Turning an Invention into a Business

By Eric Corl, Idea Buyer LLC

The way most people (and infomercials) portray inventing, it seems like building something is the endgame. Create the widget, the logic goes, and your job is done. All that remains now is sitting back and waiting for fame, fortune and orders to pour in. This extends at least as far back as Henry David Thoreau, who famously declared “build a better mousetrap and the world will beat a path to your door.” Indeed, what could be more appealing from an inventor’s point of view? Unfortunately, this is not the way it usually works in practice. As marketing guru Perry Marshall countered, “Henry David Thoreau never built any mousetraps, and the world never beat a path to his door.” Marshall’s point - and our point today - is that inventing is a business. Like any other business, money is not made merely by developing a product. To truly cash in, you will need to create demand for what you invented and monetize that demand in a life-sustaining way. Several ways of doing this are discussed below.

Above, we said that turning your invention into a business starts with creating demand for the invention. But demand from who? There are actually a few routes you can take in generating demand for the invention. Perhaps the most obvious and intuitive is creating demand among customers. If your invention is a consumer product that could be sold on a store shelf, this is certainly something to consider. However, if you are going after the consumer market, their desires must be taken into account during the inventing process. Rather than merely inventing what you want, you must design, prototype, and develop what the buying public will pay for. It is possible that the latter might be something slightly or entirely different than what you imagined at the outset. Don’t let this stop you. Remember, your goal here is turning your invention into a business. Business is about finding needs and filling them.

That means it is far wiser to gauge demand for your invention at the beginning (by conducting market research or surveys) than to invent whatever you want and try to force it down people’s throats later. Many unhappy inventors have taken this path, only to find that their dreams of market success were doomed from the start. The phrase “an ounce of prevention is worth a pound of cure” comes to mind. Even if you are certain your invention has demand in general (for example, a new kind of bike tire), you can boost your odds of market success even higher by figuring out what current versions are lacking. What are some common complaints about alternatives to your invention that are already out there? Such questions will help you create something that people are already eager to buy without a whole lot of selling and hype. In fact, that is the central lesson of this entire article. The surest way to turn an invention into a business is to invent something for which there is much known, obvious, ready-made demand. If you have to convince people that they “should” want your invention, you’re looking at an uphill climb from day one.

Of course, inventors can create demand for their inventions from people other than consumers. Maybe your personal strengths and weaknesses are ill-suited to marketing your invention personally. It is not for everyone. An alternative strategy is to create demand among manufacturers, who would buy or license your invention and bring it to market themselves. Several advantages stem from this strategy. For one, you have the luxury of focusing on decision makers at a small handful of companies, rather than trying to juggle the logistics of selling in stores around the country. Conceivably, you could spend a few weeks creating a presentation, booking appointments and conducting product demos and close a deal rather quickly. The terms of the deal are completely negotiable by you and the manufacturer. For instance, the two of you could enter into a licensing agreement, whereby you get $50,000 immediately and 2% of gross product sales for 20 years. Or, you could agree to sell the invention outright for a larger up-front sum.

The main difference between creating demand among consumers vs. manufacturers is in how you promote the invention. Selling an invention in stores, again, demands publicizing the benefits of the invention to the consumer. Keeping our bike tire example, you would likely want to advertise how durable the tire is, how it is more puncture-resistant than the leading brand, and how it offers better traction over rocks, branches and mud. This is the information pertinent to a consumer’s decision making process. Manufacturers, of course, have their own decision making process. Rather than product benefits, the manufacturer is concerned with profit margin, production costs, short and long-term demand and the likelihood of the product triggering lawsuits, among other things. Pitching to manufacturers, therefore, requires having pleasing answers to these questions.

Again, the overall idea is that turning an invention into a business centers around demand. Without demand from others, money never changes hands. We cannot stress enough, therefore, that you are not inventing simply what you want. While this is a great starting point, what you personally want to invent must always take a backseat to what consumers or manufacturers will pay for. Luckily, there is often room for both to co-exist. If you have spent your life working with a product category, chances are you are one of its consumers who knows what you and others will pay for. Keeping these principles in mind will go a long way towards turning your invention into a feasible business.

Eric Corl is the founder of Idea Buyer LLC, an Ohio Limited Liability Company. Idea Buyer LLC runs and manages IdeaBuyer.com and is a leader in new product development and commercialization practices. You can email him at EricCorl@IdeaBuyer.com. If you have a product that you would like our feedback on, email info@IdeaBuyer.com.

“If you want a recipe for a startup that’s going to die, here it is: a couple of founders who have some great idea they know everyone is going to love, and that’s what they’re going to build, no matter what.”
- Paul Graham

As an inventor, it is all too tempting to fall into the “trap of the idea.” What we mean by this is that inventors and businessmen alike often end up with a kind of tunnel vision, such that they ruthlessly pursue their exact idea regardless of what their market has to say about it. The passion most inventors have about their project is so strong that their invention soon becomes an extension of themselves, and criticism of the project is often taken personally. The old “If you build it, they will come” attitude soon pervades the mindset of inventors, until they truly believe that if they could just get the project perfectly right, down to every minute detail and exact feature, the market would finally be held in awe of what they have created, and everyone and their mother would be calling in orders.

Sometimes this is the case, but it is a lot less common than you might imagine. The Segway Scooter, invented by Dean Kamen, is an example of this phenomenon. Discovering a breakthrough technology that allows gyroscopes to monitor the rider’s center of gravity about 100 times a second, Kamen decided he would use it to build a revolutionary transportation device, and that’s exactly what he did. Thanks to an absolute ton of media hype and mystery surrounding the project, and also thanks to the futuristic look and feel of the device during a time (2001) when the world was hungry for such space-age devices, the project was a moderate success. An inspiring story to be sure, but not a scenario every inventor should hang their hat on. What is most important to remember is that a business lives, thrives and dies by one thing and one thing only: Demand. With orders in hand, you’re sure to stand, when orders slow to a crawl, you’re sure to fall. With that in mind, let’s examine a few of the errors that can cause orders to slow to a crawl, and how to avoid them.

Neglecting to identify your target market is a common mistake among new inventors. We see very unique and creative ideas from very smart people all the time and one of the biggest predictors in early success is whether or not they know whom they will be selling to. When asked, “What specific group of people will use this, and why,” we are often met with a blank stare quickly followed by a rehash of how awesome and revolutionary the product is. If you cannot identify the exact kind of person who will pay money for what you are creating, do yourself a favor and dedicate some time to figuring it out.

Perhaps the most valuable lesson an enterprising inventor can learn is to be flexible and open minded about your invention. You might have a very helpful invention on paper that will make it easier for business executives to keep track of sales, but if you show it to several executives and they all recommend similar changes to your original design, chances are you should consider them. Since you will be selling to these people, their suggestions reflect what your market is looking for. Failure to adapt to these suggestions and indignantly building exactly what you think is best is little more than exercise in narcissism that is sure to cost you valuable sales. If you are truly committed to meeting the demands of your market, you might consider developing a kind of feedback loop with your customers such that they can make new suggestions to you. These suggestions will inevitably help you to identify how you can rake in more orders and expand your business to new heights, rather than hit a glass ceiling due to neglecting the requests of your customers.

Another common reason why sales do not pour in is a failure to secure widespread reach. “Reach” is your ability to spread the word about your invention and to ensure that your message reaches your target market. Many new companies fail to give this problem proper consideration, and go full speed ahead into production without any idea how they will generate publicity once they have products to sell. Many inventors brush this concern off as a secondary issue, assuming that reach will work itself out naturally once they have their amazing invention created. This is a mistake, as reach is actually of prime importance to any new inventor, and routes to exposure should be carefully thought out and planned before you get too far into production. If there isn’t a clear way for potential customers to discover your product, they have no chance to place their order.

The biggest take away from all of this is that demand for your product is the only factor that will keep you afloat in the long run. It is therefore your noblest duty as an inventor and owner (or soon to be owner) of a nascent company, to make sure that those orders pour in. By identifying your market, adapting to your customers demands, and through ensuring that new customers can learn about your product, you will be establishing your company on a solid, stable foundation with a much greater potential to succeed.

Eric Corl is the founder of Idea Buyer LLC, a new product development company which operates IdeaBuyer.com. You can email him at EricCorl@IdeaBuyer.com.

Completing the Checklist

There is little you can do in addition to the six steps that you have already completed. Now it is time for you to manage the relationships that you have, and watch your hard work payoff.

Here is a recap of the previous weeks that have brought us to completing the checklist.

Week One: Protecting Intellectual Property

Without protection for your intellectual property, anyone can potentially steal your idea. This makes it extremely difficult to sell your idea, or to expect to receive any money for it. 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.

Click Here to File a Provisional Patent

By protecting your intellectual property, you were enabled to move forward with the idea.

Week Two: Creating a Prototype and Drawings

For many people, a visual component is necessary for understanding the description of the product. Some people have a wild imagination and may picture something completely different, while other people may not be able to picture it all.

The prototyping company that we recommend is Vallmar LLC, based out of Ohio. Vallmar follows a five step model which is critical to inventor success.

1. Research
2. Design
3. Engineering
4. Prototyping
5. Production

By creating a prototype and drawings, people can visualize your product and how they would use it.

Week Three: Research!

While at times it is easy to become wrapped up in all of the information that the internet can offer, do not neglect your local library. The information that you find online may cost money, and is probably available for free 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/

Researching the market, industry, competition and end user in-depth, will provide people with information to become more interested in potentially partnering with you.

Week Four: Materials for Presenting your Idea

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.

It is extremely important to make sure that you are presenting your product and yourself in the best possible manner, in order to seal a deal. The presentation should include all of the detailed information that you found in your research.

For more information regarding hands-on Pitchbook services provided by Idea Buyer, please contact: Lindsey@IdeaBuyer.com.

Week Five: Manufacturing Quotes

One critical step in the invention process is obtaining manufacturing quotes. As an inventor, you must know the cost of making your product tangible, and ready to be sold. The manufacturing cost will play a role in many of your financial projections, and also when potential partners are considering offering you a deal.

The best way to obtain manufacturing quotes is to work with a prototyping company that regularly works with inventors and has experience working with products in your given industry.

Week Six: Creating Company Contacts

Trade shows can be extremely beneficial when trying to create contacts within your industry. Always make sure that you have business cards with you, in case you meet someone interested in your product. It will serve as a reminder, and provide them with your contact information. The card should have your name, the name of your product, telephone number, email address, and if applicable, a website address where people can find more information. Remember to make sure that the contact information is appropriate and professional.

Take notes on the conversations you have. After you meet someone that you have exchanged business cards with, wait until you are away from the person, and write on the back of the business card key information that you learned about him/ her. Key things to remember:

• The companies you discussed.
• Investors and manufacturers mentioned.
• Possible friends he/ she said might be interested or may know someone that can help.
• Where they are from.
• How long they are in town for. (If they are staying longer, you may be able to set up a meeting while you both are still there.)
• Children, spouse, or other personal information mentioned.

This information will help you to remember them and also to allow them to remember you when you contact them.

Week Seven: Seeing YOUR Product on Store Shelves and Collecting Royalties

With all of the work that you have done protecting your IP, creating a prototype and drawings, doing market research, creating presentation materials, getting manufacturing quotes, and creating company contacts, I am sure that you are ready to take a deep breath and relax. Well it’s ALMOST time for that.

By creating your presentation materials out of all of the work that you have done, it is time to present, if you haven’t already. Call upon the contacts that you have made, and ask them to take a look at your materials. DON’T GIVE UP! If one company says that they are not interested, it doesn’t mean that another company won’t be.

When a company is ready to buy or license your patent, you will create an agreement explaining the terms of selling or licensing your intellectual property. These terms should be well thought out, well negotiated, and reviewed by your lawyer before signing.

Signing does not necessarily mean all of the work is over. You should be continuing to manage the relationship with the buyer or licensee of your intellectual property, to make sure that the agreement is being fulfilled.

Other than managing the usage of your intellectual property, all you really need to do now is watch the mail for your royalty check!

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.

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!

Also, for more information on how to sell your patent, view our powerpoint tips below.

Selling Your Patent Power Point Presentation

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.

Selling Your Patent

Selling your patent outright is a quick and easy way to exit with cash in hand. It is a “take the money and run” strategy, something one would do in recognition of the fact that thousands of patents produce no wealth and it is prudent to take the early payoff if one can get it. This reality cannot be stated enough. Most patents produce nothing; in fact, some inventors toil for so long trying to find a market for their idea that the patent expires! By selling a patent outright, you avoid this outcome and ensure that you gain at least some reward for your efforts.

Selling a patent is also an attractive option for serial inventors; that is, those who intend on developing many more ideas to patent and pursue. Anyone who does this knows that it is an expensive business. Supplies, living expenses, legal costs, and other items make the creative process a rewarding but costly endeavor. By selling a patent, you can generate some quick capital to pay these expenses and/or fund the development of other ideas. This way, your operations become more self-supporting as you rely less and less on savings or income from your day job.

That said, there are some potential drawbacks to selling. After all, if your patent protects a new or unproven idea, the patent buyer probably wont want to spend a ton of money for it. It would simply be too big a gamble. Then again, what if it becomes a huge hit? More concretely, what if you sell your patent for $10,000 and it generates $10,000,000 in profits for the new owner? This is a very real possibility that you must reckon with before selling. For many people, this possibility is enough to scare them (irrationally) into rejecting perfectly good offers and holding onto their patent indefinitely.

However, you can and should make this decision intelligently. Think long and hard about your idea. Is it so innovative, so groundbreaking, so over-the-top revolutionary that it is going to redefine an industry? Or are there similar products out there for sale already? In the former case, you might want to hold on to your idea or hold out for a higher sum. In the latter case, however, you should reason that you might make money or you might not. You should take the sure thing: ie, sell the patent if someone makes an offer.

(It is worth noting a potentially lucrative alternative to selling: licensing. Licensing your patent grants exploitation rights to a licensee in exchange for royalties and performance options to ensure the licensee acts to make the patent a success for you. For a more in-depth explanation of patent licensing, see our article on the subject.)

How do you actually go about selling your patent? Several options exist, and you should choose the one that best matches your strengths and resources.

One way to sell your patent is through direct contact. Very simply, you would make a list of manufacturers and potential users of your product. A good place to start is the Thomas Register, which is available in most public libraries and on the Internet. It has contact information for thousands of companies across hundreds of sectors. The Yellow Pages are another solid resources in this regard.

When you do make contact with a firm, you want to present yourself as a Product Developer, not a mere inventor. This exudes an air of professionalism that established companies prefer. Then, request a face-to-face meeting with a Sales Manager or Product Manager within the company. Now, a word of caution is in order. You only want to schedule such a meeting if and when you have secured a patent for your idea. Otherwise, you have to ask the company to sign Non-Disclosure Agreements which they are unlikely to sign for standard business reasons. Therefore, a patent is your best (and often, only) means of selling your patent through direct contact methods.

Another option is to attend trade or invention shows. Here, you will encounter companies or people interested in your product and potentially buying it. Generally, it helps to have secured a patent here as well, if only because it would be easy for an interested party to run with your idea him/herself.

If neither of these options suit you, you can also advertise in trade journals or inventors’ magazines to scout out potential buyers for your patent.

In closing, selling your patent is a potentially lucrative way of capitalizing from your invention. If you have secured the patent already, you are in prime position to market it to interested parties and evaluate potential buyers in your quest to profit from your labor.

Eric Corl is the Founder and CEO of IdeaBuyer.com, 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. You can email him at EricCorl@IdeaBuyer.com. You can visit the site by clicking here > Patents for Sale.