Patent Approved

The following is a guest post by Julia M. Stroud, Ph.D.

“There are no patent police,” Mark Schneider informed me with a rueful smile. “Patents are only as strong as the patent holder is willing and able to defend them.” Mark and I were sitting with friends around his pool in Costa Rica. I had recently moved there, segueing from my private practice in the states as a clinical psychologist to a consulting psychologist/editor for writers via www.ShrinkWrite.com.

Mark’s wife wanted me to ghostwrite Mark’s story about his experiences as an inventor and all his trials and tribulations he went through. He chose not back then, but rather focused on the positive’s he was now enjoying in his life. When he told me his first successful consumer product had been the Cool-Dana in 1989, a cooling bandana worn around the neck, I was hooked! My horseback riding buddies and I had been using Cool-Danas for years and thought it was the coolest (hah!) product ever. An energetic, intelligent, super positive guy, Mark went on to list some of the other products he has designed that have sold for millions of dollars, helped build successful businesses and attracted the interest of Fortune 500 companies.

So, my fairly obvious query was, “Well, if you loved it so much and were so successful, why in the world would you quit?”

He thought for quite awhile before answering, his smile fading, enthusiasm gone. “I checked out of inventing. I felt the piranhas in the business had taken away my desire to invent and market my products. If you’re passionately absorbed with your invention, it feels like you’ve lost your child. You nurture a product from its inception; do what any parent does to make it the best product, and take a lot of risk. You put in all the hard work, creative ideas and money. It’s a really, really painful thing for me when my inventions are attacked by others, because my products are not just abstract objects to me.” Why now I asked, do you wish to tell your story? Mark stated, “Quite frankly, the internet is a lightning rod for chatter and I got real tired of people telling me they googled me and this Greiner / QVC story does not go away ( one side). I owe my family, friends and myself the opportunity to tell the facts and truth not just from my perspective but from what the legal documents also show. I should have spoken up long ago, but I had many other things in my life as a priority. I am not looking for pity or anything else, I have moved on, but maybe my story can help others. Truth is, I hold no hard feelings towards Lori, it serves no purpose, life is so short for all of us, we move on”. He chuckles, “ in this day and age, somebody will probably try and sue me for defending my name here, what a world!, ahh truth, don’t touch it!”

Ah, therein lies the story, which Mark has been reluctant to tell for the last ten years. He’s experienced the highs of successful collaboration with honest and talented co-inventors and entrepreneurs, and the devastating lows inherent in a product creation business that often rewards copycat artists and puts the onus on inventors to fritter away profits through litigation in an attempt to protect their handiwork and earn what is rightfully theirs.

At this point in time, the terrible taste of the bad still lingers enough that it’s kept one of the more imaginative product creators out of the business of inventing for a decade. I am trying to convince him that, although painful to relive, his experiences will serve as both a cautionary tale and an inspiration for others coming up in the field. After all, Mark personifies the American dream, and it’s an inspiring, exciting story. What follows is but a small sample of Schneider’s story as told to me.

At the age of sixteen, Mark convinced his parents to help finance his initial ideas, reinvesting any profits back into the businesses to expand or initiate new ventures. He began developing and marketing his own products in 1989 and began selling them to consumers in 1991. For his creative ideas, he was featured in magazines including Success, Entrepreneur and Inc. His first successful consumer product was the Cool-Dana, the cooling bandana that I mentioned loving above, although I’m mortified to realize, now, that I may have unwittingly purchased a knock-off. after hearing Mark’s saga, I’ve resolved to check this issue out on all my future purchases—I had no idea of all the sharks swimming in the sea of inventions. But, I digress. Back to Mark’s story.

One of Mark’s early products was the Soap Saver, a container that converted a bar of soap into liquid soap. He sold hundreds of thousands of them. In addition to creating his own products, Schneider grew to invest in other inventors’ products that he’d license from them, or he would represent their products in the marketplace.

As Mark told me of these exciting collaborative times, I could see the enthusiasm light up his face and wondered to myself how he could give up such an integral part of himself, his life.

He partnered with famed marketer Joe Sugarman to expand a couple of Sugarman’s creations, including BluBlocker Sunglasses. Schneider used the BluBlocker concept to create a car visor that was also wildly successful. All told, Schneider was involved in approximately 300 products that were marketed on home shopping networks, in mail-order catalogues and in retail stores around the world. Most of the products were others’ inventions, or under-marketed products that he’d mobilize by sourcing out production and locating markets. He was, by 2003, a prominent player in the world of home shopping networks, selling products globally. Exciting times.

But, the sharks were circling, and he grew increasingly disdainful of the people and companies who let him down, experienced a couple of especially painful betrayals, and moved his family to Costa Rica for a better quality of life.

One shopping network deal that turned real sour involved QVC and an anti-tarnish jewelry box, Prezerve, that Mark had invented and developed in a joint venture partnership with Calgon Carbon Corp., which had purchased the United Kingdom company that made the anti-tarnish fabric Flex Zorb that was being used for display cases in museums. The fabric absorbed harmful contaminants in the air and prevented silver artifacts from tarnishing. Initially, Calgon brought in Schneider as a consultant.

“They had it but they didn’t know what to do with it,” Schneider said. “I told them, ‘I don’t want to be a consultant. I’ll skip my $50,000 fee, invest 50/50 and be your partner with all the ideas I have for it.’ If they didn’t want it, I’d do it on my own.”

Calgon filed the patents for Prezerve, Schneider said, “Because they were a publicly traded company and I didn’t mind that they received the glory for their shareholders.”

Together, Schneider and Calgon contracted with QVC who Schneider was already very successful with selling his products to and began selling the jewelry boxes early in 2001. So far, it was a win-win situation. Before a single jewelry box was sold, however, Schneider said QVC executives at the highest levels asked him to share the technology with other product suppliers of jewelry storage, including a woman named Lori Greiner, a regular product contributor to QVC. Apparently, a home shopping network can benefit by creating competing suppliers because it won’t be beholden to one source to provide any particular sales item.

“QVC really pressured me soon after I approached them of a joint venture to co-license with what would be my competitor’s, and at the end of the day, Superman calls the shots so don’t pull on his cape,” Mark explained to me. “I told (QVC) we would consider possibly licensing but we wanted to focus on creating the category 1st, that did not sit well with them.”

Schneider was bound at the time by a contract with QVC that forbid him from taking his products to any other home shopping television network that competed with QVC. Only through discovery proceedings for a lawsuit Greiner later filed against Schneider and Calgon did they learn that QVC was conspiring with Greiner to sell anti-tarnish jewelry boxes provided by her. Discovery revealed an email from a QVC employee to Greiner that informed her Schneider would not license the technology to her at that time and QVC encouraged her to find alternative technology to compete with Prezerve.

“I was stunned,” Schneider said. “We didn’t know QVC was in communication with her and encouraging her and others. We thought they were one hundred percent behind us and loyal to our venture, and only through discovery did we learn they were in collusion with her the whole time. I cannot tell you the betrayal I felt. However, it brought me back to what QVC’s then EVP of merchandising said to me in our meeting, “ if you do not agree to license to our existing jewelry box vendor’s you could put them out of business with this technology. ” That statement resonated loud and clear after all the discovery I had reviewed between them!”

With Calgon awaiting approval of its patent, Greiner ( for your ease only) filed for a provisional patent for her product only a few days after she was informed by QVC that Schneider would not license his technology to her. She then created her own competitive product to Prezerve with the encouragement of QVC.

“She found an inferior product,” Schneider said. “She couldn’t do the same tests, but it was still in the same category and QVC was the ultimate winner of both brands at the expense of me. We were doing millions of dollars in sales and she was doing millions of dollars in sales, also.”

Once Schneider and Calgon received notice that their patent application had been approved, Calgon sent a letter to QVC requesting that Greiner no longer be allowed to sell her product on the network and within the scope of this letter, Calgon’s attorney (without the consent of Schneider) threatened to sue QVC along with Grenier because she was in violation of the issued patent. Schneider said QVC froze some of For Your Ease Only’s orders until the patent issue was resolved. That prompted Greiner to file a lawsuit naming Calgon and Schneider co-defendants, seeking a declaration that For Your Ease Only did not infringe Calgon Carbon’s patent and to claim the patent invalid as part of their defense.

More importantly for Schneider, the suit claimed that Calgon and Schneider tortiously interfered with the relationship between For Your Ease Only and QVC. Calgon and Schneider filed a countersuit for patent infringement. Schneider said he and Greiner verbally agreed to drop the cases against each other after her round of depositions when his attorney claimed she committed perjury in her deposition. He and Calgon would have provided the technology and licensed different styles to her and collected royalties on her sales while continuing to sell Prezerve. Mark figured attorneys would be the true winners in the case through legal fees if it continued unadjudicated. “ I called Lori on her cell phone at the airport after her deposition, and said, Lori, where are we going with this, this will go on and on and the lawyers will be the winners, she agreed but only if Calgon would also drop their suit.”

But Calgon did not want to drop the countersuit, according to Schneider, so the case continued. Calgon agreed to provide a joint defense for him—though eventually it did not—so when several important personal and family issues (including the death of Mark’s father) became Schneider’s overwhelming priority he told his attorney he was abandoning the case and was “not going to continue in this legal charade anymore.” He was already living in Costa Rica, by this point, and had tired of the back and forth travel, not to mention the aggravation and gamesmanship being played from a legal perspective.

“When you go through all the personal things I was going through at that time, you don’t have any more energy to go through a civil patent infringement battle for endless years, with all the legal games played,” he said. “My health and my family were much more important than the money game.” Mark had spent an estimated $300,000 over three years in the case.

“She was making millions of dollars with my invention,” he said, with a shake of his head, “so she could hire all the lawyers she wanted to pursue it and keep the legal game going. QVC could have done the right thing and respected my invention and ended it, but their greed at the highest level prevented that from happening. “

Greiner and For Your Ease Only received a default summary judgment against Schneider for $2.1 million in 2006, shortly after he walked away from the suit. Under new management in 2011, Calgon settled out of court and agreed to pay For Your Ease Only $4.3 million and exit the anti-tarnish jewelry organizer business. It did not negotiate to vacate the $2.1 million judgment against Schneider.

Over the past decade, Mark says he has shelved many new and useful inventions he believes are worth millions of dollars, noting that, “It’s not a criminal offense to knock off a product. It’s solely a civil issue. I feel it should be a criminal offense and laws should be adopted to protect inventors where there is a clear violation.”

His advice for those with ideas today?

“Keep your ideas to yourself until you really understand how the game works. Search it out, only work with experts who you have found have unquestioned integrity, and do not go to a trade show or be on the internet or TV offering your idea to anyone without a confidentiality or non-compete agreement. If they do not sign it, it is a sign of no trust regardless of what they may say to you.”

As for patents, Mark calls them a “necessary evil, but try to find a patent litigator to be your partner, and give them a slice to fight your way through the war you will go through to defend your baby.”

I am still hoping he will choose to go along with the ghostwriting idea, as I think there are so many lessons to be learned from his experience as well as a helluvalotta inspiration for others in the business. And, by the way, Mark ended his saga by mentioning that he was vindicated in this whole debacle, as his brother-in-law won his legal battle with Calgon to help gain perspective on the Greiner summary judgments against Schneider.

 

Originally posted by Dane Carlson on May 27, 2014 in Guest Posts.

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