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Lone inventor with a shoestring
FRESHORIZE, ENGLAND, is a one-man show run by Aziz Patel in East London. His product and company have won several awards, but promotion has proved challenging and IP protection has been costlier than expected. At least filing patents more broadly has provided him some security.
Aziz Patel, Freshorize: "Costs for protecting and exploiting IP can spiral out of control for a small business!"
Knowing how much money to devote to intellectual property is challenging for any start-up, but doubly so for a lone inventor with limited funds. Aziz Patel has worked for years without a salary, or full-time help, trying to break into the vast toiletries consumer market with his bottled soap dispenser/air freshener product. Expenses on every front are high, but those spent protecting and exploiting IP in multiple markets can be crushing.“These costs can spiral out of control for a small business,” says Mr Aziz.
Certainly, the potential for Freshorize’s product would seem unlimited. It is an affordable item that combines in one convenient pump two products many people buy separately, soap and an air freshener. Yet selling the concept to companies has proved challenging. The market for such an item is new and unexplored. Advertising is not cheap, nor are legal fees spent protecting and exploiting IP. Mr Aziz has little capital. His experience offers a unique view of the challenges a lone inventor faces as he attempts to create demand for a new product.
The story begins with a classic inventor moment. Mr Aziz was sitting on a plane when he smelled an unpleasant odour coming from the lavatory. The London barrister, who at the time ran a toiletries business with his father in Zambia, thought: what if a soap dispenser also included an air freshener? Back in London, he built a prototype and patented the idea.
At first, Mr Aziz had hoped to license the technology. He talked to more than a dozen companies including the biggest in the toiletries industry such as Unilever and Procter & Gamble – but with little success. He tried small companies too, but those he approached said the marketing to introduce a new product was more than they could afford. Next, Mr Aziz turned to direct sales, calling up large supermarket chains such as Asda and J. Sainsbury. Some managers feared that, because Mr Aziz ran a one-man show, he would not be able to meet their demand. A buyer at Tesco gambled that he could. Today Freshorize targets specialists stores a step towards the lucrative premium brand sector, having served Tesco for 3 years mass marketing its product at £1.99.
Being brash with mixed results
Building consumer awareness is expensive though and so Mr Aziz has turned to public relations rather than more costly advertising. He cold-called women’s magazines repeatedly and sent them the product until a few finally agreed to write stories.“ It borders on being brash,” he says. “They’ve turned you down, but you call them again and again. I wouldn’t take no for an answer.”
More recently he has approached business customers such as airlines, cruise ships, hospitals and office complexes, hoping this market might one day support the more costly consumer side of his business. So far, his efforts have met with mixed results. In one case, a prospective airline said Freshorize should supply the product for free in return for the exposure it would get on its planes. He declined the offer. Five other airlines, however, signed contracts for more than 20,000 units in total. Mr Aziz is expecting other airlines to come on board within the next months.
After more than six years, the company remains small. Mr Aziz manages it mostly alone. He has a part-time assistant who helps him with sales and marketing. Family and friends pitch in when they can. Mr Aziz’s sister, an accountant, handles the books, for example. A friend designed the dispenser for some cash, but also for the promise of future employment. Eight suppliers in Europe produce and assemble the product. Sales are minimal and there are no profits. Freshorize has won some awards, including a commendation for best new company and a design innovation award.
In October 2000, Mr Aziz spent £200 to patent his idea in Britain. To keep costs low, he drafted and filed his own patent application.“ In hindsight, that was an error,” he says.“ Even though I’m a lawyer, I’m not a patent lawyer.” A UK patent examiner responded with good news and bad. Mr Aziz’s idea had great potential, he said, but his claim was too narrow. Get yourself a patent attorney, the examiner advised.
Patents still pending
This is where IP costs can start to add up. After interviewing four UK patent attorneys, Mr Aziz settled on one, paying him roughly £300 an hour. The first patent application was filed in Britain and granted in September 2002. Soon after filing in Britain, applications were filed in Europe, the US, Canada, Australia and Japan. Freshorize has also protected its design and trademarked the company name and logo. Although Mr Aziz asked his attorney how much these patent filings would cost, he failed to get a clear picture. For example, he did not fully take into account how much he would spend on legal fees answering the different requests made by each country’s patent examiners. Nor did he consider the cost of renewing applications and paying local lawyers in various markets.
The process has taken longer and been costlier than he expected. Patents are still pending in every market except Britain.“ I thought I would pay an application fee and after a period of time, it would be done,” says Mr Aziz.“ It’s not that simple. There are various stages and each of these stages costs money. Had I known, I may have restricted myself to Europe.”
Money remains a major concern for Mr Aziz. He started out funding the business himself, using savings and mortgaging his home. After three years, he turned to venture capitalists for financing. He says that because he was not a technology play, few showed interest. One that did, kept requesting revised businessplans until six months later, Mr Aziz ran out of patience. He turned instead to the Small Firm Loan Guarantee program in Britain and ultimately raised £60,000. Next he approached a fellow barrister and friend for help, who
invested £30,000 in return for some equity.
To keep costs under control, Mr Aziz does some IP chores himself. For example, instead of paying his lawyer £600 to do a basic patent search, he did the first one himself. In true lawyerly fashion, though, he started at the British Library with a stack of original patent filings until he discovered there were databases that made the task easier “The EPO’s search engine is excellent,“ he says.“ Anyone with a reasonable intellect can do the search themselves.”
Every few months he does another search by company name and key words to look for infringement. Mr Aziz recently found that British companies had started to copy his airline product by manufacturing it in China."They made exact replicas of our design. Being a small company with limited financial resources we were unable to afford a law suit," says Mr Aziz. However, he did manage to stop them copying the exact design. This was simple enough to do since he had the design rights.What he found more difficult at this point was to stop them completely. His patent rights on the invention is pending and so these companies have taken advantage to carry on copying his invention. "We will catch up with them once our patent is granted," says Mr Aziz.
Nevertheless, having filed more broadly makes Mr Aziz feel more secure presenting his prototype to prospective large customers and then leaving it behind when he walks out of their office. Knowing it is patented at least, he says,“provides some psychological comfort.”
Need clear picture of future costs
Mr Aziz says that entrepreneurs should demand that lawyers give them a clearer picture of future costs at every stage of the patent filing. They should also know the level of IP protection they need at each step of their business and be able to justify investments in IP based on business goals.
Product facts
Freshorize is a unique and innovative invention designed for bathrooms: in asingle award-winning patented bottle the Freshorize dispenses soap, activates an aerosol with aromatherapy fragrances, and (3 in 1 model) has an integrated gel pad that continually delivers odor-neutralizing scents. Product development and diversification includes designs for several horizontal markets: transportation (aircrafts, trains, etc.), commercial (office and portable bathrooms), and retail (end users), as well as different scents and styles.
Company profile
Freshorize is run solely by the product inventor in London. Eight suppliers in Europe produce and assemble the patented soap dispenser and air freshener product, and it is commercially available in Tesco UK stores.
Staff: 1
Sales 2004: Nominal
Key product: A single unit soap dispenser and air-freshener.
Customers: Tesco plus specialists stores. Five contracts with airlines, including First Choice Airways.
Freshorize Ltd.
Royal Docks Business Centre
University of East London
4-6 University Way
London, E16 2RD
UK
www.freshorize.com
IP background
Patent protection: One patent.
Patent filing order: UK first, and then Europe, the US, Canada, Australia and Japan.
Department: Founder manages IP himself with the help of an external patent attorney.
Budget: £20,000 to date.
Success factors: First to market and persistence.
Challenges: Total costs and the required own time related to IP issues.
Recommendations: Entrepreneurs should understand the costs associated with each stage of patent filings.
Contact
European Patent Office
Erhardtstr. 27, 80469 Munich, Germany
Tel.: +49 89 2399 4636
e-mail: sme@epo.org
www.epo.org
The UK Intellectual Property Office
Awareness, Information and Marketing Team
Concept House , Cardiff Road, Newport,
South Wales NP10 8QQ, United Kingdom
Tel.: +44 1633 814768
e-mail: marketing@patent.gov.uk
http://www.ipo.gov.uk/