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Managing IP in a world that that favors the big fish

traveler_hauptmantraveler_hauptman Member, OS Professional, Mentor, Developers Posts: 419 PRO
edited May 2015 in General
I've seen some comments in various threads here about IP and I thought it would be interesting to focus the discussion a bit.

What IP management features should Onshape have? How do you manage your IP and is it effective or just posturing?

Many, if not most, of us will be using Onshape to generate IP that has value to someone, and Onshape is doing their part to insure that the information is secure. And yet just as information security is more than lock and password (social engineering), IP management is more than NDA's.

I'm expecting that because of it's newness (and price point) more small businesses will be adopting onshape than big corporations, at least for the near term. Add in the hobbyists, enthusiasts, and micro businesses using the free accounts and you end up with fact that Onshapers are mostly small fish in the IP game.

I myself do mostly work for hire, which means that IP I generate belongs to my clients (and I protect that IP carefully). I am also an entrepreneur and an avid study of business history in my field, advanced robotics. Both these things have shaped my opinion on IP.

Here's my observations on IP:
It's really rare that an inventor makes money off his invention. It happens, just like rock stars and sports stars happen. It's rare.
It's really rare that any given technology or IP is what makes a business successful. There's a reason that top managers and sales people are paid a lot more than engineers. 
In patent cases taken to court, the big company wins by strategies which cause the time to process the case (and therefore legal fees) to be too much for the smaller company. Whether there was infringement rarely decides the case.

So from my perspective it's much more effective move fast and to create new IP as needed to serve your market and customers rather than try to protect it. IP that you want to protect is better protected by trade-secret than patent if you are small. If you find yourself carefully guarding a single piece of IP, you are probably doing things wrong.

A click through NDA was proposed in another thread. To me this is a risky approach if you truly want to protect your IP. It presumes two things: 1) You have the funds available to successfully take the offender to court in a jurisdiction that accomplishes what you want (remember that Onshape users are global). 2) You have the ability to recover if the IP offender shares it with competitors.

One might as well walk through the back alleys of New York wearing a T-shirt that says "It's illegal to mug me."

So what is the best way to manage IP? Is there here who has successfully prosecuted and recovered from an IP leak?


Comments

  • traveler_hauptmantraveler_hauptman Member, OS Professional, Mentor, Developers Posts: 419 PRO
    No response? Too depressing?
  • 3dcad3dcad Member, OS Professional, Mentor Posts: 2,388 PRO
    I've had this thread open for few days and you made me think what is my (or my company) IP. We are producing flat pack furniture with high quality at economical price. I think being able to do that in Finland is our IP.

    But if I narrow it down to design part where Onshape would be used. Does it make harm to us if our competitor would have access to our model? Probably not, because they can go to our retailers webstore and spend $50-500 to have one piece to inspect. Having patent or other legal protection for furniture design is like that T-shirt example @Traveler_Hauptman mentioned.

    But if I use Onshape in a way that document contains all the cost calculations, machining infomation, subcontractor information & buy-in prices, etc. then it would open up the whole business. But still, I'm not sure if it would benefit me in anyway if I received all this information from some of our competitors system.

    If Onshape succeeds and we all use it, then I see an interesting situation where some big retailer receives an offer from manufacturer with shared 3d models of new design then they share this model with every manufacturer they know and ask for competing offer for the same model.
    And when we get cost calculation built into Onshape then it's only matter of parameters who has the best price B)
    Down side is that the one who spent the time for desing and loses the deal for someone else, probably won't do it again.
    But of course the buyer would be a fool if they don't proceed with the company who CAN come up with something new.

    This said the important thing for me is that you have very clear view of what is shared to who and what they can do with the shared document.

    The truth is, I don't know how to protect IP - but I think the best way is to move forward all the time so that if someone picks something you dropped on the way; it is already old information.

    //rami
  • billy2billy2 Member, OS Professional, Mentor, Developers Posts: 1,300 PRO
    edited May 2015
    Jeus......

    A good friend told me to copyright your name, which is easy. Build the best product for the least amount of money and sell like mad. He told me the legal IP stuff doesn't really work for the small guy and you have about 2 years before the others catch up.

    He was successful.

    So, here's what you do. Design & produce a widget and sell $1,000,000/month. Then after 2 years you'll have $24,000,000 in the bank. Did you get that?




  • clayton_ertleyclayton_ertley Member Posts: 58 ✭✭
    Not at all do I find this to be depressing. I myself have fallen victim to IP theft from manufacturers in china. I designed a puzzle and sold ONLY hand made copies. It may not sound like much but it paid all of my bills and left me with a nice profit.

    I sold my puzzles globally. I was the first person the ever post the demo of the puzzle publicly (which was how I thought copyright worked). I was also a member of an semi exclusive forum based completely around puzzles. Eventually after about two months or so Chinese manufacturers took my design and made millions (china does not legally have to obey patents, IP's, or copyrights). They even know how far they can go. One of my many designs that were "stolen" was posted for sale on Alibaba.com even credited me as the designer.

    From my experience, I understand the need to protect your information.
  • pete_yodispete_yodis OS Professional, Mentor Posts: 666 ✭✭✭
    billy said:
    Jeus......

    A good friend told me to copyright your name, which is easy. Build the best product for the least amount of money and sell like mad. He told me the legal IP stuff doesn't really work for the small guy and you have about 2 years before the others catch up.

    He was successful.

    So, here's what you do. Design & produce a widget and sell $1,000,000/month. Then after 2 years you'll have $24,000,000 in the bank. Did you get that?




    @billy I would agree with that.  I think often times for the small guy the IP realm ends up being a quagmire - but I could be wrong.  The small guy needs to stay nimble and out in front.  That is their advantage.  The big guys can drag you down into the IP realm and drown you in battles you don't want to be in.  I wouldn't want to tread on the big boys IP - so you need some knowledge there.  Maybe the better approach would be to create for them or partner with them.  Let them protect their fold while you keep doing what you do best - iterate faster than those too worried about IP protection.  I'm not saying IP protection is foolish or not valuable - it just seems out of the realm of smaller players.  Maybe better to create something new and get inertia around the name.  That seems easier to do today with the internet, platforms like kick-starter et all, social media for marketing, amazon for order fulfillment and inventory/logistics...
  • 3dcad3dcad Member, OS Professional, Mentor Posts: 2,388 PRO
    Not at all do I find this to be depressing. I myself have fallen victim to IP theft from manufacturers in china. I designed a puzzle and sold ONLY hand made copies. It may not sound like much but it paid all of my bills and left me with a nice profit.

    I sold my puzzles globally. I was the first person the ever post the demo of the puzzle publicly (which was how I thought copyright worked). I was also a member of an semi exclusive forum based completely around puzzles. Eventually after about two months or so Chinese manufacturers took my design and made millions (china does not legally have to obey patents, IP's, or copyrights). They even know how far they can go. One of my many designs that were "stolen" was posted for sale on Alibaba.com even credited me as the designer.

    From my experience, I understand the need to protect your information.
    Damn. Do you think of any way how could you protect your IP from chinese (and still sell globally)?
    //rami
  • clayton_ertleyclayton_ertley Member Posts: 58 ✭✭
    billy said:
    Jeus......

    A good friend told me to copyright your name, which is easy. Build the best product for the least amount of money and sell like mad. He told me the legal IP stuff doesn't really work for the small guy and you have about 2 years before the others catch up.

    He was successful.

    So, here's what you do. Design & produce a widget and sell $1,000,000/month. Then after 2 years you'll have $24,000,000 in the bank. Did you get that?

    -------------------------------------------------------------

    As was said in my first comment it only took about 2-3 months for the design to be replicated and stolen. Therefore I do not think this advice is for everyone. I could be wrong but drawing from my experience and other that I know personally who had larger businesses than I(~$500,000 near close of their first year), I think its safe to say people should investigate ways to protect their IP, especially if they intend to be in business for the long haul.


  • pete_yodispete_yodis OS Professional, Mentor Posts: 666 ✭✭✭
    Thanks for sharing @clayton_ertley ;.  Do you have any ideas on how you would protect your IP better this side of your experience?  It seems hard to protect against the Chinese manufacturers as you mentioned.  I guess you could prevent that potential product from being sold in the US if you have proper protections?
  • clayton_ertleyclayton_ertley Member Posts: 58 ✭✭
    edited May 2015
    Remember if you sell internationally or just domestically you may still fall victim to the Chinese. Because there is no law preventing them from replicating your product, they can also sell your product in the U.S and other countries. At the moment I know of no way to prevent this from happening.

    The only thing that may work is if you sell low cost products ($5-50 ish range..maybe even higher) in a public marketplace like ebay and such. Reasons being that most people do not want the risk not getting a package due to customs or lack of cooperation from seller. That and most people do not want to pay the higher shipping costs. Also some people associate Chinese manufacturing with cheap, crappy products. Though I know this does not constitute "protection", it does serve as an effective strategy for lower cost merchandise.

    I know this from current and on going experience as I buy wholesale products from china and sell on ebay. My suppliers also sell on ebay for far cheaper than I but I make many more sales than they do. I have practically turned the problem into kind of a business partnership...I need them and they need me.
  • clayton_ertleyclayton_ertley Member Posts: 58 ✭✭
    edited May 2015
    I forgot to add something in my first post about the theft of the puzzle. The manufacturer got an account on the forum in which I was a member(images attached to posts are private) and used it to feel out for the most wanted and mass producible items he could find. HE EVEN ADVERTISED IT ON THE FORUM! THEY WILL HUNT LIKE HELL FOR IT!!!

    Also he was one among about five on the forum.
  • clayton_ertleyclayton_ertley Member Posts: 58 ✭✭
    I also want to add another strategy I am familiar with. But it has it's risk.

    Lets say you have a design simple...moderately complicated...and able to be sold in the price range I mentioned before.
    Well depending on you goal for the item it may actually be appropriate for you to have them manufacture your design. I know...but hear me out.

    If you want to get your design manufactured, you would need to ask them to manufacture it for you but under the condition of giving the best price even if by a small range(remember they will likely sell it them selves in bulk if they see that the product is successful).

    The disadvantage is that other seller anywhere in the world will be able to buy it in bulk and sell it. However they will not likely be able to beat you price point because of your lowered. You also run the risk of the manufacturer not keeping their word and giving other lower prices or raising your(this is not that common actually).

    This strategy is mostly appropriate for small items that will not likely be a huge, long haul kind of hit...much like my puzzles it is just a big boom of sales the slowly decrease until dwindling into nothingness...clearly a perfect plan for the puzzle(if you know what your doing with puzzle designs, your looking at a day of design work and they take care of the rest).

    I know it SEEMS like a lot of risk but you must remember that you cannot protect simple designs from them so easily... use that.
    It's not perfect, but there are options.


    I hope this will help someone with their worried.
  • pete_yodispete_yodis OS Professional, Mentor Posts: 666 ✭✭✭
    edited May 2015
    I tend to wonder about IOT devices having some protection built in because you can offer a data service in combination to the physical devices you might sell.  The total value to customers would be your device using your cloud based service as a combination.  Possibly harder to copy that.
  • clayton_ertleyclayton_ertley Member Posts: 58 ✭✭
    edited May 2015
    By OIT you mean Internet of Things? If so that is a great point! It would be a lot harder to copy especially with the whole private Chinese internet( or do i misunderstand how that works?) However, it does only serve one niche of products and in respect to OnShapes current capabilities, were are looking at mostly mechanical inventions.

    With electronics in general you can still have a leg up by making a great quality product and as you mentioned a great customer service and feedback system in place. Even when the Chinese manufacturers manage to rip off an electronic device, it is usually of a lesser quality. You would lose sales to cheapo people, but they would eventually come your way after the hassle of a less than functional device. For example, I bought a rip off hand held wireless keyboard/mouse combo (I didn't know it was rip off at the time) and it works fairly well. Some buttons don't do what they are supposed to so I fully intent to buy a better "brand" version. Customer gained.

    I think with some brainstorming we could come up with some more workarounds for the moment. I don't see any group of any size enforcing China to cooperate. Doesn't china have the right to eminent domain? It just seems like that would be something to hold over our heads. Off topic though.

    Any ideas anyone? This is a very.very interesting topic of discussion to me.
  • traveler_hauptmantraveler_hauptman Member, OS Professional, Mentor, Developers Posts: 419 PRO
    I am at a conference that is taking my attention 24/7 for the next week. enjoying the discussion in the mean time.
  • michael3424michael3424 Member Posts: 479 ✭✭✭
    Anything electronic that might need a firmware update is susceptible to "bricking" if the update determines that it is being applied to a counterfeit device.  I think there was a case of that recently when a USB chipset manufacturer bricked USB comms on PCs that used the counterfeit chipset.

  • pete_yodispete_yodis OS Professional, Mentor Posts: 666 ✭✭✭
    edited May 2015
    @clayton_ertley ; Yes I was referring to Internet Of Things (IOT).  I think Onshape and complementary products from its technology partners (Upverter and others) will be favorites from people that will build out the IOT devices.  I suspect the pace on this market to be blistering and larger/slower companies that are not there yet won't be able to react quick enough to the market.  I suspect the IOT market will need capable engineers rapidly making/designing on flexible low barrier to entry platforms.  I think the maker community is merging with professional engineers (maybe the makers are really frustrated engineers working at stale companies ).  Onshape is well suited to this market... and they know it.  Great timing on their part.
  • clayton_ertleyclayton_ertley Member Posts: 58 ✭✭
    @pete_yodis : Agreed on the time issue. But only time will tell. As far as I understand, OnShapes Cloud CAD is a first and brings designers together in a new way (I think Autodesk is trying something like this only without the live sharing sessions) that allows multiple users to update a single file rather than logging updates for recipients to have to observe and understand. I think this could be great for work flow. This is what makes OnShapes business model a great catch(in my opinion) and therefore a natural target of big companies. I hope they pull through like kings because I love what they are doing.

    @traveler_hauptman : It is too bad your so busy as I would like to hear your thoughts on where this discussion is going.

    Do you find any of this to be helpful? Are you in a situation that you could explain in general to which we could advise you on?

    Thank you for posting this topic, it hits a mark I have always thought was very important. Hope to hear from you in a week or so.
    Cheers!
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