Invention Marketing and Licensing for the Inventor
There are a lot of less than forthright organizations that allegedly facilitate people sell their inventions to industry. In all my years of working as a patent lawyer, I have never return across one person who ever used one of those organizations to effectively market or sell their invention. But, I have met many who successfully marketed their inventions themselves.
Before you’re taking any steps to plug your invention, you must take a few preliminary steps.
Preliminary Patent Search – A preliminary patent search is usually a smart 1st step. A preliminary search of varied patent offices can be conducted for a affordable fee (simply contact a patent agent/lawyer), and it’s even potential to conduct one at no cost (see the US patent office at http://www.uspto.gov/)
Patent Application – Don’t publically disclose your invention till once a patent application is filed. Publically disclosing the invention before filing a patent application will probably ruin the chances of ever being granted a legitimate patent. Of course, many Firms will not even speak to you until you’ve got filed a patent application.
Prepare a Formal Information Package – You should prepare an informative and concise information package describing you, your invention and also the potential market your invention reaches. The package should embody color pictures of the invention, and a one page govt summary.
Prototype – It is a ton easier to sell a product if potential consumers can see, touch and feel the product. Building a operating prototype is typically a key step in selling your invention. Of course, some products are tough to prototype, in which case a non-working mock-up could have to do. In any event, produce the foremost professional prototype or mock-up you can.
Get Financing – Building prototypes and filing patent applications require funds. Finding that initial start up funding is usually difficult; however, there are two knowledgeable methods, particularly partnerships and incorporations. A signed partnership agreement is one way for some folks to pool their financial resources into a project. If several investors are concerned, then an incorporated company may be a higher method. Primarily, the company takes ownership of the invention and the investors contribute money to the corporate in exchange for shares. The amount and value of the shares will be tailored to suit the actual wants of the project.
Currently that we have prohibited a number of the preliminary problems, allow us to look at the mechanics of selling your invention to a company. The actual steps in the process are as follows:
1. Compiling a List of Potential Consumers – Finding a company that’s willing to buy the invention is the foremost difficult part of the process. It begins by generating an inventory of corporations that may be curious about the invention. You’ll be able to use a business directory to get that list. Business directories list firms by the products they manufacture (or services they provide) and embody basic info regarding these firms like their address, phone and fax number, and the name of the president (CEO or owner). Suitable business directories could be found within the business section of the local reference library.
2. Contacting Potential Buyers – Your list of potential patrons might embody literally tons of companies. You merely call up each company on the list and raise them if they’d be inquisitive about receiving a solicitation for a replacement invention. Then get the contact data regarding who in the company to send your information to.
3. Presenting the Invention to Prospects – After you have got thinned out your list, the next step is to submit your info to every of the companies on the list. This could involve calling the people identified to be the “contact” for brand new product concepts and telling them that you are sending them an information package concerning your product. Your package ought to embrace a cowl letter and a 1 page synopsis of your product (as well as a picture). The information must be clear, concise and it must appear as skilled as possible. Don’t strive to overwhelm the recipient – you would like to impress them, not burden them.
4. Follow Up – Do not expect the prospect to come back to a fast call concerning the invention. It may take an opening several months (even a year or additional) to create up his/her mind on a project. You’ve got to be patient. It is important to periodically follow up with the company however don’t “pester” the prospect. Keep in mind, the people considering your invention are in all probability quite busy with many alternative comes – annoying them could do very little to hurry the project up and might cause them to drop the project altogether.
5. Negotiations – If you discover a corporation that’s curious about picking up the project, then be ready to negotiate the terms of the sale. The key here is to be reasonable. From my experience, nothing kills off a potential licencing deal faster than an unreasonable inventor. Realistically, the most you’re doubtless to urge is a sensible return on your investment. Requesting a smaller signing fee along with a modest royalty is far a lot of possible to generate a signed agreement than holding out for a massive payoff.
6. Royalty Quantity – I am sometimes asked the question “how abundant can I sell my invention for”. I don’t recognize the solution; but, here are a few rules which can help you work out a cheap royalty rate. First of all, try to barter a royalty that is weakened in to 2 parts, an initial signing payment and an annual royalty payment. The initial payment ought to cowl most of your prices of the project. The annual royalties should represent an amount which is sufficient to represent a good come back on your investment without being a burden on the manufacturer. The overall “rule of thumb” is to ask for a little proportion (one% to five%) of the web sales of the product. It’s additionally possible, and in some cases advisable, to mend the annual royalty payment to an simply calculated amount (e.g. $1.00 per unit sold).
Selling your invention to a manufacturer is doable but it is not easy. How successful are you seemingly to be? From my experience, individual inventors are far a lot of likely to successfully sell their invention by themselves then by prying some invention promotion organization. Like all business, the possibilities of success are a perform of your determination, knowledge and willingness to require risks.
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