Mark Publicover had a problem. In 1996, he invented a safety net enclosure for trampolines and marketed it through his company, JumpSport, having been made aware of the dangers of falloff accidents when his own children received a trampoline as a gift from their grandparents.
Subsequent to that, he learned how widespread the danger might be, given the fact that over half a million trampolines were then sold in the U.S. each year. His invention was, as a result, well-received, with particular interest being shown by Sam’s Club, a Wal-Mart subsidiary.
Then that interest waned, suddenly and inexplicably.
Turns out that another company, JumpKing, began marketing a similar safety enclosure, and Sam’s Club elected to cast its lot with that business instead. In addition, a company called Hedstrom — which had originally agreed to manufacture Publicover’s product — came out with netting of its own. So even as the annual sale of trampolines climbed to over one million a year (as was the case by 2004), his margins and promising growth prospects dissipated. As he put it in a 2008 CNN Money piece, he went from “elation to devastation.”
Initially lacking capital to launch legal proceedings, he finally went after Wal-Mart, Hedstrom and JumpKing in court in 2001, even as the product produced by the latter company was found to be unsafe, resulting in the recall of 296,000 of those enclosures. In 2006, JumpSport won an estimated $600,000 settlement, according to the CNN piece, though Publicover claimed that he lost some $50 million as a result of copycats over the years.
Nonetheless, things have worked out for Publicover, as his company remains viable to this day. But the lesson here is that an entrepreneur can never be too careful when it comes to patent protections — that it is best to dot every “i” and cross every “t.” Andy Gibbs, former head of PatentCafe.com, told CNN that those in charge of fledgling companies would do well to surround themselves with advisors well-versed in patent laws. His belief was that those in such positions would do well to spend at least $100,000 on legal support, some $70,000 more than Publicover invested. As Gibbs put it:
“If you create something of value, then it represents a market that will be economically beneficial to huge corporations. And they will go after it.”
We have notably seen this play out in the recent legal battles between tech giants Samsung and Apple, and it flies in the face of the long-ago thinking of computing pioneer Howard Aiken (1900-73), who was quoted as saying:
“Don’t worry about people stealing an idea. If it’s original, you will have to ram it down their throats.”
That mindset has persisted over the years. In a 2009 blog post, investor/entrepreneur Chris Dixon argues that there is minimal risk of an idea being stolen, either because others see little merit in it, believe it is merely the extension of an existing idea or because they are too busy fleshing out their own ideas to care. For that reason Dixon advises entrepreneurs to freely discuss their burgeoning ideas with others, as that gives them an opportunity to gauge its merits, while also getting advice about possible refinements. Moreover, such interactions allow for an opportunity to learn about the field of endeavor in question, and whether similar products are in development.
That is not to say, however, that copycatting doesn’t occur. Witness the clothing industry, in which it was legal for designs to be pirated by lesser boutiques (and thus sold at a far lower price) until Congress passed the Innovative Design Protection and Piracy Prevention Act in 2012. And witness that protracted courtroom fight between Samsung and Apple, which began in 2011, stretched into 2018 and centered on whether Samsung copied Apple, when smartphones were in their infancy.
The two sides eventually reached a settlement, but not before a jury awarded Apple over $1 billion (in 2012), an amount later reduced to $539 million via appeal. The Verge could only wonder at why the case finally petered out in 2018, speculating that after years of carrying on a fight over a relative financial pittance (considering the earning power of the companies involved), new management teams were simply ready to put the matter aside and move on.
It should be noted that it was not the first time the two giants did battle. In 2014, Apple won a $120 million settlement from Samsung for violating one of its patents. It should also be noted that such things go back a long way. Consider these examples of piracy as compiled by Businesscareersguide.com, which, besides illuminating the larger point, offers an altered view of history:
- Guglielmo Marconi is credited with inventing the radio in 1904, but he borrowed heavily from the work of Nikola Tesla.
- Columbia grad student Gordon Gould failed to secure patents in a timely fashion for his invention, the laser, in 1957, and was as a result forced to fight a long legal battle against some of his colleagues in order to get his just due.
- John Fitch, inventor of the steamboat, was not granted a monopoly when he was given his patent in 1791, paving the way for Robert Fulton to copy the idea, and secure his place in history.
- Alexander Graham Bell and Elisha Gray applied for patents to the telephone on the very same day in 1876. Bell’s name lives on. Gray’s does not.
- Some eight years after visiting the laboratory of Philo Taylor Farnsworth in 1930, RCA scientist Vladimir Zworykin applied for a patent for the television that was vastly different from his original design, which dated back to 1923. A legal battle ensued, and a judge ruled against RCA. Ditto for the appeal.
- Xerox sued Apple in 1990, claiming that Steve Jobs and Co. stole the idea for the graphical user interface, a building block for the personal computer. The case was thrown out.
The point here is that while piracy might be rare, it has happened, does happen and will happen. The entrepreneur or inventor must go in with eyes wide open, and must do his or her due diligence to protect their ideas.