RVL becomes Tennessee's First Certified B Corporation Law Firm

Ridgeline Venture Law, with offices in Chattanooga and Cookeville, has become Tennessee’s first B Cor law firm and only the fifth such designee in the state.

A Certified B Corp is a legally structured enefit compan that is vetted for endorsement by the  global nonprofit B Lab®.  A benefit company is a new type of for-profit business with a governance model that considers all stakeholders in addition to profits, i.e. a triple bottom line approach to business with social, environmental, and financial accounting metrics.

Certified B Corporations meet higher standards of social and environmental performance, transparency, and accountability.  B Corps are important because they inspire all businesses to compete not only to be the best in the world, but to be the best for the world.  It’s like Fair Trade certification but for the whole business, not just a bag of coffee (or USDA Organic certification, but not just for a carton of milk; or LEED certification, but not just for a building).

There are over 2,200 Certified B Corporations from more than 130 industries in 50+ countries with 1 unifying goal – to redefine success in business.  The performance standards B Corps meet are comprehensive, transparent and verified.  They measure a company’s impact on all  its stakeholders (e.g. workers, suppliers, community, customers and the environment).

Traditional corporate structure requires directors to use profit maximization as the primary — if not only —  lens in decision-making.  Many businesses (us included) see this as a hurdle in creating long-term value for all stakeholders.  In positioning Ridgeline Venture Law as a B Corp, we are free to provide exceptional legal services without sacrificing the opportunity to  be a responsible corporate citizen.  As we like to say, when partnering with RVL, you partner with your community.

 

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Who Patents What and Where in Tennessee? (and Sewing)

THE U.S. PATENT AND TRADEMARK OFFICE'S PATENT TECHNOLOGY MONITORING TEAM PUBLISHES YEARLY STATISTICS AND TRENDS THAT ARE USEFUL FOR IDENTIFYING INNOVATIVE CAPABILITIES AND REGIONAL CONCENTRATIONS ACROSS THE STATE OF TENNESSEE. HERE ARE A FEW SNAPSHOTS:

Where does Tennessee rank among all states for patenting activity?

  • Ranked #30 for utility patenting (883 issued in 2015).
  • Ranked #25 for design patenting (138 issued in 2015).

Which Tennessee entities are the most frequent filers? (# patents issued over the last 5 years)

  1. UT-Battelle, LLC (aka Oak Ridge National Lab) (351)
  2. Smith & Nephew (315)
  3. Eastman Chemical Company (307)
  4. Nissan North America (267)
  5. Vanderbilt University (193)
  6. International Paper (148)
  7. UT Research Foundation (91)
  8. Bridgestone Americas Tire Operations (60)
  9. Wright Medical Technology (50)
  10. Radio Systems Corp. (43)

By comparison, what entities are the most frequent filers in California? (same 5 year period)

  1. Qualcomm (9,789)
  2. Google (8,818)
  3. Intel (7,593)
  4. Apple (7,525)
  5. Broadcom (5,587)

What are Tennessee's nerdiest neighborhoods? (Where are all the resident inventors, based upon patents issued over the last 15 years?)

  1. Shelby Co (7,126) 
  2. Knox Co (4,677)
  3. Sullivan Co (3,310)
  4. Davidson Co (2,577)
  5. Williamson Co (1,664)
  6. Anderson Co (1,316)
  7. Hamilton Co (1,203)
  8. Washington Co (874)
  9. Madison Co (872)
  10. Putnam Co (811)

Who's doing all the patenting in Memphis? (based upon the last five years of filing data)

  1. Warsaw Orthopedic
  2. Thomas & Betts
  3. Smith & Nephew
  4. SDGI Holdings
  5. St. Jude Children's Research Hospital

Who's doing all the patenting in Knoxville?

  1. UT-Battelle
  2. Siemens Medical Solutions
  3. UT Research Foundation
  4. Alstom Technology
  5. Lockheed Martin Energy Research

Who's doing all the patenting in Nashville?

  1. Vanderbilt University
  2. Illinois Tool Works
  3. Schneider Electric
  4. Electrolux Home Products
  5. E.I. Du Pont

Who's doing all the patenting in Chattanooga? (note there wasn't a single patent issued to any of these entities in 2015)

  1. Maytag
  2. National Starch and Chemical Investment Holding
  3. Card-Monroe
  4. Tuftco
  5. Akzo Nobel

What's being patented in Memphis? (according to PTO technical art class)

  1. Surgical instruments (class 606)
  2. Prosthesis (class 623)
  3. Drugs (class 424)
  4. Electricity: conductors and insulators (class 174)
  5. Surgery (class 600)
  6. On the rise: automotive data processing (class 701)

What's being patented in Knoxville?

  1. Radiant energy (class 250)
  2. Measuring and testing (class 073)
  3. Electrical communications (class 340)
  4. Stock material (class 428)
  5. Data processing (class 702)
  6. One the rise: ships (class 114); inorganic chemistry (class 423); image analysis (class 382)

What's being patented in Nashville?

  1. Drugs (class 424)
  2. Chemistry (class 435)
  3. Surgery (class 128)
  4. Financial data processing (class 705)
  5. Electrical heating (class 219)
  6. One the rise: prosthesis (class 623); data processing (class 700, 704, 706, 707); electrical audio processing (class 381)

What's being patented in Chattanooga?

  1. Sewing (class 112) (yes, seriously, the #1 outdoor recreation city in America...sewing)
  2. Synthetic resins (class 520)
  3. Electrical heating (class 219)
  4. Drugs (class 424)
  5. Stock material (class 428)
  6. On the rise: illumination (class 362); fluid handling (class 137)

The Hustle of an Invention Promotion Company

I recently assisted a client who was quite stressed when she first approached me, having been entangled in the complicated processes, promises, and contracts of an invention promotion company.  Like most customers of these promo companies, my client was a smart, but busy and inexperienced inventor who lived in a rural area; not exactly the meet-your-angel-investor-at-the-local-Diary-Queen kind of place.  I imagine she googled questions like "what do I do with my new invention?" and "how do I get a patent?" before linking up with this particular promo company, probably through an online ad. 

After a lengthy list of promises from the company of making her money, minimizing her risk, and LIMITED TIME ONLY deals, my client was persuaded to elect a paid package inclusive of a provisional patent filing, audio/video files, and other supposedly awesome stuff that could probably be obtained for free from a local small business development center.  Buried within her service agreement, and responsive to public disclosure laws, were data points concatenated by endless disclaimers effectively stating that the company over its long, profitable history has had less than a 1% success rate of closing net positive deals for its customers.  Now, which sounds better: "we sign a license agreement on behalf of an inventor every two weeks!", which sounds promising and is a common claim; or, "we earn less than 1% of all our customers cold, hard cash, while we rake in millions!"?  

Let me hammer this home with some random, comparable probabilities:

1) Probability of getting cancer: 50% men, 33% women.

2) Probability of living to 100 if born this year: 33%

3) Probability of being victim of a serious crime: 2%.

4) Probability of an adult male being afraid of spiders: 1.2%

5) Probability of being audited by the IRS: 1%.

6) Probability of realizing a net profit from the activities of a promo company: 0.95%.

7) Probability of dying in a car accident: 0.88%.

8) Probability of dying from firearm assault: 0.27%.

The rodeo is on, and unless you're careful, you may be taken for a ride by one of these companies.  Their marketing tactics are quite impressive, much better than mine, though it's hard to fairly compare since I try to avoid claims of riches while burying data that might belie such claims.  Unfortunately, they are more or less unregulated by the PTO.  In this case, awareness is your best defense to personal exploitation.

Resources

Overview: Office of Enrollment and Discipline Cracks Down on Patent Practitioners Working with Invention Promoters

PTO: Scam Prevention

American Inventor's Protection Act of 1999

FTC: Invention Promotion Firms

Common Mistakes by Entrepreneurs

Being an entrepreneur is not easy. In order to succeed you need a marketable idea, a solid team to rely on, and an incredible amount of energy and determination. You also need wherewithal to avoid some of these common startup mistakes.  

1)    Building something that nobody cares about. Many entrepreneurs confuse the drive necessary to build a company with the need to push an innovative idea and create a market. While there are iconic examples of ideas (e.g. Google’s PageRank) that succeeded in absence of market demand, generally it is better to employ customer discovery in vetting a new development, process, or technology through programs like Lean Launchpad.

2)    Believing in Family First or that Friends are Forever. If you’re not the biggest fan of lawyers, you can ensure the demise of probably 10% of them by remembering to contract for everything early on in the development of your company, most importantly the control and ownership interests of early stakeholders. If you think that it would be offensive to your high school sweetheart and wife of ten years to ask for a contract, remember that half of all marriages fail, and try to imagine how much more offensive it will be when her lawyer and your lawyer and your investors’ lawyers are fighting about control and ownership issues during divorce proceedings. If you think that you and your twin sister have a spiritual connection and can sit in separate rooms and simultaneously blink on cue, choreographed, and therefore would never let a silly little startup come between you, just consider what could happen when a freeloading boyfriend enters the picture and wants to play ‘I can help, I’m so smart’ while slowly moving from his frat brother’s couch into your sister’s apartment. Because these situations actually happen, it’s critical to memorialize interests early on, before the filing of charters or creation of accounts. You don’t need a legalese dictionary for this, just jot down on paper the basic mechanics of your startup; most of it, if common sense, will transfer to operative documents, if not hold up in court.

3)    Using Boilerplate Forms. When I started my law practice I opted for the $26/month Squarespace hosting service, as opposed to the pretty, custom built $20k website SEO’d for the masses. Budget matters, and I get that. However, in saving money through use of generic templates you may be doing yourself a great disservice. For instance, in Tennessee you can file your corporate charter electronically with mostly just identifiable information. Theoretically, with charter in hand you could just shop online for some bylaws and call it a day. However, the inexpensive forms for purchase are rarely State specific, and in the event they are it is almost inevitable that some nuance will be overlooked. As an example, in Tennessee you can deviate from the many of the default State statutory provisions that govern your electronic charter filing, but only if you know which alternatives to invoke and how to invoke them on the front end in your charter.

4)    Using a Clueless Attorney who uses Boilerplate Forms. Here’s a dirty little secret. Many lawyers today through paid subscription services can access compliance and contract forms authored by someone else and positioned outside of the lawyer’s areas of expertise. Unless you are severely pressed for time, you should always speak with a few attorneys before deciding upon which one to secure for representation in a given matter. If an attorney you are considering does not ask many questions during your consultation and/or doesn’t seem comfortably familiar with the subject matter of your call, then that attorney may try to wing your representation through some third party forms. When obtaining any sort of transactional document like bylaws or a service agreement, make sure that your attorney walks you through the entire agreement and competently explains each section.

5)    Failing to Conduct a Proper Analysis of Potential Intellectual Property. It’s easy to understand why entrepreneurs (and artists) fail to dive into intellectual property considerations early on in the development and launch process. The Manual of Patent Examining Procedure contains about 3,000 pages of mostly unreadable legal and technical jargon, and the federal copyright and trademark guides are only slightly less grotesque. However, there are user friendly guides out there written for entrepreneurs such as the Nolo Press intellectual property series, and Lerner and Poltorak’s Essentials of Intellectual Property: Law, Economics, and Strategy. If you don’t take necessary steps to protect your innovations early on, and you are in an intellectual property intensive technology field like the life sciences, then you may quickly encounter investors that flee when you cannot confidently address IP questions. In the tech industry, you could equally be undone before you’ve begun by failing to consider the stacked licenses and restrictions that make their way into promising code sets, particularly those built upon “open source” platforms that are not as SF circa ’67 as you might think.

6)    Failing to identify capturable, non-dilutive funding. Did you know that in FY17 there is about $2.5 billion set aside for startups by the federal government, in one program alone? Read more about the SBIR program on my blog. I’ve worked with SBIR recipients on everything from toothbrushing video games to hypnotherapy workshops. Investors tend to love grant programs such as SBIR because they provide flexible, sizable funding without the baggage of attaching equity interests.

7)    Failing to Lead with Emotional Intelligence and Integrity. Every entrepreneur will make mistakes, and every corporate collection of entrepreneurs will encounter unanticipated hindrances to growth. Star power can supernova, as in the case of Theranos. Make it a point early on to identify mentors at the individual level as well as investors at the corporate level, so that when TSHTF, you are prepared with a shtbrella to weather the storm and emerge unsullied for the better. The odds of your first launch being wildly successful are about as low as ACME suddenly suspending Wile E. Coyote’s roadrunner assassination account. If entrepreneurship is in your blood, you will likely find yourself involved with multiple startups over the course of your working life. Set standards for yourself and your company early on and commit to being a partner or investee that communicates directly and directly addresses shortcomings and failings; consequently, you will be rewarded if not with repeat engagements, at least a fair shot at them.