By Marilyn Odendahl, Truth Staff
ELKHART -- Tom Irons, co-founder and chief executive officer of Audio Specialized Applications LLC, is losing his faith in the ability of patents to help his business.
Not only do the applications take an inordinate amount of time to be processed -- meaning the high-tech products ASA patents probably will be old news by the time they receive the protection -- but also, once the patent is granted it is a negotiating tool at best and not a shield against all infringements.
"We have some patents. We don't file patents in every particular case we could," Irons said. "If I thought they made an important difference in the fast-moving business we're in, I'd file a lot of them."
Initially established in 1790 with the Patent Act created by Thomas Jefferson, a patent granted today, according to the U.S. Patent and Trademark Office, "excludes others from making, using or selling the invention in the United States."
Among the entrepreneurs and garage inventors in Elkhart County, patents have been a source of pride.
For at least the last 30 years, Elkhart County has received more patents than any other county in the Hoosier state with the exception of Marion County, home to Indianapolis.
The patents counter the image that local businesses are not very technologically advanced, said Eric Kanagy, past president of the Elkhart Area Technology Council and founder of Enovent.
Elkhart County is innovative and even though what companies are making may seem low-tech, Kanagy continued, they are producing the products in a high-tech way that will keep those businesses competitive in the world market.
In the past decade, however, the number of patents given to Elkhart County businesses has dropped nearly 3 percent. Although the county retains its number-two ranking, is the county losing its innovative edge? Or do more business owners see patents the same way as Irons, more trouble than they are worth?
The slip in patent applications may be more of a sign of how far the county was ahead rather than a foreshadowing of dwindling inventiveness, said Tom Mauch, patent attorney with Baker & Daniels and member of the technology council.
Data from 1976 to 1995 shows an amazing 752 patents being granted to Miles Laboratories, the former pharmaceutical giant in Elkhart. Without the Miles boost, other companies were able to get enough patents from 1996 to 2006 to retain the county's position atop the state's patent rankings.
Obtaining a patent can help a new, young company plant its foot in the marketplace by securing its product from being copied by rival businesses, said Mauch.
Similar to insurance, a company will pay for the patent protection and may never use it. But without it, the company will have little recourse if a competitor begins making the same item, Mauch said, noting he gets a lot of phone calls from Elkhart County companies looking for help when they see their product being made by another. Without a patent, that activity can be difficult to stop.
One time, a smaller company slapped ASA with a patent infringement complaint. Irons called it a "rookie move" because the upstart business had not sold any product before filing the suit -- thus the new company could not show the judge specifically how it had suffered damage.
The case was dismissed.
"You never want to get into a patent fight because they're going to wear you out," Irons said, explaining the bigger company will most likely win any court battle because it has more financial assets to pay the lawyers and file the motions.
Consequently, a patent is a negotiating tool, not absolute protection, in any infringement fight, Irons said.
During the 1980s, ASA received several patents but, Irons said, by the time Y2K rolled around, the company was not seeing a return on the effort the staff was expending to file the applications. At upwards of $15,000 per application, the worth of a patent should be measured by the revenues or royalty fees it generates.
Patents are all about protecting products that generate revenue and not something to brag about at cocktail parties or to "gussy up" a résumé, Irons said.
And at the pace at which electronic equipment now changes, the radio and video products ASA designs and manufactures were outdated by the time the two-year application process was completed and the patent was granted.
"I'm not saying I'm right or wrong," Irons said. "It's just a call I made."
In an effort to speed the process, the U.S. Patent and Trademark Office launched a pilot program to chop more than a year off the process and grant or deny a patent within six months. The tradeoff is that companies submitting applications will have to do more to prove its product is unique by doing their own research and review of other pertinent patents.
The pilot program "forces people to sit down and think about what's patentable and what isn't," Mauch said. "I don't know if that's a bad thing to have people sit down and think."
Although the applications coming off Irons' desk has dropped, in a world of iPods, DVDs and other electronic gadgets, the CEO still reads through the sleep-inducing patents to get a feel for what is happening in his industry.
"It's probably one of my least favorite things to do," Irons said, "but certainly I've done a lot of that."