How I’m protecting my software IP with a patent

Frank Grasso founded SEO marketing firm eChannel Online back in the 1990s, well before AdWords, but started work on new software that takes inventory from a website and then creates dynamic ads.

Since then, Grasso has patented his software. But now the company, which turns over $3 million a year, faces another problem – how to create commercial agreements with the companies using their patented technology.

How did this whole patent business begin?

The story actually starts back in Melbourne in 1999. I was one of the first people working on SEO, and it was all very new. I pretty much just survived as an SEO consultant until 2011, when the industry started to develop. It was quite small, and everything was pre-AdWords.

When AdWords started along, we played with the ads. I was specialising in travel because that was the industry spending the most money on search, so it didn’t take long to move across to AdWords. And being in the travel industry, you get budgets quickly – they didn’t need a lot of convincing.

When did you start developing the software?

I invested my own money into developing software knowing I was going to be in an industry that was taking off very quickly. I was given a COMET grant from the Government, with the intention to help fund intellectual property protection.

I spent money, time and effort developing my intellectual property, and we did all the research and development.

What was the process of creating the software and filing the patent?

It’s not like we filed the patent and then created the software. We started from a research and development perspective on all this, got the idea, brought it to a point where it was going to work, and then filed for the patent. At this point I was also talking to a number of venture capitalist companies as well.

Was the whole application process frustrating?

It is. Once you start the whole process, you don’t know much about it and it can get extremely frustrating. It’s the waiting that takes so long – over six years.

So what’s happening now? Are you speaking with different companies?

American companies that operate in Australia have a much better grasp of IP issues, and those conversations are going to progress a lot more rapidly as a result.

What will be the relationship between you and these companies after agreements are made?

We own the intellectual property, they are paying us money and therefore we can use and operate the software. For people that are using the methods outlined in the patent, or use technologies that breach that patent, they are in breach, and that’s the issue facing them now. We’re talking to those people.

We’ve only been doing this a short time, and it’s only weeks into the process. So what I’m finding is that people are still trying to get a deeper understanding of what we are claiming or talking about.

There are a couple of American companies we’re speaking with that are helping us out with that and are ready to talk; it makes things much easier.

Is the software helping your market position?

My whole idea for this software was to gain a commercial, competitive advantage, and to grow market share. And that’s how we’re doing it. So to my competitors I’m telling them we can have a discussion about what we want to do going forward. And that’s where we’re at now.

This is giving us more market share, but it’s not just the patent that we use. There’s still a lot that’s unique about the technology. Our tech launches campaigns with a high degree of relevance from the outset, and that’s really good for these companies.

Have the past few years been frustrating for you?

We’re very excited about the opportunity we have here. We’ve watched our competitors get bigger over the past few years, while I’ve been getting my IP sorted. I’ve had to wait and execute our plan, although we’ve seen some good growth. I think this patent will be great for us, and there are going to be many people that will eventually need to pay license fees.

That’s the whole point of IP protection – that you’re first in. A lot of people say that sort of stuff is obvious now, but it definitely wasn’t back then.