperwork that lawyers, accountants, and other people tell you need to do. 

It’s like, “I got to keep the lights on. I got to fill these two contracts and send out these invoices. The lawyers and the accountants can wait until tomorrow.” I understand why it’s very easy to put that stuff on the back burner and then lo and behold, it doesn’t become an issue until someone steals it or if you want to go to court and the lawyer says, “What do you have to show that you’ve protected this.” I try to work with my clients on that because it’s subtle. It’s not as obvious as patents and some of those other things. 

Beginning from your employee intake forms, make sure that they’re signing things that say, “I know I’m going to learn things here that are secret, and there’s value to that. I’m agreeing that I’m going to hold that stuff secret.” All of those kinds of things. Making sure that there’s enough paper to back up the fact that yes, we think this is secret. We’ve done everything we can to try and keep it secret. It’s an important thing. It seems like they don’t realize that that process has to start years ago. They always want to start the process when we’re about to file a lawsuit or something like that. If the judge finds out that you started that a week before we filed the lawsuit, you can say it’s purely for litigation. You weren’t protecting it. 

Design Patent Vs Utility Patent

That is interesting to me because I guess I never even thought about trade secrets versus a patent. With the trade secrets, it’s a secret. Who am I going to tell that I have a secret to? That is interesting if you have a recipe or whatever, like KFC spices. How do you protect that? You have all these employees mixing it and you’re ordering all the ingredients from all these different vendors and you could pick it apart and know exactly how much peppers in it or how much flour in it or whatever. That is very interesting that I never would have thought of. The other thing that you wanted to talk about was design patents versus utility patents, which I know nothing about either. I guess I could take the context and run with it.

I would think if we put a gun to your head, you could come up with a pretty good description of the two and you’d probably be pretty close. 

Explain to us the difference between those. 

I wanted to talk about it because I thought it’s something that comes up a lot and even for sophisticated people, there’s a line between those two and it’s hard to draw it sometimes. Your utility patent is your traditional patent. It’s going to have a set of figures and then a written description that describes everything that’s going on in the figures. 

It’s going to have these lengthy run-on sentences at the end of the patent, which we call claims, which is what we are describing as our invention. This is what we have created that no one else has created. When you go to determine the infringement of that patent, you’re going to look at those claims and see if those claims are found in infringing devices. It’s for something that has physical pieces in it that we cannot find anywhere in the prior art.

It’s in a combination that we cannot find in the prior art. A design patent is going to go more after the aesthetics of how something looks. It’s not going to be focused on, “We’re the first person that’s ever made a bottle opener.” We’re not saying that. The first person that’s made a bottle open and it looks like an alligator or whatever. The other classic example that I love and you guys would probably remember this is the old sports-illustrated football phone. Do you remember when you subscribed to Sports Illustrated, you would get this phone that like looked like a football? 

Dan, you got to have one. Maybe not anymore. 

Somebody’s got one probably. Sweet collection of cool memorabilia, but I always remembered it as a kid and it came up a million times during the patent bar and everything. It is a great example, because there’s no reason functionally that phone should look like a football. It doesn’t add to reception or comfort in the handset or anything like that. It’s purely just, “This looks cool. No one else has done that. We want to get a patent on that.”

For a long time, probably before my time or in the ‘80s and very early ‘90s, a lot of us viewed design patents as not that powerful because I would change a little feature. I would change this element or then the alligator bottle opener I would make his tail a little different or I would do this and I would say, “I avoided your patent.”

People started filing a lot of design patents on what we would consider more industrial products, everything from dock loaders to the iPhone and the iPad. Those were huge ones because it was very simple devices. You’re talking about a square with a little circle button on it. How in the world can you protect that? What real value is there in that? Apple and Samsung sued each other for billions of dollars.

Samsung wants to pay like $700 million or something, but it was eye-opening for a lot of us in that maybe one of the most valuable patents in the whole Apple portfolio wasn’t this amazing encryption technology and all the other stuff that’s inside of it. It was the way that it looked. No one had a phone that was so clean and crisp. That was a great eye-opener for a lot of people. Those patents are more powerful than we thought and they should be used as such. 

If you have a product that maybe is a combination of other stuff that other people have done before and it’s not necessarily bringing some new huge technological feature to the table, but it looks a certain way, and people like the way it looks. Design patents are a great route for that. The nice thing with design patents is they’re much less expensive than utility patents, both to draft and get them. You can file multiple of them on the same product with different features included in each one so that you set up a minefield for someone to try and if they’re trying to step around this patent, they stepped right into this one.

It’s very common to file multiple design patents on one product, even though your commercial version looks only one way, but we have 3 or 4 different patents that all protect different kinds of elements of it. What’s nice about them too is proving infringement seems to be much easier because I show you a picture, “Here’s our thing and their thing.” When I’m in front of a jury, it’s way easier to tell the story, “We built this great thing. They copied us. They should have paid for that copying.”

In the utility world, I have this very long sentence that might be anywhere from 30 to 100 words long, busted up into segments and each word has its own meaning. If I say a clamp that is perpendicular to this surface, what does a clamp mean? Is it a permanent clamp or a temporary clamp or two surfaces that touch that clamp? You have to fight all these battles in utility patents that make the litigation extremely expensive and very questionable because you cannot look at a device and say, “That infringes.”

It’s very hard and I spend a lot of time doing opinions for people on whether or not something is infringing by doing that analysis and design patents are much faster, and much easier. They’ve been overlooked for a long time. It seems like more and more, especially for your small company startups, to get yourself a design patent or two to start building that portfolio. If you have somebody that likes a product or whatever, you can license that to them and you do it. 

Whereas utility patents, it could be a 3 to 4-year battle to get it. There could be questions at the end as to exactly what it covers. Sometimes for resource purposes, you only have a certain amount of money to spend. My mantra with clients a lot is to get every ounce of every dollar that we can in protection. If we’re going to spend a few thousand dollars, let’s get the biggest bang for our buck that we can and move on to the next problem that you have in your company. 

My mantra with clients is to get every ounce of every dollar that they can in protection. If they’re going to spend a few thousand dollars, get the biggest bang for their buck that they can and move on to the next problem they have in the company. Share on X

I never want patents to stick in the way of what my clients are doing. I want them to flow with their business. I get very nervous when someone’s business model is we’re going to get all these patents and then we’re going to license them to people or whatever. That’s a very risky, extremely dangerous business model. What you need to do is build something people love, and then have a great IP portfolio that follows along with what you’re designing and building, but trying to find a space and then say, “We’re going to get all the IP on it,” and then shake everybody down and try to get license fees from people. That’s a difficult business. 

It seems stressful to try and go down that path. It’s like you are opening yourself up for a lifelong journey in court.

It’s a lawyer’s dream probably for companies like that and I would get a lot of work out of it. I always put myself in my client’s shoes. I always think when I do that and even as a lawyer, I’d rather have low-hanging fruit in my business. I’d rather know that there’s a goal to be achieved here, I’m going to get it and then I’m out. That business model is more designed for shooting for the moon. If we hit it, we’re going to hit it huge, or we’re going to go in a huge hole with a bunch of lawyer fees and all these other things and nothing at the end of the day to show for it. 

At least if you’re running a business and making a product, if your patent fails or it falls apart, or you lose in litigation, that’s okay. We’ll go make another product for someone else. You keep doing what we do to make money. If everything is based on a patent portfolio that could rise and fall, depending on whether Amazon wants to attack it or whatever, it’s much more difficult to defend. I would have trouble sleeping at night thinking that I’m going to make some money. 

We’ve had some customers that have come to us with things that they want to sell. I’ve asked the question, “Is this patented?”They’re like, “No, and we don’t plan on it.” I’m like, “Okay. What’s your business plan behind this?” For me, if I want to put my money into it to have it manufactured and sold, we dig pretty deep into what their business plan is and their financials and all those fun things. 

The one thing that I’ve always loved to hear the most is that we want to create such a rock-solid brand that we know somebody is going to rip this off at some point. We want to be the Kleenex of whatever this is. It’s always referred to as a Kleenex, regardless of who makes it. I’m like, “Okay, that sounds legit to me.” It sounds like a solid business model that I can get behind. They want to be the standard in that space, regardless of who rips it off. 

They’re like, “We don’t have the energy. We want to sell so many of these out of the gate and create such a brand and such customer service that we’re always the standard.”- It makes a lot of sense to me. At that point, they can go down the path of design patent versus utility patent or whatnot. A lot of those things seem very interesting to me. What is your thought on that? Would you persuade somebody differently if they had something that was easily copyable? 

I’m glad you brought that up because trademarks are a huge part. We’ve been talking patents mostly because we talk about manufacturing everything here but trademarks are the first rung of protection for your business. I don’t care if you are a brewery or a little local Italian restaurant, or you’re doing machine learning automated robots. Everyone needs to establish this is our brand and this is what we’ve created our name on and I’ve seen clients have so much success. 

It seems like there’s so much more success exiting a company, selling a company, or licensing out any technology when it includes a good brand behind it. It was well thought out and it was carried through consistently through things they did and they had a culture that was very good. Everything was very nice. When that big fish came in, they liked their design patent and that’s nice and all but what they wanted was that trademark. What they wanted was that brand because that was what connected with people. 

That was what took off and trademarks are very inexpensive compared to utility patents but still inexpensive compared to design patents. The value that they can turn around could be millions of dollars in your corporate evaluation to have a couple of good registered trademarks that are valid. I wouldn’t feel too nervous when someone comes saying, “We know someone’s going to rip this off. We’re teeing this up for an exit.” 

Trademarks are very inexpensive compared to utility patents, but still inexpensive compared to design patents. The value that they can turn around could be millions of dollars in your corporate evaluation to have a couple of good registered trademarks… Share on X

I don’t think that’s a terrible business strategy because in my personal opinion, and this would be a good question that I would love to ask you too, is that the big companies right now don’t want to innovate. They want to sit back and let other people dabble in the laboratory and gobble them up once they’ve shown some traction. They’ve shown that they got a million freaking likes or a million like on their Facebook page or whatever. “This is real. Let’s go have a meeting with them and see what we can do.”

It’s almost like you built the whole business up to be this enticing carrot for these larger companies because it seems like they don’t want to quite take as many risks. They’d rather the small companies do that. If they’re successful, they’ll come in and make an office to offer to purchase. I don’t think it’s terrible. I always tell them that because I’ve sat across from lawyers debating how much a company is worth and all this stuff. They’re always going to push back and say, “You don’t have any registrations. You don’t have any patents.”

You don’t have things to protect what you’re going to sell me when you sell me this business. I’m buying your operations and your inventory and these kinds of things. We want to have a paper that shows that you’re getting this patent. You’re getting this trademark registration, you’re getting these real things and that’s how I can then push back on an evaluation when they’re like, “We think this company is barely $2 million,” and you guys think it’s $20 million. The way we push back on that is the value of this IP and stuff. That’s the only thing I always say, but that can be done through trademarks and design patents. It doesn’t have to be done through $100,000 and utility patents. 

Patentable Subject Matter

That leads us to the third thing that you wanted to talk about, the patentable subject matter. That’s an attorney term right there. Patentable subject matter. I don’t think that’s ever quite flowed out of my mouth before, but it makes sense and that is like what does make sense to patent.

I should have phrased the question a little better now that you mentioned. That was like teed up for lawyers. It should be titled What can you patent? That should be the question and forever the answer was you can patent pretty much anything except for naturally occurring things. If you go and dig in your backyard and you find this amazing titanium alloy, that’s incredible but you cannot patent that. You didn’t make that. You found it. You cannot patent mathematical formulas and physics and things like that. Formulas and mathematics are not patentable. It’s not a thing. It’s a theory or an equation that describes it.

You can patent a machine that works on a formula or works on an algorithm or something like that. That’s perfectly fine, but not the algorithm itself or the actual mathematical equation itself. You cannot patent that. That was the answer forever. We patented anything under the sun, especially on the software side of things. 

That was starting to get a little carried away when people were patenting everything from tax prep method software, where you would put different tax things into a box. An HR block and all those guys. How do I minimize my tax strategy? They built these very sophisticated algorithms and great pieces of software that’ll tell you real quick, “You should be filing as a single with this over here.” They were getting those patents. 

There were guys getting patents on hedge funds or hedging investments where there was an equation that would calculate the risk in this investment and then the risk in this investment. I’m going to put some money in here. For years, that was fine. Until a few years ago, we had a case called Bilsky. The Supreme Court took up one of these hedging algorithms and they said, “This is what investors do.” You’re trying to patent being an investor. 

My computer walks through these steps, then I infringe on your patent. The Supreme Court made a very huge knee-jerk reaction and tried to draw a line in the sand by saying, “These types of things are not even patentable subject matter anymore.” The issue that was created was what the heck? What do you mean? Is it these kinds of investment things or does it include blockchain and legit technology that is new and very useful and should satisfy all the requirements of the patent office? It’s created a lot of problems in that world. That was why earlier I was saying that it’s some of the hardest patents.

Is that still in court?

The Bilsky case is long done, but we’ve had a string of probably twenty cases at least since then that have come up to the court over and over and saying, “What about this one? Is this okay? Is this one okay?” It’s been haphazard. Sometimes the court will say, “Yes.” You have to remember these are Supreme Court so they have no tech background. 

You try to explain blockchain to them and they have no idea what you’re talking about. It’s not in the proper venue. It should be done in some special area of Congress full of scientists and engineers and entrepreneurs and corporate people who can say, “This is what we should be protecting and this is what we shouldn’t be.” Unfortunately, we aren’t getting much done at all on a congressional level. 

This is a very complicated problem that is getting pushed to the bottom of the pile. What has made it bad is the blockchain. While that is still patentable, it’s starting to become trickier and trickier. Machine learning is amazing stuff and is going to revolutionize our manufacturing and automation. They are trickier and trickier and very difficult to patent. More than that, the Supreme Court, when they made this initial holding, listed out all these different things that they now view as not patentable subject matter.

You cannot get patents on these anymore. One of them was naturally occurring things. That was always how it was. That’s fine from I dug this up in my backyard or I discovered this, or whatever, and I cannot patent this. What it’s now carried into is gene sequencing and biotypes of things where people are patenting the idea that if I see this certain marker in your DNA stream, then I know that you are susceptible to breast cancer. I know that you are susceptible to that.

I know you’ve got Corona because of this little weird thing in your DNA right now. There are a lot of questions as to whether or not you can patent any of those diagnostics anymore because of the holdings of the Supreme Court who have said that things that occur naturally in nature are not patentable. They have struck down where they had cloned an animal and they were saying that the technology used to clone this animal is patentable because it’s an animal. It’s a goat.

It wasn’t a naturally occurring goat because it has the same DNA as the one next to it which could happen even with siblings or even with exact twins having different DNA. It’s been a real issue for people in the medical diagnostics community. I’ve heard murmurings that it could have something to do with our issues with testing in this country that we cannot get great people to solve this problem because they aren’t convinced if they put $400 million into finding a solution, they’ll have the protection. 

They’re a little worried that either the government is going to take it and give it out free or various other things or any investor who’s putting money into these companies wants some guarantee on their return, some protection for what they’ve got. That’s created a lot of issues in the bio world. We’re due for a lot of amazing inventions in the bio world, whether you’re you see them 3D printing live tissue. You see all these incredible things happening now, which is this weird blend of additive technologies plus bio things. The future is bright for that stuff, but the question is whether or not investors will back it if you cannot patent it.

I had no idea anything about that and it’s sad looking from the outside in. Being that’s the case, it’s going to take somebody very passionate about an issue to sink money into that to come up with a solution because everyone does everything for a return. I would think once that law, there’s a decision made on it, as you said, it’s either going to open up to floodgates and everyone that has these ideas that are locked in their basement somewhere coming up with new solutions, they’re going to finally come forth with them or it’s going to be lost forever if we don’t make a decision. Where do you think where we are in that decision? Do you have any idea?

It seems like the ultimate answer is going to be some act of Congress when we all sit down and decide that this will be it.

Is it even an open discussion with Congress right now? Is it active? 


It’s going to take probably a big pharma company or somebody with a tremendous amount of money to push that to come to a decision and try and lead that in the direction that they want it to. The obvious answer is if it’s not an act and you’re creating a process with the algorithm, then you can patent the process. To dumb it down to my level, if you are using an algorithm to get a widget from this corner of the warehouse to this corner of the warehouse and you’re using math to guide it, the math itself isn’t patentable, but the process and the machinery to get to the end solution is patentable. 

What’s the difference in that situation? Even though it’s way more complicated, you’re using math and you’re using blockchains and you’re using technology to get from point A to point B. You don’t have a cure to having a cure. I guess I don’t understand the difference of why that wouldn’t be patentable. You cannot patent the goat. I understand that you cannot patent the goat. The goat is off-limits, but to get the goat from goat A to goat A, you have two A goats. You can patent the process, I would think. That would make sense. 

In the cloning process, you’re right, because a cloning process does not exist in the real world. This is getting a little into the weeds, but process patents are different than product patents. They’re enforced in different ways and things like that. We usually like product patents because that’s what’s out in the public. I can see if you’re infringing on my client’s patent, and we can do something about it. 

When my clients have process patents, it can be tricky because I need to see your factory, I need to see your process, I need to see your cloning process, I need to see the steps that you took, and how much you inject here and things like that. That’s very hard to get unless I sue you. You can do discovery and then I can see all that stuff. I don’t want to be going into lawsuits with my fingers crossed that hope that the evidence is there that they infringe.

It comes down to the difference between products and processes in that example. When you’re talking about a system that uses a mathematical formula or some law of physics, you have to be careful as a patent drafter to try and leave that stuff out and focus on the overall system and its design and structure, and say that there’s some algorithm running in the background that’s going to make decisions of what we do, and not get too much into exactly what that is. 

Document And Protect Yourself

At the end of the day, I’ve heard you go through multiple different trade secrets, trademarks, and patents. The one thing that you said constantly the whole time is documentation and protecting yourself from day one. That would probably be your most important advice to get to anybody.

I think so. Especially with trade secrets. Documentation in general for when you’re onboarding new people and stuff like that, that’s tough in a startup. Everything is moving so fast and people are coming, people are going, and the building is growing, building shrinking, we’re getting new buildings. It’s hard to keep up with all that. That’s the challenge of people running a startup. Can we get all the paperwork done in addition to all the daily stuff that we have to get done? A lot of people may have probably a little nervous about engaging with lawyers early on. 

The challenge of people running startups is getting all the paperwork done in addition to all the daily stuff that they have to. A lot of people may also be a little nervous about engaging with lawyers early on. Share on X

Whether it was a bad experience in the past whether they figured they were too expensive, or whether they assumed that we can only work with the biggest firms downtown, $400 and $500 an hour attorneys. If you find someone that you trust and sit down with them, it doesn’t take a tremendous amount of their time or your time to walk through like, “Here’s what we’re doing. Are there any red flags that are jumping out at you?” Things like that because it’s so much easier to get ahead of this stuff and try and piece it back together after the fact.

That’s a huge point. Do business with people that you like. We have it on our freaking website. If you’re likable and you sit down with the guy and the guy or girl wants to charge you $800 to listen to your idea, then he might not be the right person. They’re probably so busy that they want you to go away anyway. We see that all the time where we’ll quote something. Somebody brings a widget to us to make and we may not have the perfect manufacturer for it. We send over an RFQ to get it quoted. 

Instead of calling us and saying, “This doesn’t fit us,” the part should cost $50. They quote it and it’s $500. I have to call it. I’m like, “Jim, tell me you don’t want to make it. That’s okay. Instead of throwing this. We don’t want to make a price on it. Have a conversation with us.” That goes so far with so many different businesses, especially with the startup and a new idea that they’re not a big conglomerate coming up with a new product with fresh entrepreneurs. It is having a conversation. If somebody doesn’t want to have a conversation with you, then move on and never look back and find somebody who will have a conversation with you. 

The right person will be so passionate about helping people that they’re there. They’re going to have a conversation and they’re going to guide you and they’re going to be like, “Buy me lunch. Buy me a cup of coffee and we’ll go sit down and talk about it. If it’s a good idea, then great. If it’s not, then whatever, I got to meet you and we can go on.”

That’s the fun part about what both of us do. I know it’s helping people, and Dan brought an idea to the table shortly after you started here. It was a golf widget, i-powered golf. Brand new design. I have no idea. They may need to talk to you. I don’t know, but it’s a cool product. Connor, the engineer that we hired, helped draw it and put it there. They came to the table with a design on a napkin. The guy was making it in his garage. 

He has a design patent. 

I didn’t know that. Interesting. It’s a hell of a product but it was fun for us. This thing takes off. It’ll be fun for us to be involved in. The guy can never get anyone to even talk to him. It was so interesting to me. I’ve worked at companies that are like that. They’re like, “There are 100 of those types of widgets out there.” I’m like, “What does it cost you to invest twenty minutes in it?” If they want to buy 30,000 of them, even though you think it’s a shit idea and they can pay for it, let them invest their money however they want. 

If you think you’re so smart that you can sit down with someone who invented a product and sold 300 or 400 of them last year, but you’re so smart that you already can tell me the trajectory of his business, how much he’s going to sell, how much the brand is going to identify with people. Even if he remodels it or redesigns it or whatever next year, he won’t make money. If you are that smart, you should be on Warren Buffett’s payroll.

You should have your own product.

You should be a billionaire because you can see the future and you invest perfectly. It’s crazy. I’ve seen people come into my office and I’ll look at the product and I don’t get it. I don’t understand it. I don’t know why people buy it. I would never build it myself maybe, but they find a way. What do I know? I don’t know this industry. I know my industry. I can tell you what might happen on the patents and what might happen on this side or whatever. The world is crazy. You have no idea what’s going to be a hit and what’s not going to be a hit. 

You hit the nail on the head. I have a horrible taste in dressing. If it was not a T-shirt and some flip-flops or whatever, then I want nothing to do with it. I see people wear things all the time, especially my daughter. She wears something and I’m like, “Is that fashionable?” She’s like, “Dad, have you looked in the mirror lately?” I’m like, “You’re right. Wear whatever you want, as long as it’s respectful.”

I go to that because I do think that so many people dismiss and judge, especially entrepreneurs who have never started a company. I’m sure you’ve been told you were crazy for starting your own firm by somebody, and then it drives you even harder. Now, I have to succeed because I don’t want that guy to be right or that person to be right. Same thing. We bit off this and I had people like, “What in the hell are you doing?” It’s like, “I don’t know. We’ll figure it out, but I don’t have anything to prove to you but I do.” 

It is fun. With new products, it is even more fun. Anyone can make a product that has been made for some sort of legacy item. They’re fun to have, especially for us because of purchase orders for a million of those a year and we’ll make the hell out of them and do a good job, but the thing that is fun for us is new products never been made before. There are parts in here that I’ve been told that there’s no way it can be made. Dan, behind you, that tusk or a part of that, I was told that it was impossible to make.

That’s a bold statement. 

Impossible. I have an email from somebody. I had that part right there a tusk the Benz on that, I was told impossible to make. They’re both here. They both match the drawing. 

They exist.

It’s hilarious when people tell me that something is impossible to make. Now, I want to prove them wrong. We’ll get wrapped up here. We’ve been talking for over an hour now, but one of the guys who is a good buddy of mine up in Wisconsin was on. He and I are geared in the same. He’s a mechanical engineer, worked at Caterpillar on their diesel program, worked at Merck Marine, holds a couple of patents, super crazy smart guy. He’s the guy that I call and I’m like, “Aaron, I’ve been told that this cannot be done.” 

He’s like, “Send me the drawing.” We sent him over the drawing and he’s like, “That’s a hard one. I’m like, “Do you think you can figure it out?” He’s like, “I don’t know but I’m going to try like hell just because.” He did. He’s the one who made both of those parts that we were told that was impossible to match the drawing. It’s people like that will go the extra mile. His shop is probably a sixteenth of the size of the shop that the guy who told me that it was impossible to make. It’s awesome.

It’s so much fun to be able to go back to that guy and be like, “Guess what?” One of those parts that the guy told me was impossible to make, I have 420 of them sitting on my floor with two of those parts per part. We made it, 840 of these things, very successfully. He’s like, “They’re lying to you. Those don’t match the drawing.” I walked down to Connor and I was like, “Connor, do those match the drawing?” He’s like, “Exactly.” I’m like, case closed, moving on. 

It is fun. Thank you so much. Why don’t you tell everyone how to get in contact with you? Everyone, we’ll put our thing in the description in the bio. You can email us at We can always put you in touch with Tyler. Tyler, what’s your website, email address, phone number, Snapchat, TikTok, and Tinder ID? All in there. 

Just one more time. My name is Tyler Dunham. My firm is Dunham IP Law, based in Dublin, Ohio. You can find us at My email address, if you want to shoot me an email, is Those are the best ways to reach out to me. I do not charge any consultation fees, none of that stuff. Let’s have a phone call. I’m happy to answer your questions and get you on the right path.

To wrap up, the value that I, Dustin, and all of his team bring you is that there are lots of people out there who can make you a billion widgets over and over, but someone who can come in and solve the new problems that you have and new issues and stuff that you’ve never seen before, and you’re trying to build for the first time or deal with it for the first time. That’s when we come in. We help with that. Dustin would share my feelings. A phone call is always productive, whether it results in business or doesn’t. It’s a good thing. 

It’s a lot of fun and I know that that’s what gets both of us out of bed in the morning, and a few other things. 

Leave that for the next podcast. 

Maybe never. Thanks, man. 

Thanks, guys. 



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