If you want to license your invention for royalty payments, you have to deliver more than a “me too” product. Prospective companies will demand that your product exceed their standard profit goals in order to pay royalties, which represent increased expense.
Many inventors believe the way to get a company interested in their inventions is to write a letter – and then hope they receive an invitation to begin negotiations. This seldom happens.
Your licensing quest should begin by phoning and asking for your prospect’s invention submission guidelines. Know that many times unpatented inventions, or inventions without at least a patent pending, will not be accepted.
For patented (or patent pending) inventions, you’ll have to agree to give up all your rights except those that are, or will be, granted by your patent. You’ll have to acknowledge, by signature, that you agree to this condition or they won’t review your product.
Study guidelines carefully to determine whether the company advises on how soon it will give you an answer. If you’re lucky, the guidelines will come with a signed letter. Companies often discourage direct communication with inventors. So, without a commitment on response timing, or the name of a person with whom you can follow up, your proposal may be destined for the corporate “black hole.”
If your targeted company appears especially well-matched to your invention, you may have to accept this anonymous way of dealing. But if the company is just one of many that all rank about the same as prospects, place it low on your priority list.
If the company has no formal guidelines, ask for the name of the person who will handle an invention submission. Talk directly with this person before sending off your proposal or your prototype.
The odds are not in your favor.
You may need to contact 20 or more companies before you connect. So, when you receive your first rejection, don’t sulk. Contact another company on your list right away. You should consider sending out at least one proposal every month whether you hear from your prospects or not. If you connect with more than one prospect, so much the better.
How to find prospective companies
The Thomas Register of American Manufacturers is a place to start. It’s on the Internet and may be in your library. Another way is to check is the North American Industry Classification, or NAICS, reference book at your library.
NAICS gives code numbers for all the products made in North America. Look up your “product” code and use this for researching through several other library references, such as Dun & Bradstreet, Standard and Poors, etc. Check with your reference librarian on how to do this. This will lead you to profiles of prospective companies, along with names of their key executives.
Also review companies that produce complementary products. If you’ve invented a better mousetrap, the mousetrap companies may not be interested. After all, what they’re selling now is doing well, why compete with themselves? Another mousetrap might also sell well, but would it increase their sales and profits? A rodent poison producer, on the other hand, might welcome an addition to its product line.
Don’t send your only prototype to a company. Either have enough copies of your prototype made so that you can afford to lose one or have tied it up for a few months while the company contemplates its licensing. Or, if your invention has moving parts that are important to its proper demonstration, make a video and duplicate it. It’s important to send a DVD rather than a VCR tape. Every executive these days has a computer that will show the DVD, but VCRs are rapidly going the way of the 8-track tape player.
If your invention has moving parts, but you haven’t yet made a working prototype, consider making a virtual prototype. A virtual prototype is an animated video that is made by a graphic studio. Each second of animation is very expensive, so plan your demonstration carefully. Once you have the master, duplicating DVDs is inexpensive.
For more information on this and related topics please see:
- When should you do a Patent Search? Aug 01 2015
- Design Patents 101 – Protecting Appearance Not Function Jul 25 2015
- The Top 5 Mistakes Inventors make with their Invention Jul 18 2015
- Patent Searching 101: A Patent Search Tutorial Jul 11 2015
- Freedom to Operate: Knowing if you will likely infringe a patent Jun 27 2015
- Patent Drawings and Invention Illustrations, What do you Need? May 30 2015
- The Key to Drafting an Excellent Patent – Alternatives May 23 2015
- Patent Strategy: Building a patent portfolio with meaningful rights May 09 2015
- Patent Strategy: Laying the Foundation for Business Success May 02 2015
- When Should a Do It Yourself Inventor Seek Patent Assistance? Apr 25 2015
- Patent Cost: Understanding Patent Attorney Fees Apr 18 2015
- US Patent Office Fees Apr 11 2015
- The Cost of Obtaining a Patent in the US Apr 04 2015
- An Inventor’s Guide to Being Taken Seriously by Patent Attorneys Mar 28 2015
- Enablement – Did the public receive all it contracted to receive? Mar 07 2015
- Provisional patents are like chicken soup, good for everybody Feb 24 2015
- Plausibly estimating the market for your invention Feb 14 2015
- The Business Responsible Approach to Patents and Inventing Feb 07 2015
- A beginner’s guide to patents and the patent process Jan 31 2015
- Every invention starts with an idea Jan 24 2015
- Patent Drafting: Identifying the Patentable Feature Jan 17 2015
- Patent Drafting: Thinking outside the box leads to the best patent Jan 03 2015
- Patent Pro Bono Program and Micro Entity Status Dec 27 2014
- How to Know When You’re Ready to File a Nonprovisional Patent Application Nov 08 2014
- Are you Ready to File a Provisional Patent Application? Oct 25 2014
- The Importance of Keeping an Expansive View of the Invention Oct 18 2014
- Why Inventors Should Not Rely On Their Own Search Oct 11 2014
- Patent Drafting: Ambiguity and Assumptions are the Enemy Sep 27 2014
- A Conversation with New UIA Executive Director John Calvert Sep 13 2014
- Patent Drafting: Appropriately Disclosing Your Invention Aug 30 2014
- Getting Your Invention to Market: Licensing vs. Manufacturing Aug 16 2014
- How to Describe an Invention in a Patent Application Aug 09 2014
- Patent Drawings 101: The Way to Better Patent Applications Aug 02 2014
- How Long Does a Patent Last? Jul 26 2014
- What is Intellectual Property? Jul 19 2014
- Understanding Patent Claims Jul 12 2014
- Different Types of U.S. Patent Applications Jul 05 2014
- Utility Patent Applications – Content and Substance Jun 28 2014
- The Patent Process on a Tight But Realistic Budget Jun 14 2014
- The Risk of Not Immediately Filing a Patent Application Jun 07 2014
- Patent Drafting: Top 5 Critical Things to Remember May 31 2014
- Obtaining Exclusive Rights for Your Invention in the United States May 24 2014
- Patent Drafting: Not as Easy as You Think May 17 2014
- Completely Describe Your Invention in a Patent Application May 10 2014
- The Successful Inventor: Patenting Improvements May 03 2014
- The Trade Secret Value Proposition: The Secrecy Requirement Apr 19 2014
- Q & A: File a Patent Application Before Market Evaluation? Apr 05 2014
- An Overview of the U.S. Patent Process Mar 15 2014
- Design Patent Infringement: How to decide if you should sue Mar 01 2014
- Protecting Ideas: Can Ideas Be Protected or Patented? Feb 15 2014