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Invention: Questions / Answers about Licensing Your Invention

Questions / Answers about Licensing Your Invention

Where do I start?

I think a provisional patent may be a good place to start.  You can do this yourself for under a couple hundred dollars.

A provisional patent won’t protect you but it will establish you as the inventor and create a timeline.

You’ll have a year to apply for a regular patent.

My actual recommendation:

Apply for a provisional patent and don’t use your main claims.

Reason: if you don’t apply for a real patent (a traditional Utility or Design Patent) within a year, the Patent Office will invalid your patent as prior art.

No one will see your claims in your provisional patent as the process is a closed system and private from public view.

You can always file again and introduce your real claims as additional elements.

The advantages of filing this are 1. establishes a date of invention, and two gives you the right to say your invention is patent pending.

Unfortunately, a provisional patent won’t protect you.

Unfortunately, a regular patent won’t protect you either – it only gives you the right to protect yourself.

You’d have to sue someone if they violate your “claims” as shown in your patent.

Be aware someone violating your patent may not care about being sued.

Additionally, I’ve never seen a sheet of paper stop a crook.

In one sense the advantage of a provisional patent or actually applying for a traditional patent (Figure $5,000 to $10,000) is the same: you can now say your product has a patent pending status.

Both processes, the provisional patent and a traditional patent application, are shrouded in secrecy – so firms WILL NOT be able to check the validity if your patent application (to see how likely you are to receive approval of your patent) or to see any of your claims.  A great reason to follow this route.

Marketing your product —

The cost and difficulty to market your product depends on the product, the industries you are marketing to, and the novelty and design of your invention.

And of course, your budget.

The same goes for licensing.

Here’s what I’d do:

If you are going for a licensing deal and have a target company in mind, get the name of the President of the firm.

Write him (or her) a letter saying you are a product developer and have a product that will offer these benefits:  ___________, _______________, _______________.

Important: Don’t actually say what the product is, just the benefits.

This is an introductory letter and you are just seeking information.

Ask what his recommendations are for submitting a new product to his company, and how they would like you to go about this.

Let him (or her) tell you what he wants.  Then, actually feel free to follow – or not follow – his advice.

This first letter is just a test!

The test is to see how receptive they are to new ideas.

If they outline a good path, by all means take it.

If not, at least you have the name of the President of the firm and you know how you can reach him.

If you get no response, write a second letter.

Remember, it’s direct mail, and direct mail is a game of numbers: and percentages of response.

Make your second letter similar to your first letter:

“A few weeks ago I sent you a letter about a product I have developed. It offers benefit, benefit benefit…”

If he responds to either letter and you don’t like the path he outlines – like asking you to send your invention to their “New Product Committee,” I would say in a new letter “Hey, thanks for writing me! I prefer to submit my product directly to you, as the President of the firm.  My innovation does this, this and this…”

Feel free to embellish the benefits of what your product does without much detail or divulging your invention, but make it sound compelling.

Then ask if they have a non-disclosure form they use, of if he would agree to sign one you have taken out of a marketing book you read.

A non-disclosure form can be found in my book, “How To Market a Product for Under $500!”  I’ve included this so my inventor friends can make this exact statement. It sounds so official when you say you “took the form out of a book.” Nice, huh?

Again, keep in mind I’ve never seen a sheet of paper stop a crook.

Be careful:  While there may be many people who will tell you to send your idea to them in the company – and who doesn’t like to see new ideas – very few will be able to act positively on it.

If you send your innovation to someone down a few rungs down on the company list, he or she may not want to risk their job by moving your invention forward.

(Once they recommend it, their judgement may be questioned – and possibly their job is on the line.)

Most people will actually have no authority to accept a new product for design, manufacturing and marketing. Still, everyone will want to see your new invention!

IMPORTANT: Once you send your invention to someone that says “No” it will be difficult to go above their head on the path to “Yes!”

Roadblock.

You might have created an enemy within the ranks if you try to go over their head after they have said no.

Before disclosing your product to anyone, ask if they have ever used a product from an outside developer.

If they say no, your chances just took a turn for the worse.  Much worse.

Not impossible, but this is a huge hurdle.

What are YOUR chances, if they’ve never accepted a product from an outside product developer. Slim to none.

But then…

Suppose everything goes right?  And they have accepted products from outside developers.

Ask for their standard contract with product developers.

Then, check it out – and feel free NOT to use it.

If it stinks – and I’ve seen a lot of really stinky contracts out there – ask if they will sign your form – that you got from a book.

I like saying you got these forms from a book as that implies fairness.

If you ask if they’ll sign your form that you just wrote, I’m pretty sure they’ll balk at that request.

If they say yes to the form from a book I’d then copy the contract from Harvey Reese’s book, “How To License Your Million Dollar Idea!” modify it to what is applicable to your own case, and send it.

Harvey is very smart and his contract is brilliant: clear to read and he’s said it’s proven bulletproof in court.

I also recommend you read his book – it’s awesome.

Submitting your idea:

I speak with a lot of people who have one company in mind to submit their idea.

Keep in mind there are more firms that do the same thing, market the same set of products to the same industries.

Here are my favorite two places where to find them:

You can find them all in 1.  the trade magazines that serve your industry.

Find the trade magazines in Bacon’s Magazine Directory in larger libraries. Or Oxbridge Communications Directory of Periodicals.

These amazing and easy to use reference tools are in most large libraries at the reference desk.

Learn how to get FREE subscriptions to each of the trade magazines in my book “How To Market A Product for Under $500!” I’ve written an easy and foolproof plan in there, so I’m not going to repeat it here.

If you are looking for firms that are in the same markets as you are looking for, or companies you’d like to pitch a licensing deal to, find them in  2.  The Thomas Register of Manufacturers and Distributors.

This huge 30-book reference set is found at all large libraries.

Their online version sucks, so go to a library and spend some time there – if will be worth it.

Bring plenty of change for the copy machine, so you can copy all the pages of firms, names and addresses you’re going to send licensing letters to.

Reaching potential licensing firms:

When you send anything by mail, it’s a direct mail campaign.

Remember: all direct mail goes by numbers, and percentage of response.

This is the beginning of a marketing campaign for your invention.

It works by traditional mail, and also surprisingly well by email.

The email must be highly personalized to work.

With inventors I have worked with I’ve used this same formula and my clients have received a positive response as high as 15% to our personalized mailings.

For some campaigns the response my clients received is from the top firms in the industry, and directly from the President of those firms.

If you thought this article was helpful, please let me know and if I get enough requests I’ll write the next article in the series: how to handle the second correspondence to you write to the president of the firm.

Hope this is helpful.

Remember to enjoy each step of the inventing process as the trip is more than success of the idea itself.

If your one invention doesn’t generate any interest from anyone from this campaign… hey, you’re an inventor – I’m sure you have other inventions.

Notice you don’t send them an invention at this point, so you don’t even need a working model.  All this is done without a prototype.

You’ll need a working model for the conclusion of this process – when you receive a positive response and the negotiations to license your product start.

Jeffrey Dobkin
President, The American Society of Inventors.

To visit the American Society of Inventors Website, please Click Here

To speak with Jeffrey, please call his office: 610-642-1000 — this phone rings on his desk.