How to Get Your Invention Licensed and Promote It

How to Get Your Invention Licensed and Promote It

Several groups that claim to assist people in commercializing their discoveries are less than honest. Working as a patent attorney for many years, I have never come across a single client who successfully used one of these groups to market and sell their idea. Yet, I know a few inventors who went it alone in the field of product promotion.

There are a few things you should do first before you try to sell your idea to the public.

In most cases, the first thing you should do is conduct a preliminary patent search. You can do a free preliminary search at the US Patent Office (http://www.uspto.gov/) or pay a patent agent or lawyer a modest fee to search multiple patent offices.

Don't tell anyone about your innovation until you've applied for a patent on it. Prior public disclosure of an idea can destroy any chance of obtaining a patent for it. In fact, many businesses won't engage with you at all unless you've already taken the first step in securing a patent.

You should put together a formal information packet that briefly but accurately describes you, your idea, and the market you hope to reach. Color photos of the invention and an executive summary of no more than one page should be included in the packaging.

Selling a product is much simpler when potential purchasers can get their hands on a physical prototype. If you want to commercialize your idea, you probably need to build a prototype first. Then again, some items are just too complicated to prototype, and a non-functional mockup may have to do. Make sure your prototype or mockup looks as good as possible.

Acquire Funding: Creating prototypes and submitting patent applications both need money. Although partnerships and incorporations have been around for a while, they are still viable options for securing the first money needed to launch a business. When two or more people want to work together on a project and pool their resources, they can do so by signing a partnership agreement. Establishing a corporation is the optimal strategy when multiple investors are involved. The investors put up cash, and the corporation gets to keep the invention. Shares can be issued in any quantity at any price to best suit the requirements of the project.

Now that we've covered the basics, let's dive into how to really market your innovation to a business. Here are the concrete measures taken:

Create a Buyers' List Trying to find a corporation interested in purchasing the invention is the most difficult part. The first step is to compile a list of potential investors in the invention. To compile such a listing, simply consult a trade directory. The most basic information on a company, such as its address, phone number, and president's name, is typically found in a business directory, which also organizes businesses according to the goods or services they produce (CEO or owner). It is possible to find useful directories for businesses in the library's business department.

Making Contact with Possible Buyers Depending on the size of your business, your list of possible purchasers could contain hundreds of different organizations. Calling each business on the list to see whether they want to be contacted about a solicitation for a new invention is easy. The next step is to find out to whom you should address your correspondence within the firm.

Introduce Your Idea to Potential Partners Once you have narrowed down your list of potential partners, the next step is to present your invention to each of the remaining companies. One example of this would be to notify the "contacts" for fresh product ideas via phone that you would soon be sending them a package of information. To complete your submission, please include a cover letter and a one-page summary of your product (including a picture). In addition to being precise and polished, the data must be easy to understand. Your goal is to impress, not burden, the recipient, so avoid bombarding them with information.

In the fourth and final step, follow up, you should not anticipate a speedy decision from the prospect on the invention. A client's decision on a project could take months, or possibly a year or more. Patience is required. Contact the company on a regular basis, but avoid becoming a "pessimistic nag" to the prospect. Keep in mind that the people looking at your invention are undoubtedly swamped with work already, and that nagging them won't help move things along any faster.

Be prepared to discuss the terms of the sale if you locate a company that is interested in picking up the project. Being reasonable is essential. I have found that an unreasonable inventor is the fastest way to ruin a licensing arrangement. In all likelihood, a satisfactory rate of return will have to suffice. Requesting a lesser signing fee in addition to a tiny royalty is much more likely to result in a signed agreement than holding out for a large payment.

Royalty Amount: The inquiry "how much can I sell my innovation for?" is the sixth most common one I get asked. I can't give you a definitive answer, but the following guidelines should help you arrive at a fair royalty rate. The first step is to try to settle on a royalty that includes both a signing bonus and a yearly payment. You should be able to cover most of your project expenditures with the initial payment. You should get annual royalties that are sufficient to provide a satisfactory return on your investment without being a financial burden on the producer. As a rule of thumb, it's reasonable to seek a commission of between 1 and 5 percent of the product's gross revenue. Fixing the annual royalty payment to an easily determined figure (for example, $1.00 per unit sold) is also an option and, in certain situations, recommended.

It's conceivable, though challenging, to sell your innovation to a manufacturer. What is the likelihood of your succeeding? In my opinion, individual inventors have much better luck selling their products without the help of an invention promotion company. One's odds of success in this endeavor are similar to those of any other: they depend on one's level of dedication, expertise, and willingness to take calculated risks.