New products and inventions seem to come out every day; suddenly there’s a new device, gadget or tool that no one can live without. People often ask whether their undeveloped idea could bring them riches, and even watch others pursue that dream on reality shows. With the promise of riches and fame, it’s a wonder that everyone hasn’t gotten into the inventor’s market. The average person comes up with hundreds of ideas every day and at least one would be a winner, if they knew what to do with their ideas. Doing an internet search often proves time consuming and most ideas are forgotten until someone else thinks of it and takes action. The biggest problem that inventors face is getting the item to market. For a new inventor, this problem may seem insurmountable. Here are some basic guidelines for inventors to follow, in order to profit from a great idea.
Licensing a patent is one way to profit from an idea without the added expense of manufacturing, distribution, and advertising that would break the bank for most inventors. Before a patent can be licensed, there is a lot of work to do.
The first step to licensing a patent is obtaining a patent from the US Patent Office. In order to do that some inventors turn to a professional because of the time and steps involved. The lengthiest part of the patent process is the patent research, so it’s a good idea to research the idea before beginning the process. Should there already be an invention, that isn’t the end. The wheel chair, for instance, has already been patented, but there are many design patents that improve on the original idea. If the research shows that a patent is in place, decide whether there is a better, more efficient design and apply for a design patent.
While awaiting the patent, start researching companies that may be interested in the new idea. In the case of a new wheel chair, researching medical supply manufacturers is a good start. Perhaps the invention is a new kind of wheel, or an added safety feature. If that is the case, check manufacturers of safety restraints and wheels. The same wheels may work from other devices such as a child’s stroller or a wagon or push cart. If it’s a really great part that changes the original design, patent it separately. Individual parts such as wheels, springs, rivets and even computer chips, receive separate patents. Parts alone can become a lucrative part of the patent licensing business.
The next step is to make a list of at least twenty manufacturers who may be interested. Draw up a professional letter describing the new product or part and the features it will provide. Make the letter as persuasive as possible, while keeping it professional. Plan a marketing strategy that includes a web site and brochure if possible. Photographs and product details give the invention a higher marketability. Manufacturers who have received a marketing inquiry and become interested may go to the website and download the brochure to present the idea to their board of directors. Be sure to disclose the type of patent applied for, whether it is a design patent, or a provisional patent. This information may heavily influence the patent licensing agreement.
If the funds are not available to patent the idea, a provisional patent covers the inventor for a year at which point a regular patent may be applied for. It may be advisable to get a loan to cover the cost of the patent in order to reap a higher return. As a last resort, if a manufacturer is interested in licensing, an agreement may be struck where they pay for the patent in exchange for the licensing, and the inventor receives a percentage of the profits from sales. The man who reinvents the wheel could make a tidy income off of that percentage. At this point in the process it is recommended that the inventor has an attorney to negotiate the contract. Legal jargon can get very confusing and in order to protect the owner of the patent, it’s important that all terms are understood.
During the negotiation process, be sure to direct questions to the manufacturer through the attorney and get everything in writing before signing. Word of mouth does not hold up in a court of law, especially with patent law. Remember that there is a difference between licensing the patent and selling it outright. Patent licensing brings residual income while the sale of a patent offers only a single profit.
Once the process is done, be sure to share the new product with friends and family. The more the word gets out about the new product, the higher the return. Remember to keep in touch with the attorney, should any problems arise. In negotiation there are often stipulations that the manufacturer must abide by, such as a number sold per year. Ensure that both owner and license holder carry their part of the bargain in order to receive the ongoing payments.