Invention Marketing and Licensing for the Inventor
There are a lot of but forthright organizations that allegedly facilitate people sell their inventions to industry. In all my years of operating as a patent lawyer, I have never return across a single one who ever used one of those organizations to effectively market or sell their invention. However, I have met several who successfully marketed their inventions themselves.
Before you are taking any steps to promote your invention, you should take a few preliminary steps.
Preliminary Patent Search – A preliminary patent search is generally a good initial step. A preliminary search of numerous patent offices will be conducted for a cheap fee (just contact a patent agent/lawyer), and it is even attainable 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 after a patent application is filed. Publically disclosing the invention before filing a patent application can potentially ruin the chances of ever being granted a sound patent. After all, several Companies will not even talk to you until you have filed a patent application.
Prepare a Formal Data Package – You ought to prepare an informative and concise information package describing you, your invention and therefore the potential market your invention reaches. The package should embrace color images of the invention, and a one page executive summary.
Prototype – It’s a heap easier to sell a product if potential patrons can see, touch and feel the product. Building a working prototype is usually a key step in selling your invention. In fact, some products are tough to prototype, in which case a non-operating mock-up could need to do. In any event, produce the most skilled prototype or mock-up you can.
Get Financing – Building prototypes and filing patent applications require funds. Finding that initial start up funding is usually tough; but, there are 2 undergone strategies, specifically partnerships and incorporations. A signed partnership agreement is one method for some folks to pool their financial resources into a project. If many investors are involved, then an incorporated company could be a better method. Primarily, the corporate takes ownership of the invention and the investors contribute money to the corporate in exchange for shares. The amount and worth of the shares can be tailored to suit the actual wants of the project.
Now that we tend to have treated some of the preliminary issues, let us look at the mechanics of selling your invention to a company. The particular steps in the method are as follows:
1. Compiling a List of Potential Patrons – Finding an organization that’s willing to buy the invention is the most challenging half of the process. It begins by generating a list of companies which will be interested in the invention. You’ll be able to use a business directory to generate that list. Business directories list corporations by the products they manufacture (or services they provide) and include basic information regarding these firms such as their address, phone and fax variety, and also the name of the president (CEO or owner). Suitable business directories may be found within the business section of the local reference library.
2. Contacting Potential Buyers – Your list of potential buyers may embody literally lots of companies. You simply call up each company on the list and ask them if they would be curious about receiving a solicitation for a new invention. Then get the contact data about who in the corporate to send your info to.
3. Presenting the Invention to Prospects – Once you have thinned out your list, the next move is to submit your data to every of the companies on the list. This may 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 about your product. Your package ought to include a cover 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 professional as possible. Don’t attempt to overwhelm the recipient – you wish to impress them, not burden them.
4. Follow Up – Do not expect the prospect to return to a fast decision concerning the invention. It may take an opportunity many months (even a year or more) to create up his/her mind on a project. You have to be patient. It’s necessary to periodically follow up with the corporate however don’t “pester” the prospect. Keep in mind, the people considering your invention are most likely quite busy with many different comes – annoying them could do very little to speed the project up and might cause them to drop the project altogether.
5. Negotiations – If you find an organization that is interested in choosing up the project, then be prepared to barter the terms of the sale. The key here is to be reasonable. From my expertise, nothing kills off a potential licencing deal faster than an unreasonable inventor. Realistically, the foremost you’re probably to get could be a sensible come back on your investment. Requesting a smaller signing fee together with a modest royalty is much more doubtless to come up with a signed agreement than holding out for a huge payoff.
6. Royalty Quantity – I’m usually asked the query “how much can I sell my invention for”. I don’t apprehend the solution; but, here are a few rules that will help you figure out a cheap royalty rate. Initial of all, attempt to negotiate a royalty which is weakened in to 2 elements, an initial signing payment and an annual royalty payment. The initial payment ought to cover most of your costs of the project. The annual royalties should represent an amount that is sufficient to represent a smart return on your investment without being a burden on the manufacturer. The final “guideline” is to raise for a small share (1% to 5%) of the net sales of the product. It’s conjointly potential, and in some cases advisable, to fix the annual royalty payment to an easily calculated quantity (e.g. $1.00 per unit sold).
Selling your invention to a manufacturer is attainable but it is not easy. How successful are you doubtless to be? From my experience, individual inventors are so much additional seemingly to successfully sell their invention by themselves then by prying some invention promotion organization. Like any business, the chances of success are a perform of your determination, knowledge and willingness to require risks.
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