How to License a Tool Product Invention Idea

How to License a Tool Product Invention Idea

Date: May 14, 2008

Licensing a tool product invention idea starts with first preparing and protecting your tool invention.

10 Steps to Licensing a Tool Invention:

Tool Manufacturers1. Initial Market Research
2. Technical Drawings & Costing
3. Physical or Virtual Prototype
4. Patent Preparation and Filing
5. Identifying Potential Licensees
6. Preparing Presentation Materials
7. Setting up meetings
8. Meetings
9. Negotiations
10. Transaction

1. Initial Market Research

Initial market research is an important step in licensing a tool product invention idea. It is like evaluating the land where you are going to build you a house on. Yes, you can simply choose to plop down on a piece of land you see or seems like a good deal and decide to build there. Or, you can research the best areas and type of land to build on long term. There are several items you want to research here.

Market Research Items:

– Is there a patent on a similar patent already? If so, it isn’t entirely limiting. However, you need to be aware of all similar IP filed. These will need to be referenced in your patent filing.
– What are the current products available that are already solving the problem? Why is your solution better?
– What are the current costs of these alternative products?
– Why would customers buy your product instead of the current solution?

Answering these questions will help you develop a strong foundation for the value of your invention or uncover that it may not be as great of an idea as you originally thought.

2. Technical Drawings & Costing

Technical drawings are important to ensure that the product can; A. Be made with current technology, and B. Be made at a reasonable cost with a reasonable profit margin. They will also be essential for production quality prototyping and manufacturing.

There are several critical engineering aspects for a tool invention to consider.
– What material will be used to construct the item? What will it’s strength be?
– What will the estimated life cycle of the tool be? This is critical for industrial tools but it is also important to ensure quality and reliability for consumers.

3. Production Quality Prototype or 3D Virtual Prototype

A production quality prototype is the best route to go. People react much better to a tool invention when they are able to physically touch, see, feel, and use it. However, 3D virtual prototypes can be a very useful and more budget friendly way to ‘prototype’ your invention while allowing to show what the ‘end result’ should look like. You can take a 3D virtual prototype a step further by having an animation created to demonstrate the function or use of the invention.

4. Patent Preparation and Filing

Patent preparation and filing of your invention idea is critical to recognizing value from your new tool idea. If you skip this step, you will severely limit the value and protection for your intellectual property. Make sure you find a patent attorney that has experience preparing and filing patents for tool inventions.

5. Identifying Potential Licensees

The fifth step is identifying potential licensees of your tool idea. You will want to consider both major and minor tool product manufacturers in this step. Do not simply limit yourself to large manufacturers like Craftsman, Black & Decker, Bosh, and Dewalt. There are many smaller and mid market players that may be more willing to review your new tool invention and it may end up being a more lucrative deal.

6. Preparing Presentation Materials & Business Case

Being able to show these tool companies why investing in your tool product instead of other opportunities will set you far apart from the amateur inventor. With the proper presentation materials in place, you will be able to get more meetings, be taken more seriously, and end up having a better opportunity to get a lucrative licensing deal.

Licensing Items to Consider:

– A major manufacturer will likely require an exclusive license. Are you OK with this?
– What royalty rate will you expect in exchange for providing an exclusive license?
– Are you open to selling your patent outright?
– Are you expecting an upfront some in addition to a royalty rate?

7.  Setting up meetings with Potential Licensees.

We have a great article discussing how to talk to anyone and get into the doors of major companies. You can find that article here; How to Talk to Anyone.

8. Meetings

Giving a good sales presentation is paramount in your quest to license your tool invention. Learn how to craft a good sales pitch and prepare your material in the proper manner. Learn what companies what to see by reading our seven part series on the subject.

9. Negotiations

Negotiating can be the make or break of any deal. Even small contract details can have a huge impact on how you end up making out on the deal. It can also lead to confrontation and kill deals if you aren’t careful. You can read our article on patent licensing negotations here; Patent Licensing Negotations

10. Licensing Transaction

The last step comes down to actually getting the transaction done! You will want to have an attorney with experience in patent licensing review all documents. If you get to this step, congratulations. The next milestone of course is seeing your product on store shelves and collecting those royalty checks!

4 Responses to “How to License a Tool Product Invention Idea”

  1. Michael McCullough says:

    I have developed a hand tool accessory for square drive system called the VRE, Variable-Length Ratchet/Socket Extension with an adjustable length feature that extends linearly and is available in three model versions. Several finished samples are complete and market ready with some being used by various individuals in different trades.
    I would like to sell the patent or seek a licensing agreement with tool manufacturers interested in this product. The market is wide open with focus on users working within confined, space-restricting areas of mechanical fabrication and repair.
    Please see the VRE on IdeaBuyer.com
    M.McCullough

  2. shybyme says:

    I design a new hand tool it is only on paper. How do I get a manufacturer companies to build a prototype of the design.

  3. Glenford seeking an licensing deal for my multi tool wrench it’s a very unique hand tool that could bring useful satisfaction to people who have to use multiable tool’s in their day to day projects the multi wrench consis several tools that are use a level knife screwdriver adjustable wrench magnet it is patent I have a prototype an animation video and also a cod drawing am open to changes thanks.

  4. Nick Semitka says:

    I am the inventor of a new concept entitled “ChiZall Multi-Purpose Tool”. My invention possesses a Utility patent with the United States Patent and Trademark Office. Patent #11,787,033.
    I have invented a reciprocating tool that not only brakes-up packed materials, chisels and scrapes, it also digs holes, and provides multiple interchangeable attachments that will make all kinds of DIY projects around the house much easier, but more importantly less strenuous.
    Applications
    Commercial: Removing concrete and plaster from floors on a construction site, lifting floor tiles, drywall sanding, scraping paint and more.

    Home & Garden: Snow chisel / ice breaker, hole digger, pruner, trimmer and more.

    Industrial: Removing product build-up from industrial process and mixing equipment.

    Marine: Removing scale from boat hulls and pontoons.

    I am seeking a partnership, sale, or licensing agreement. If you are potentially interested in the ChiZall Multi-Purpose Tool concept, I would appreciate the opportunity to meet with you to discuss my invention in further detail.
    What Problems Does It Solve?

    The unique features of ChiZall – Multi-Purpose Tool will provide the following benefits for consumers worldwide.

    • Portable tool that will speed-up a multitude of projects with minimal effort
    • Battery operated and rechargeable
    • Makes home and garden projects easier on the body – especially back and arms
    • Perfect for elderly and / or physically challenged persons
    ChiZall – Multi-Purpose Tool stands alone – there is nothing like it on the market today.
    The ChiZall– Multi-Purpose Tool is appealing to everyone who needs a quality tool for everyday DIY projects. Today’s society is always seeking new and easier ways to use advanced technology to make necessary tasks easier to accomplish. This is precisely why this product is being developed.
    I appreciate your time and consideration and hope that my invention aligns with your needs. Please do not hesitate to contact me if you need any additional information or would like to discuss further.

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