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THE ONLINE INVENTOR – July, 1999

(c) 1999 Market Launchers, Inc.

http://www.marketlaunchers.com

Publisher:  Paul Niemann

E-mail: [email protected]

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In this issue:

Article # 1: "Legislative Update," from Joanne Hayes-Rines, Editor of Inventors’ Digest.

Article # 2: "Hair Apparent: An Inventor Success Story" by Don Debelak of Entrepreneur Magazine.

Article # 3: "Synergy:" The Story of a Company called "Invent Resources," which showcases the way 4 inventors achieve synergy when they combine their various talents. After reading this story, you may want to think of who you could team up with in order to create some synergy in developing your inventions.

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Article # 1: "Legislative Update," from Joanne Hayes-Rines, Editor of Inventors’ Digest.

This proposed bill in Congress, if it becomes law, will be very damaging to all of us inventors, but together we can do something to reduce the chance of it being passed.

The following is a letter from Joanne Hayes-Rines, Editor of Inventors’ Digest. After reading the letter, which is of concern to you, me and every inventor in the U.S., please call, fax or e-mail your representative in Congress on Monday morning to urge him/her to vote AGAINST this bill. You can use any of the Talking Points that Joanne mentions in her letter to explain why your representative should vote against this bill.

It is important that your representative in Congress hear from you by Monday morning, because each call, fax or e-mail that you send represents the opinion of approximately 100 people, and they know it. (The reason for this is that 99 % of people never bother to voice their opinions.) The phone number for your representative can be found at: http://clerkweb.house.gov/106/mbrcmtee/members/teledir/members/CDFrame.htm

Here is the letter from Joanne Hayes-Rines:

Friends,

Last night we received a phone call from Rep. Manzullo (R-IL) alerting us to a new patent bill, HR 2654, that was introduced by Rep. Coble (R-NC) on Friday, July 30. Rep. Coble has asked the House leadership that this new bill be voted on Monday, August 2, under "suspension of the rules" which means the bill will be voted on without debate and would require a two-thirds affirmative vote.

What is HR 2654?

According to Rep. Manzullo, this new bill is identical to HR 1907 without the Title that would change the way the US Patent and Trademark Office is structured. There is no way you or I could look at HR 2654 because it will not be on the Internet so quickly.

Normally, only bills that are considered non-controversial are voted on under suspension of the rules.*

Introducing a new patent bill on Friday afternoon and requesting that it be voted on in less than one business day is an egregious abuse of power. Some form of patent legislation has been introduced in Congress for the last ten years and never passed because of the pressure exerted by the independent inventor and small business communities. One Congressional staffer I talked with was shocked that HR 2654 would be put on "suspension of the rules" and explained that the suspension motion is normally reserved for such bills as "naming bridges."

Rep. Manzullo is terribly concerned about this rush to vote and asks that inventors "light up the phones" on Monday morning. Time is of the essence. This is not the first time that the supporters of this patent legislation have attempted an end run away from the eyes of the public. Over the years it's been attached to a budget bill . . . it's been included in another good-sounding bill . . . it's been attached to an appropriations bill. Each time the power mongers have been stopped, and they must be stopped again. This proposed legislation has not been able to stand on its own because it is flawed -- terribly flawed.

I am disgusted at this manipulation of the system and implore you to call and fax and e-mail your Congressmen and the Speaker of the House, Dennis Hastert, over the weekend and on Monday as early as you can! Phone calls and faxes are the best way to be heard; you cannot be ignored. It is a very sad commentary that on August 2, the first working day of National Inventors' Month, the Congress of the U.S. will be asked to consider dramatic changes to U.S. patent laws under "suspension of the rules."

At the end of this message are the talking points I will use in my messages to Congress. Be sure to tell your Congressman that you are his or her constituent -- as a voter, you will be heard.

Joanne Hayes-Rines, Editor
Inventors’ Digest

H.R. 2654 Talking Points:

1) I am opposed to HR 2654 being put on the calendar under suspension of the rules which is normally reserved for noncontroversial issues. Changes to the U.S. patent system are extremely controversial and this "sneak attack" on the system is an egregious abuse of power.

2) How can such a vitally important piece of legislation radically changing 200 years of established patent laws and court decisions be presented to the House of Representatives less than 24 hours after introduction?

3) I have been told that HR 2654 is identical to HR 1907 without "Title VI: The Patent and Trademark Office Efficiency Act." I am unable to verify the contents of HR 2654 because it is unavailable to the American public because of such short time -- less than 24 hours -- between introduction and vote.

4) The Prior User Rights section of HR 2654 (called "First Inventor Defense") is totally unacceptable. This section elevates the rights the trade secret keeper of every "process or method" above the rights of the patent holder and dilutes the exclusive rights of the patent holder which are guaranteed in Article 1, Section 8 of the U.S. Constitution.

As defined in HR 1907/2654, "the term ‘process or method’ means ‘process’ as defined in section 100(b), and includes any invention that produces a useful end product or service which has been or could have been claimed in a patent in the form of a process." If this bill is passed, manufacturing processes, which are at the core of the vitality of the U.S. economy, will move from the public, open world of issued patents into the dark, covert world of trade secrets. Technological progress is advanced by the open disclosure of patented inventions, but it will be stifled and strangled because the Congress of the United States decided to encourage inventive people to keep their discoveries secret.

(NOTE: This point is very important because many Congressmen have been led to believe that this Title is limited ONLY to business processes and software patents which is absolutely not true!)

5) The changes made to HR 1907 have not made that bill or HR 2654 acceptable to America’s independent inventor community, and this rush to vote has cemented my loss of faith in the integrity of the sponsors of HR 1907 and its stepchild, HR 2654.


* Motion To Suspend the Rules (FROM THE THOMAS SITE: http://thomas.loc.gov/): On Monday and Tuesday of each week and during the last six days of a session, the Speaker may entertain a motion to suspend the rules of the House and pass a public bill or resolution. Members need to make arrangements in advance with the Speaker to be recognized to offer such a motion. The motion to suspend the rules and pass the bill is debatable for 40 minutes, one-half of the time in favor of the proposition and one-half in opposition. The motion may not be separately amended but may be amended in the form of a manager's amendment included in the motion when it is offered. Because the rules may be suspended and the bill passed only by affirmative vote of two-thirds of the Members voting, a quorum being present, this procedure is usually used only for expedited consideration of relatively non-controversial public measures.

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Article # 2: "Hair Apparent," by Don Debelak of Entrepreneur Magazine

Gary Kellmann, 29, got the entrepreneurial urge while in college, where he sold T-shirts, key chains and tomahawks that fans could wave when their university team, the Indians, played. Those ventures paid off, but Kellmann wanted to put his creativity to use inventing and selling his own products. After a disappointing first invention -- a radio-controlled alarm clock that cost him "tons of money" -- the St. Charles, Missouri, inventor finally found success when he focused on just two markets: hair-care and body-wear products.

Kellmann came up with his second invention in 1994 while trying to help his girlfriend organize her barrettes, hair clips and assorted accessories. Just out of college at the time, Kellmann was broke, so for her birthday, he built an organizer for her hair accessories instead of buying one. The product had a big loop with an easy-open latch to hold big items; a smaller loop, also with a latch, hung inside the big loop and held smaller hair accessories. Kellmann's girlfriend loved the product, and so did everyone else who saw it.

One thing Kellmann says he learned from his first invention: "You're not going to make money if you expect someone else to do all the work," he says. "You've got to put in time and effort if you expect to succeed." So he volunteered at a local Small Business Development Center where he could network with people who knew a lot about product development. From that experience, Kellmann learned not only how to run a small business, but also the importance of understanding your target market and industry.

He started to read trade magazines and attend trade shows, and found a marketing company to sell his product. Using his credit card, he had 20,000 units of the product, dubbed the Hair Holder Holder, manufactured in China. He and the marketer were able to place the product in Claire's Boutiques, a national chain of fashion accessory stores that target teens. But the product flopped -- and that was when Kellmann learned what it really means to know your market.

"I started hanging around retail stores and watching the customers," he explains. He soon learned that teenagers didn't care about organizing their hair accessories, but their moms did. The product sold well when placed in large discount drugstores, where mothers could see it and buy it for their daughters.

Realizing that he didn't have the financial backing to effectively manufacture and sell his idea, Kellmann decided he needed a partner. He took to the aisles of his targeted drug and discount stores to find out which companies were selling to this market. Armed with this information, in 1996, Kellmann's company, Beyond Mars, signed a partnership agreement with Fit-All Sportswear in Pilot Mountain, North Carolina. He gets a 7 percent royalty in return for handling design and manufacturing, while Fit-All handles distribution, marketing and financing. Besides drugstores, the Hair Holder Holder is now sold in a variety of other discount stores.

Kellmann's success might mark the end of most inventors' stories. But he went one step further -- a step that has paid off even more. Kellmann stayed involved in the market, attending trade shows, talking to people in the industry and visiting stores. About a year ago, he noticed a new fashion category emerging: hair accessories for girls 6 to 13 years old. Catalogs and chain stores targeting this market started to succeed.

After discovering that the pre-teen girl market was exploding, Kellmann went back to the drawing board to come up with even more product concepts. His first product was a hair stick -- a product that looks like a piece of candy and holds hair up in a French bun or a twist. Kellmann contacted L&N Sales & Marketing, the Huntington Valley, Pennsylvania, company that sells the Sc´┐Żnci hair scrunchie. Not only did Kellmann sell the hair stick to L&N, but he also sold them two other products that will hit the market in June.

Besides his pre-teen products, he's also working on licensing a new jaw clip for teens' and women's hair, body wear (jewelry for different body parts) for teens, and soap-filled dinosaurs for small children. "My goal is to come up with one new product a month and license five new products every year," Kellmann says.

Despite his early success, Kellmann wasn't able to quit his full-time job until two years ago, when he turned 27. "Now I'm doing exactly what I've always wanted to do," says the inventor, who considers this his breakout year where he no longer has to worry about income.

Want to be in the same situation? Says Kellman: "Learn your industry, know the key people and watch for changing trends. Timing is key, but you also need dedication, discipline and desire." The most important lesson Kellmann learned is that when you follow industry trends closely, you don't need to be a creative genius. The new products the market is looking for will be fairly obvious. Your only job is to finalize the idea and deliver the product for the right price.

# # # #

www.EntrepreneurMag.com is the most comprehensive web site that meets all the needs of small business owners and entrepreneurs. From starting a business to managing one, www.EntrepreneurMag.com features strategies, tips and articles collected from four different small business magazines.

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Article # 3: "Synergy:" The Story of a Company called "Invent Resources."

Reprinted with permission from The Boston Herald, By Marie Gendron.

When the four principals of Invent Resources (IR) get together, sparks fly and sometimes tempers flare. But that's all part of a day's work for these four inventors-for-hire.

"When we act together as a group and go at each other's throats, we come up with concepts that are very solid," said A. Ze'ev Hed, one of the principals.

The four world-class scientists and engineers got together about 4 years ago when they discovered that, unlike many of their consultant colleagues, their solution to most problems was an invention of some kind.

The premise behind the company is simple: instead of inventing products and then finding uses for them, IR investigates problems that clients have and invents solutions.

The four inventors together have received more than 80 patents, have guided the development of over 200 products, have formed over 60 licensing arrangements and have more than 40 patent applications in process.

They said a typical client is Arm & Hammer, which wanted IR to find a way to get consumers to replace their baking soda every three months (which is when the product begins to lose its effectiveness). As an added challenge, the solution could not cost more than 2 cents a box.

IR came up with two dozen inventions/solutions, including a pop-up flag, an hourglass timer and an audible signal.

While a management change at Arm & Hammer ultimately shelved the project, IR is in discussions with several other companies about licensing some of its timer discoveries.

Another client is a toy company trying to create a four-color "Etch-a-Sketch"-like toy. The partners said they have come up with a half-dozen inventions that keep the colors from intermingling, all of which are within the client's budget.

IR does not charge clients for the process of inventing. If it does come up with a solution, clients can pay $2,000 for a two-month option on the invention. But IR retains ownership of all its patented ideas and products. Royalties from licenses on those products is where IR hopes to make its fortune.

Principal George Freedman said the company's goal is to line up 5 to 12 licenses a year. Another goal is to find a venture partner to market the company and line up clients so the four partners can do what they enjoy most: invent things.

"We think we're outstanding as inventors, but mediocre as marketeers," Freedman said.

The partners said the key to their success is their varied backgrounds, which include expertise in everything from plasma physics to heat transfer technology to refrigeration and cryogenics. They hold advanced degrees in physics, mathematics, material sciences and engineering and have had line management responsibility in major organizations, such as Raytheon Co.

"We're generalists," Freedman said.

The partners said the driving force behind each of their very different personalities is the love of a challenge.

"Our motto is 'We're too stupid to know it can't be done,' " said Hed. "If it doesn't violate the laws of physics, it's possible."

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Until next time, Successful Inventing To You!

Best Regards,

Paul Niemann
Market Launchers, Inc.

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Copyright (c) 1999
Market Launchers, Inc.
All Rights Reserved

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Click here to read the June 1999 issue.