First Impressions are Everything

Last week’s focus was on conducting market research. This week, we will discuss the importance of quality presentations.

First impressions are extremely important. Psychologists say first impressions have a “primacy effect”. The “primacy effect” in essence is the base for all impressions moving forward. So, if you make a bad first impression, all future opinions will be influenced by the first negative impression.

Solomon Asch, a famous psychologist, performed an experiment in which he provided two groups of students with a list of character traits of a speaker prior to his arrival.

The first group was given a list that described the speaker with ‘cold’ traits while the second group was given a list describing the speaker with ‘warm’ traits.

Upon the completion of the speech, the students were asked to describe the speaker as either cold or warm. Overwhelmingly, the students of group one rated the speaker as “cold” and the second group overwhelmingly rated the speaker as “warm”.

The significance of the experiment was that each group had listened to the same speaker give the same speech. It demonstrated the impact that first impressions have on an individuals view whether it is a reference someone has made, a cold call, or a letter you have sent.

This factor is extremely important for inventors to realize. Keep it in mind throughout getting a product to market. Not setting a proper first impression can hinder your progress significantly.

For Example:

• A product development executive receives a hastily recorded and unplanned voicemail about a ‘great idea’ and never returns the call.
• A customer sees a poorly packaged product and questions its quality in a split second leading them not to buy. The packaging is later improved - the customer still questions the products quality.
• A potential buyer receives a package with unimpressive materials - she never opens the presentation.

These types of situations happen on a daily basis for many inventors. While a product may be of high quality, many inventors forget that their behavior and presentation has a large impact on whether that quality will ever even have the opportunity to be evaluated.

EVERY interaction is a presentation. You should have verbal ‘material’ prepped for plan phone calls and tangible materials for group and individual presentations.

Let’s use a man named “John” who has invented a new flat tire repair product as an example.

John calls a potential distributor and leaves a voicemail saying, “Hi, this is John. I found you online and I have a product you are really going to be interested in, call me at xxx-xxx-xxxx and I’ll talk to you more about it”. Do you think John will get a call back?

The chances are that he will not. Contrast that with a voicemail discussing the same product such as this, “Hi, This is John Williams from Tire Doctor. While conducting research, I found that your company is the largest distributor of fix a flat online. Our team recently received a patent on a new version of fix a flat which has shown to fix up to 50% larger holes and holds for 4x as long making it the strongest and longest lasting product on the market. Additionally, the product is produced at a fraction of the cost allowing for us to provide larger margins for our distributors. Please call me at your convenience at xxx-xxx-xxxx to further discuss a potential partnership”. Will John get a call back?

The chances that he now will get a call back will go up exponentially. He has, in his ‘first impression’, demonstrated higher value, intelligence, and courtesy.

Additionally, if you get a call back but have poor presentation materials it is likely you will be working uphill against a force you could have avoided. Presenting your product deserves a good amount of time and thought.

Your initial presentation should be no longer than 10 pages in length in size 14 font (people will not read what is hard to read). The presentation should talk about your products features and benefits and should ALSO emphasize the benefits to them whether it is a distributor or a direct retailer.

If you are interested in personal hands on services to help position your product for presentations to potential buyers, feel free to email me at Lindsey@IdeaBuyer.com for further consultation.

This week: The importance of quality presentation materials

Next week: How to get manufacturing quotes

About the author of this article:

Lindsey Yeauger is the Director of Communications for Idea Buyer LLC, a new product development company that owns and operates IdeaBuyer.com- The Online Marketplace for Intellectual Property. The site gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email her at Lindsey@IdeaBuyer.com.

Research is Key!

Last week’s focus was on creating a prototype and drawings for your invention. This week, we will discuss how crucial it is for you to research everything about your invention. Because next Thursday is a holiday, we will be sending out the newsletter on Wednesday, so watch for it a day early!

Being told to research may remind you of being in school and preparing to write a report. Well that is basically what you will be doing. Hopefully this won’t turn you off to the idea of it, because it is so important for your invention.

Now that the internet has made it so easy to access information, at times it can make us forget about the good old fashioned LIBRARY. I would recommend using both. The library has a lot of the same information that the internet has, but it will always be free. With the reliance upon internet search engines, companies have begun to charge you for information that was certainly published in a book, and that book is probably sitting at your local library.

Here are some search engines that I would recommend using, other than our beloved Google.

1. The Thomas Register

The Thomas Register is a great tool for specified searches on manufacturers and suppliers.

http://www.thomasnet.com/index.html

2. Hoovers

Hoovers offers a searchable database of companies, executives, and expert advice.

http://www.hoovers.com/free/

3. IndustrySearch.com

IndustrySearch is a great resource if you are looking to do market research on the tech or manufacturing sectors.

http://www.industrysearch.com/

If these websites do not allow you to find the information below, try visiting the library.

With that in mind, let’s talk about what you should be researching. If you haven’t done one already, you certainly need to start with a search on potential competition. Some of you may be saying that your product is the first of its kind so it won’t have competition… WRONG!

You created your invention to solve a problem. Chances are there is already something on the marketplace that is currently being used to solve that same problem.

Research that product and the companies that it is affiliated with. Find out how long it has been on the market, how it is being manufactured, sold, and distributed. Write up a summary of the information that you have found, it may even be beneficial to do a comparison with your product.

After analyzing the results you may consider placing your product on a similar path.

Using your competitor as an example, you will need to find out who your potential users are, down to demographics. Demographics for the consumers of your industry can be found when doing your industry research. Before you begin that, start by asking yourself who is going to want to use your product and why? Try to narrow down as much as possible, WHO your target buyer is.

Start your industry research by narrowing down what industry your product should be placed in. Get as specific as possible. For instance, if you have invented a new type of pencil, you might consider your product being sold in through the office supply industry. An industry more specific to your product like writing utensils would be more beneficial. Specificity allows for more opportunities. Consider if you had gone with office supplies as your industry, you would have lost out on the school supply market.

The market that you are going to be supplying your product to is constantly changing. Some markets change with consumer spending, and some don’t. Some markets only last a year. It is extremely important for you to research the market’s history, and the anticipated changes that the market may go through. These changes will affect your product, so they are extremely important to be aware of.

Industry and market research can be frustrating and time consuming. As an added down side, much of the information on the internet is usually not free. Here is a tip for finding out information about your market or industry:

Find out what publications are specific to your product. Think about which of them would have the same or similar target audience. Look at the media kits and advertising information that they are providing for their advertisers. They have already paid to have this information researched and typically, they are placed on the website.

This write-up of all of the research you have conducted, will be a great tool in your decision making process, and also something you can use in a presentation for potential buyers or investors.

This week: In-depth Research… CHECK!

Next week: The materials needed for a great presentation!

About the author of this article:

Lindsey Yeauger is the Director of Communications for Idea Buyer LLC, a new product development company that owns and operates IdeaBuyer.com- The Online Marketplace for Intellectual Property. The site gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email her at Lindsey@IdeaBuyer.com.

Realizing your Invention

Last week’s focus was on the protection of your intellectual property. This week, creating your prototype and drawings should be on the forefront of your mind. As you move along the checklist, each step is crucial, so keep updated with the newsletter!

Now, you are ready to create proof of your idea. Proof that it CAN be made, HOW it will be made, and when it is made, IF it will work. Looking forward, these are the questions people in the industry want answers to.

Start with the drawings, if you do not already have them. These directions are based on USPTO guidelines for drawings when filing for a patent. It is better to make your drawings to meet the guidelines now, as opposed to being forced to re-do them later.

High quality, thick paper is best for your final drawing, but you may want to practice on cheaper material. The drawings should be done in black and blue ink on paper that is 21.6 cm wide and 27.9 cm long. Refrain from writing in the margins. Reproduction will be easier if the lines are dense, dark and well-defined.

Use consistent proportions throughout your drawing so that it will be clearly understood. Number every drawing or figure and every element that you have a description for. The numbering should be done consecutively. Numbers should only be given to elements of the drawing that you refer to in your description. There should not be text on the drawing unless it is necessary for the understanding of the invention.

If you are sending your drawings anywhere other than to the USPTO, date and sign your drawings so that no changes can be made without your approval.

It is important to remember that these drawings will need to be reproduced, so take good care of them. The paper should be flawless with no creases or folds.

After you have the detailed drawings and descriptions of how your invention will be designed, you can start on the road to your prototype. This is only an early stage model. It’s simply something to look at when describing how it will function. The prototyping phase is important because until you can actually play with and use your invention, you cannot be 100% positive that it will work.

A real, working, tangible version of your invention is a step that will feel like a leap in this process. A working prototype says that you are an inventor with serious intentions.

Start with a handmade prototype. Use the things that you can find around the house, inexpensive things that you don’t have to worry about making a mistake with. This will give you something to use for explanations and demonstrations, until you are able to upgrade.

The most important thing to keep in mind is that the main purpose of your prototype is to solve the problem it was created to solve. At this point, it just needs to work.

Drawings and prototypes are helpful tools when pitching your invention, so create them wisely.

Now you are just one step further to gaining credibility for your invention, and ultimately selling your idea!

This week: Create a tangible working prototype and explanatory drawings… CHECK!

Next week: Research and More Research!

About the author of this article:

Lindsey Yeauger is the Director of Communications for Idea Buyer LLC, a new product development company that owns and operates IdeaBuyer.com- The Online Marketplace for Intellectual Property. The site gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email her at Lindsey@IdeaBuyer.com.

Store Shelves…CHECK! Royalties…CHECK!

Over the next couple weeks our newsletter is going to be based on a checklist for getting your patent to market. Each step is crucial, so keep updated with the newsletter!

Protecting your intellectual property is the first and most important step in the inventing process. Use the USPTO’s recommendations to ensure that you are as protected as you think you are. There are ways to market and sell your intellectual property without formal filing, but the only way to GUARANTEE that you are protected is to make sure that you are patented.

I highly recommend starting with a provisional patent. They are inexpensive compared to a full patent, and they protect you for a year while you are doing market research. The results of your research will let you know if you want to continue to move forward and spend the money for a full patent.

File a Provisional Patent Click Here

While you are awaiting your provisional patent, you will be in a patent pending status. This is good, but there is always a chance that you could be denied for one reason or another. In order to make sure that you are covered, use partial disclosure when you describe your idea to anyone that has not signed a non-disclosure agreement.

If you are wondering how to explain your idea without giving it away, use this to help you:

“Selling intellectual property is like selling a cake. Show the buyer how good it looks. Show the buyer how good it smells. Let the buyer taste how good it tastes. You can show them why it will work and why it will sell, but you don’t have to give them the recipe.”

Anyone who knows about your non-patented intellectual property should be signing a non-disclosure agreement. Now when I say anyone, I mean anyone. Friends can easily become foes, people get divorced, and some people just have big mouths. If they know that they are legally bound to keeping your idea a secret, they will be more likely to actually do it. Keep several non-disclosure agreements on hand and this will be easier to accomplish.

This week: Protect your idea and CHECK it off the list!

Next week: Creating a prototype and drawings!

About the author of this article:

Lindsey Yeauger is the Director of Communications for Idea Buyer LLC, a new product development company that owns and operates IdeaBuyer.com- The Online Marketplace for Intellectual Property. The site gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email her at Lindsey@IdeaBuyer.com.

How do I protect my intellectual property and still move it along in the sale process if it is not yet patented?

Sound familiar? Lately, that question has been asked most frequently by our members to our Idea Buyer staff.

Well, let me first say that you need to get your intellectual property protected before it slips or is ripped from your fingers. Patents are the best way to do this. However, something important to understand is that patents protect inventions and not ideas. Without something tangible produced from your idea, a patent is not worth much. The USPTO only can legally protect those who do something with their idea. So, before filing for a patent or provisional patent, create a prototype or model.

If you do not yet have a tangible example of your idea, with or without a patent, use caution when
talking to others. Your idea should be on a strictly “NEED TO KNOW” basis. If they don’t need to know, don’t tell them. You only set off the chain reaction for them to go tell others and for one of those others to capitalize on your idea.

For those whom you decide “NEED TO KNOW”, have them sign a non-disclosure agreement. The
contract will ensure that both parties involved understand that the conversation(s) you have about your IP will remain secretive. And if for some reason the person violates that contract, you have the
documentation necessary to file a law suit.

Still, the best way to protect your IP is to create a working prototype as proof of your concept as soon as possible. Only a patent will protect you, and only if you have visual embodiment of your idea.

So let’s talk patents.

For the majority of inventors, filing a provisional patent is a good idea. It is a way to protect your idea for 12 months while you find out if there is a real market and demand for your product, making it worth the extra money to file a full patent.

If you have the necessary funds and feel more comfortable, you can certainly go to a registered patent attorney. For a provisional patent they will charge you about $1,800.

Have just enough money to cover the filing fees? File the provisional patent yourself!

This is USPTO’s official application for a provisional patent:

http://www.uspto.gov/web/offices/pac/provapp.htm

Unfortunately, it is not “user-friendly” but it does break down each step of the process and what should go into it.

Another option for filing yourself is Legal Zoom. The website offers legal documents in a user-friendly fashion.

http://www.legalzoom.com/provisional-patents/provisional-patents-overview.html

Either will work and will end in the same result.

Until you have your IP patented, I would like to share a way of thinking about IP sales:

“Selling intellectual property is like selling a cake. Show the buyer how good it looks. Show the buyer how good it smells. Let the buyer taste how good it tastes. You can show them why it will work and why it will sell, but you don’t have to give them the recipe.”

About the author of this article:

Lindsey Yeauger is the Director of Communications for Idea Buyer LLC, a new product development company that owns and operates IdeaBuyer.com- The Online Marketplace for Intellectual Property. The site gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email her at Lindsey@IdeaBuyer.com.

Now that you have a patented invention and are ready to license it, you still have to contend with the thorniest obstacle of all: the patent license negotiation. This is when you and the prospective licensee hash out what you believe a fair license agreement to be. However, this is not something you should rush into. In this article we’ll offer tips and suggestions for making sure the negotiation goes smoothly – and hopefully in your favor!

1) Determine your objectives

Why are you trying to license your patent? What are you hoping to get out of it? The obvious answer is “Because I want money”, but it has to go deeper than just that. Do you want to wash your hands of the patent altogether? Do you still want some day to day interaction and a say on how it gets marketed? If so, these are things you need to specify and take into account during the negotiation, and it helps greatly if you go into it with your priorities fresh in mind.

2) Assemble a team with the right players

According to a very detailed scholarly article called “Best Practices in Patent Negotiations”, you must enter into negotiations with the right “team” behind you.

“Whatever the reason, your team should include a business development executive, a scientific-technical expert, a decision maker and a licensing attorney. The business development executive (sometimes the CEO at smaller firms, or a technology transfer professional at a university) usually finds the deal, brings the parties together and keeps the process moving. The scientific-technical expert provides scientific and technological expertise and conducts due diligence research relating to the technology at issue. And the decision maker must have authority to commit your party to particular deal terms. In our opinion, document drafting is often easier when an attorney has the benefit of participating in negotiations and understands the positions of both sides. Once the team is in place, it’s important to meet and reach an understanding of the motivation for the deal and to go over each member’s responsibilities.”

SRC: http://www.nature.com/bioent/2007/071001/full/bioe.2007.5.html;jsessionid=2C5E5863252650524BC5F8A37F92A815

We should note that it is not always necessary to have a separate person handle each task. For example, in your situation, you might be the businessman and the technology/scientific expert. If so, you don’t need to go out and bring in a separate businessperson. However, the point remains that all of these considerations must be accounted for by someone, and you should know exactly who is responsible for each one before negotiating to license your patent.

3) Determine the value the licensee will add to the patent

Typically, the reason you are licensing the patent include not having the resources to market and capitalize on it yourself, or not wanting to. It is important, therefore, to assess how qualified the potential licensee is to capitalize on the patent. What assets, strengths, and abilities do they bring to bear that increase the value of the patent, over and beyond what it would be if you just held onto it? The article elaborates:

“Your team should evaluate and determine your own marketing, technical, sales and services strengths as well as the strengths of the other party in the field of the patented technology—all are relevant to licensing fee amounts and royalties to be paid back to the patent holder. These and other contract provisions will help the parties define the scope of the licensed technology and their competitiveness as potential licensing partners.”

Another step you should take leading up to negotiation time is exchanging a term sheet with the potential licensee. This helps establish a starting point so that both parties can get straight to business when the actual negotiation begins. Here are some of the things you might want to include or look for in a term sheet:

“The term sheet typically outlines the major issues in a potential deal. These include the following: the licensed product or process; licensed territory; preliminary thoughts on fees and royalties; technical information and training required to develop and manufacture, sell and service the licensed product (and who will be responsible for the same); sales and service support; degree of exclusivity; and duration of the license.”

As for the negotiation itself, the primary sticking point will how broad the licensee’s rights are (ie, how much it can do with the patent) and how much they will have to pay you. While this is inherently a somewhat speculative process, you can and must aim to create a license agreement both parties can live with. Here is one approach, using specific numbers, recommended by “Best Practices in Patent License Negotiations”

“A rational approach is to develop a win-win scenario by looking at the actual investment return of each party. If the licensor has spent $10 million to develop the compound, and the licensee will spend an additional $100 million to commercialize it, negotiating a deal in which the licensor receives 10% of the return may be realistic, although the licensee may want a greater return based on assuming a greater risk (greater investment). Alternatively, where a licensed compound is ready for commercialization or is on the market, more standard accounting techniques may be used because the risk/return ratio can be more directly calculated.”

As the licensor, you will want to grant as narrow exploitation rights as you possibly can. While the licensee will want as much leeway to capitalize on the patent as possible, it is in your best interest to be able to license it out to others if you see fit. One way to provide for this is to only license the patent out for specific uses, leaving you free to license it to other people for other uses.

Here are some other ways to get your licensee to accept narrower exploitation rights:

“There are compromises: you may grant a broad field of use with the right to retract fields if you present a use to your partner and your partner elects not to pursue it, or you may grant a narrow field of use and give your licensee the right of first refusal on other uses. Alternatively, your licensee could convince you to restrict any future licensees from particular uses that fall within the licensee’s specialty or area of expertise.”

As you can see, being focused before the negotiation and creative during it lets you grant a patent license that puts money in your pocket and leaves you free to pursue other options.

10 Tips for Commercializing Your Patent

When it comes to selling or licensing your patent, there are a number of ways to close the sale. Whether you directly approach a buyer, place ads or join listing websites, the methods open to you are virtually limitless. The key is to use the techniques that suit your own needs, strengths, and weaknesses. In this article, we’ll explore 10 different ways to sell or license a patent and you can evaluate which one(s) suit you best. The first five will focus on attracting a buyer, and the latter five on closing the deal.

1) Use a listing website

Thanks the Internet, various websites exist for buyers and sellers of patents to find each other. One such website is IdeaBuyer.com, where patent holders can list their patent and receive professional help in finding a buyer for it. Other websites do this as well, and the advantage is that everyone on the site is ostensibly there to accomplish this same task. This cuts down on the friction involved with other methods, where you are trying to take someone out of some other task and get them into the mindset of buying or licensing a patent.

2) Approach manufacturers directly

If you already have a manufacturer or a few manufacturers in mind, you can approach them directly about setting up a meeting. The key is to get in touch with their buyers or business development personnel, as these are the people with the scope and authority to make decisions like buying or licensing patents.

3) Set up a website

If your patent is complex or highly desirable, you might want to set up a website explaining it. Additionally, this website would offer a way for interested buyers or licensees to get a hold of you and learn more information. Having a website gives off an air of professionalism and seriousness that high-spending buyers will like to see. It helps defray the fact that they will be dealing with “just some guy.” You can combine this strategy with placing ads or using listing websites for maximum effectiveness.

4) Search the Thomas Register

If your patent is at all mechanical in nature, the Thomas Register is an excellent place to look. Not only does the Thomas Register list a lot of manufacturers and suppliers, they allow you to search for them based on the products they make. This makes it very easy to find people who create or sell things relevant to your patent, which is where you want to target your efforts. The link below will take you to the Thomas Register’s website. You can search by product/service, company name, brand name, and more.

SRC: http://www.thomasnet.com/

5) Place ads

Another effective way of selling or licensing patents is to advertise for it in places your target buyers are likely to see. For example, a patent covering new industrial equipment could be advertised in a trade magazine or journal relating to that field. Ads can also be placed in general interest locations like Craigslist.com. The idea is to place it where people you want to reach are likely to see it. Think about the types of magazines or websites those people visit and make your ad placing decisions from there.

6) Use an exclusive license

When you license a patent, the first decision should be whether it will be an exclusive or non-exclusive license. In general, people looking to license your patent will prefer an exclusive license. This way, they will be the only ones allowed to profit from the patent, and have the right to enforce violations of it if anyone tries to “copycat” what they end up bringing to market. However, you may prefer a non-exclusive license.

7) Use a non-exclusive license

As the name suggests, a non-exclusive license grants someone rights to utilize the patent, but on the understanding that you may license those rights to others as well. For obvious reasons, potential licensees do not usually like this kind of licensing deal. It creates the threat of competition in the future that will make their lives harder. However, some licensees will agree to this, and it would be advantageous to try and work out such a deal.

8) Use performance obligations & milestones

One of the biggest fears you may have as a patent holder is “What do I do if the licensee fails to capitalize on the patent?” Not every licensing deal works out as hoped, and this is a reality you must in some way face. Therefore, you may want to write certain requirements into the contract so that you can revoke the license if this happens. These are called performance obligations, or milestones. Simply put, you can write sales targets, profit margin expectations, or just about anything else that both parties agree on into the contract. If the other party does not meet these obligations, you can revoke the patent.

9) Use royalty requirements

Another way to ensure that your financial needs are met is to simply use royalty requirements. Under this approach, you do not require them to capitalize on the patent in any specific way. Your only concern (and the only thing written into the contract) is that by X date, you want to start receiving Y dollars in royalties on a monthly, annual, or semi-annual basis. This might be worth looking into if you want to get paid, but don’t want to be hassled with figuring out what reasonable sales or profit targets are.

10) Approach buyers as a Product Developer

It seems like a silly semantic difference, but calling yourself a Product Developer as opposed to an inventor reassures people. It makes companies and individuals think that you are savvy, that you are in the business of creating and selling patents as a career and you know what you are doing. Filling this role will assist you whether your goal is to sell or license your patent.

No matter what your strengths are as a person or what your patent covers, some assortment of these 10 strategies will help you accomplish your goals!

I’ll just sell the patent!” Ever find yourself saying this as a kind of all-purpose declaration of how all your hard work will eventually pay off? The truth is that while selling a patent can be very lucrative, certain steps need to be followed. In this article, we will offer 10 tips to make your patent selling efforts more effective.

1) Target your efforts

Of all the tips on this list, this is the one you should circle, underline, write on your forehead and read to yourself when you look in the mirror each morning. You cannot sell a patent to someone who does not want it. While this seems obvious enough, many inventors (especially those with Inventor Baby Syndrome) cannot fathom why totally unrelated companies are not interested in buying their patent. To ensure that this doesn’t happen to you, do some research at the Thomas Register. There, you can search for manufacturers and suppliers by the field they are in. This will provide you with a nice, long list of targeted, potential buyers.

2) Do not be greedy

Remember the old saying: pigs get fat, but hogs get slaughtered. The idea is to not be too greedy in setting or insisting upon a price for your patent. This sounds easy to say in theory, but difficult to do in practice. The key, however, is to remember an all-important truth about patents. Many of them produce no income for their owners. In fact, some patents even expire while the owner fails to capitalize upon them! This does not mean you should be desperate to sell, but it does mean that you should not be turning away reasonable offers. Do not try to squeeze every last drop out of the buyer.

3) Make your patent look appealing

Why should someone want to buy your patent? You had better ask yourself this question, because anyone thinking about buying it is going to be wondering the same thing. Is there a large market waiting to be capitalized on? Does your patent position the owner to jump in before competition gets fierce? Is your asking price paltry compared to the expected profits? These are the types of things you will want to emphasize in your selling efforts. Focus on benefits to the buyer. See step 6 for more on this crucial point.

4) Get legal advice before the sale

Selling a patent is not like holding a garage sale. There are complex laws governing how and under what terms a patent may be sold. Therefore, you should not attempt to sell yours without getting competent legal advice. A patent attorney, while expensive, can ensure that your sale takes place in compliance with the law, and in such a way where the other party cannot use “weasel clauses” to back out later on. Consider this a must in your patent selling efforts.

5) Create a powerful presentation

The ins and outs of a powerful patent presentation are beyond the scope of this article, but suffice it to say that you should have one. Fortunately, IdeaBuyer has a comprehensive how-to article on this very subject! See our article “10 Tips for Creating a Powerful Presentation” for practical guidance and key considerations to keep in mind.

6) Decide whether selling is truly what you want to do

Some patent holders are unaware that they have other options besides selling. The other main option is to license your patent, or grant someone rights to it without actually turning over the patent itself. The advantage of this approach is that you can capitalize on the patent in the form of royalties while still owning it, and being able to revoke it if certain conditions are not met. Of course, selling may still be the best option, but you should make sure this is the case before you sell.

7) Run the numbers before setting an asking price

While you don’t want to be greedy (as per tip number 2), you also want to make sure the price you get is worth your while. This becomes important if you are already capitalizing on your patent in some way, such as by selling a product. You want to make sure you make enough from selling your patent to replace that income and then some. Otherwise, why not just keep the patent for yourself? Tally up the profits you’ve been making and try to get a price at least 10x the yearly amount that you make. This is the standard calculation in corporate acquisitions and a good starting point for patents you are already making money from.

8) Bring the underlying idea to market first

Most patent holders want to sell precisely to avoid this task, but think about it from another angle. If you are a potential buyer, which are you more likely to buy: a totally unproven patent that just sounds nice, or a patent which has already been capitalized on, and demonstrated its success? If you are at all entrepreneurial, and you feel you are up to the task, you should definitely consider bringing the patent to market. This will make the task of selling it far easier, and allow you to claim the residual income that result after some initial hard work.

9) List your patent on a patent listing website

Thanks to the Internet, patent holders have a whole new medium for selling their intellectual property. One of the best ways is to use listing websites that bring buyers and sellers together and help them complete sales in a safe, legal way. IdeaBuyer.com, for example, allows patent holders to list their patent and help ensure that only relevant potential buyers will see it. They will also receive assistance in negotiating with buyers and closing the sale in the proper way. No matter which site you use, patent listing websites are worth looking into.

10) Attend trade shows

One great place to find patent buyers is at trade shows. If you have a technology or software patent, for instance, it may be worth your while to set up a booth at a tech expo where relevant professionals and corporations can see what your patent is all about. It is a more proactive approach than placing ads and can sometimes be highly effective in getting the patent sold.

Chances are, some of these tips will fit your style, strengths, and weaknesses more than others. Just pick the ones that suit you best and you should be well on your way!

Learning To Sell Your Patent

So, you have ensured that your intellectual property is securely yours by getting a patent- NOW WHAT?

Often inventors patent their intellectual property and then are stuck on how to go about selling or licensing it. Is this you? Good news, I have some ways to help get you out of the waiting stage and on to the moving along stage.

Here is a quick lesson in sales, marketing, and advertising important for inventors:

Lesson One: Appearance
By now you should have not only a patent, but also a working prototype or at least a great drawing. Keep in mind, people interested in buying your patent will not only want to read your full patent (pages and pages of legal jargon and small print), they will want to see it packaged in a manner that makes it worth buying.

What I may consider basic, some people may not be aware of how these things can affect their sale or non-sale of their patent. Appearance is crucial in the business world. People say they don’t judge others based on appearance, but let me be the bearer of bad news: THEY DO! You and your patent material need to be dressed as nicely as the amount of money you want to sell it for. If you are looking to sell the patent for a dollar then feel free to dress it like something off of a dollar menu at your local fast food restaurant.

Of course, I do not recommend this. Simply wear a suit, show up with well written and easily readable material packaged in a visually pleasing way.
Okay, now you and your patent are visually appealing to potential buyers. Where do you find them?

Lesson Two: Research
It’s called good old fashioned research! A library or internet search engine should suffice.

You need to find the potential users of your patent. Who would want to use it and why? What industries would this fall under? Come up with 10-20 potential users. Then based on industries begin your research for companies that would sell to your potential users (the potential user may be the company itself).

Lesson Three: Contact
Once you know which companies you will be targeting, start contacting them! Start by sending them a professionally written letter making them aware that you are looking to sell your patent and enclose a clear and concise description of your patent.

If you are having trouble getting into contact with companies through direct mail, try attending a trade show! They are a great way to meet people in your target sales group and also to gauge interest in your product. You may also meet other inventors and gain valuable knowledge of the market you are trying to get into.

Lesson Four: Advertise
How will people know that your patent is for sale if you don’t make them aware? Advertising that your patent is for sale will only help you.

Let’s say “Joe” is interested in buying your patent. Joe looks on IdeaBuyer.com under patents for sale and does not see your patent listing. How will he buy it? He won’t. Joe will end up coming across hundreds of other great patents for sale and invest his money in them. Do you want Joe’s money or do you want to give it to someone else?

A patent buyer interested in buying your patent can’t buy it if he can’t find it for sale.

Recapping today’s lessons in selling your patent:
1: You and your patent material need to look like they are worth what you are selling them for.
2: You must research! You need to be the one able to answer all of the questions about your product, its markets, industries and potential users.
3: Get the word out! Write a professional letter to potential buyers letting them know your patent is for sale.
4: Advertise. No one will know your patent is for sale unless you tell them.

Now get moving!

About the author of this article:

Lindsey Yeauger is the Director of Communications for Idea Buyer LLC, a new product development company that owns and operates IdeaBuyer.com- The Online Marketplace for Intellectual Property. The site gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers. You can email her at Lindsey@IdeaBuyer.com.

Did that headline grab your attention? We hope so! The all-too-unfortunate truth today is that many inventors waste tons of money on things that they A) do not need yet, B) could get cheaper, if they did their homework, or C) may not ever need at all. This is a major problem, for even inventors with market-busting ideas will probably not see a dime from their efforts if they go broke by making these types of mistakes first. That said, let’s cover some of the most common and not-so-common inventor debt sinkholes.

1) Applying for a patent too soon (or right away).

By far the biggest money-wasting mistake inventors make is to apply for a full utility patent too soon. Why is this a waste of money? A few reasons. The first is that patents are expensive. Really expensive. The cost of filing a patent (including attorney’s fees) ranges from $4,500 for a “relatively simple” invention to $15,000+ for a “highly complex” invention. Now, take a minute to reflect on those numbers and ask yourself, “Am I at all certain that my invention is going to do well enough to justify those fees?” If you’re just getting started, and you’re honest, the answer is probably “I’m not sure.” Don’t spend money on a patent until you are more sure than you are now. Talk to some trusted sources, do some market research, and see if your invention has legs before spending this kind of money.

2) Pouring your savings into a “really great” (but unresearched) idea.

A similar money-wasting mistake is when a starry-eyed, novice inventor dumps his life savings into creating “This really great idea” he thought of. The problem with this approach is the huge risk. Tragically few inventors take the time to do any kind of market research or in any way answer the question, “Does anyone but me think this invention is worthwhile?” But if you haven’t answered that question (and if the answer isn’t “yes”), you should not be spending a lot of money pursuing it. Of course, you\’ll never be 100% sure your invention has a market. To paraphrase Perry Marshall, “If inventing were a color-by-numbers activity where you followed a blueprint and got a guaranteed result, it would be a job.” But still - do at least some homework before emptying your bank account on an invention.

3) Borrowing money to finance an invention with no repayment plan.

If you’ve avoided the two pitfalls above, congratulations! - but you’re not out of the woods yet. Even the most realistic inventor pursuing the most surefire idea can go broke by financing the invention without a repayment plan. By “repayment plan” we don’t necessarily mean a fixed, signed agreement to pay a set amount over a set time. Rather, we are just saying that you should have some rough idea of how and when you will repay what you borrow via a credit card, cash advance, or bank loan. Don’t rush into the first financing opportunity you think of if not repaying it on time gets a lien placed on your house. Try instead to approach the matter of financing your invention in a sensible, logical way, researching your best options and consciously planning how you will repay.

4) Agreeing to supply your invention to stores without enough inventory or capacity.

If you have persevered through the first three mistakes and actually have gotten your invention on store shelves, give yourself a pat on the back. You are savvier than most. But beware, for if you don’t take the proper precautions, you could soon become a victim of your own success. Many big-name retailers (and especially “catalog” companies) want you to have excessive amounts of inventory available to handle a sudden spike in demand for your products. If your invention becomes a hot seller, they need to know you can produce enough to keep up. If you can’t, you will either go under completely, or go into crushing debt to stay afloat. Neither of these are at all desirable, so make sure you can keep up!

If there’s a common thread in all of these mistakes, it’s lack of preparation and foresight. Luckily, these are skills you can learn and even master if you are truly committed to doing so. We can’t teach you everything about inventor planning, research, and risk management in one article. But you should continue doing this type of homework before spending money on an invention. (With IdeaBuyer or anyone else.)

To that end, we’ve put together a free, five-day e-mail course called “5 Secrets of Savvy, Successful Inventing” that will show you the ropes. It’s packed with common mistakes, examples of successful and unsuccessful inventions, and proven strategies you can apply to your invention today. If you’re at all serious about inventing something and making a profit (without losing your lunch in the process), sign up for the e-course and take its wisdom to heart. You’ll be glad you did.

About the author of this article:

Eric Corl is the President of Idea Buyer LLC, a new product development company and the parent company of IdeaBuyer.com. IdeaBuyer.com is a marketplace for new technology and products that gives inventors the opportunity to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers.