|A Hard Core Perspective on The Business of Inventing|
Inventors is pleased to present an article written by Andy Gibbs of the Gibbs Group and Patent Cafe, with many special thanks to Andy.
I continue to be contacted by independent inventors who ask me for help in marketing their invention. Some have asked me to invest in their inventions, and others have asked me to "take over" the marketing and promotion of their patent at "no charge". Although I do not get involved in patent promotion, I do have the opportunity to review the ideas and motivations of many inventors.
It is clear to me why 98% of the issued patents (almost 150,000 every year) are never commercialized. The idea comes before the sale, and inventors want big bucks from a licensee for their idea.
Put another way: you would never consider selling your puppy - unless the price someone was willing to pay was so high, you would get kicked out of the house if you didn't sell the puppy. The buyer would easily see that you were in love with this critter, and would usually not offer you this exorbitant price just to coerce you to sell out your friend.
Too many independent inventors I come across feel the same way about their just-issued patents. They fall in love with their invention and will reluctantly part with it "for the right price". Reality check, inventors! The price you often expect a company to pay for your patent is many times not realistic. Detach yourself from your emotion and consider your patent more like a nameless kennel dog - you know; the kind of purebred you breed in volume to sell at market competitive prices. The more trained the dog is, of course, the more someone is willing to pay.
And when you do decide to raise dogs, you pick the breed most likely to sell in your area.
You are bucking the odds if you really feel that your patent is your "once in a lifetime" opportunity to find fortune. It rarely happens on the first patent, or even the second.
Here is a tip
that I hope may help independent inventors put the invention business in
|THINK OF YOUR PATENT AS A PREMIUM (INTELLECTUAL) PROPERTY. BEFORE YOU BUILD YOUR PROPERTY AND PUT UP BIG MONEY FOR A SECURITY SYSTEM TO PROTECT IT, LEARN WHAT THE CUSTOMERS ARE BUYING. REGARDLESS OF YOUR DESIRE TO BUILD A LOG CABIN IN THE MIDDLE OF A NEW FRENCH-PROVINCIAL SUBDIVISION, YOUR EFFORTS TO CREATE PROPERTY APPRECIATION WILL BE IN VAIN. YOU MUST DO YOUR MARKETING BEFORE, DURING AND AFTER YOU BUILD YOUR PROPERTY (PATENT) IF YOU EXPECT IT TO SELL AT A PREMIUM PRICE. DON'T FALL IN LOVE WITH YOUR PROPERTY. BUILD IT BECAUSE YOU ARE CONVINCED IT WILL SELL - NOT BECAUSE YOU WOULD BUY IT.|
Not until you can detach yourself from the emotion of selling off your patent (or negotiating licensing agreements), you will never become the inventor of customer demanded products you endeavor to be. But once you learn the patent and licensing process, learn what and why companies license from inventors, and license your idea at a reasonably "low" price, you will be able to execute an agreement and quickly move on to another patent.
Don't expect top dollar for an idea anymore than you would expect to get "gun dog" prices for an untrained kennel pup. Any entity licensing a technology or product which is unproven in the field will pay a conservative price - probably a lot lower than you think it is worth. Prove it to yourself, then. Invest every penny in tooling and manufacturing, then offer it for sale in the marketplace. If it sells, you can demand a higher price for the sale or license. If not ... well, you know.
Unfortunately, too many inventors do not have the resources to manufacture and sell their first product - but they "know" it will be a million dollar seller. Sorry Charlie. Put a reasonable price on the patent, make a "deal" happen, then put the money into your next idea. Only after reinvesting in your own ideas can you get closer to proving the commercial value to a buyer by proving the marketability of the product in a competitive marketplace.
Inventing is not like the lottery - it's not your "one-time-shot" at retirement. Inventing is a business that you must grow if you intend to succeed.
If you want
a great little puppy, get it and spend your time cuddling and holding it
- but don't try to sell it for a king's ransom. If you want to be in the
kennel business, create and grow your products for sale to the marketplace.
Sell at the right price so it sells quickly. Nobody likes to buy an old
dog at any price, and nobody really wants to pay top dollar for the cute
little puppy you cherish just because you think it will good in the field.