There are plenty of below forthright organizations that allegedly help individuals sell their inventions to industry. In most my years of employed as a patent lawyer, I have got never stumbled upon a single person that ever used one of those organizations to effectively market or sell their invention. However, I actually have met several who successfully marketed their inventions themselves.
Prior to taking any steps to find more, you need to take a few preliminary steps.
Patent Application – Don’t publicly disclose your invention until following a patent application is filed. Publically disclosing the invention before filing a patent application can potentially ruin the chances of ever being granted a real patent. The truth is, many Companies will never even talk with you until you have filed a patent application.
Cook a Formal Information Package – You need to prepare an informative and concise information package describing you, your invention and the potential advertise your invention reaches. The package should include color photographs in the invention, as well as a one page executive summary.
Prototype – It is a lot easier to offer something if prospective buyers are able to see, touch and feel the product. Developing a working prototype is usually a key part in selling your invention. Needless to say, some merchandise is hard to prototype, whereby a non-working mock-up may have to do. In almost any event, produce the most professional prototype or mock-up it is possible to.
Obtain Financing – Building prototypes and filing patent applications require funds. Discovering that initial set up funding is usually difficult; however, the two main tried and tested methods, namely partnerships and incorporations. A signed partnership agreement is one way for a few people to pool their financial resources in to a project. If several investors are involved, then an incorporated company is an improved method. Essentially, the organization takes ownership in the invention and also the investors contribute money for the company in return for shares. The quantity and price in the shares may be tailored to match the actual needs from the project.
Since we certainly have managed a number of the preliminary issues, allow us to check out the mechanics of selling your invention to a company. The actual steps during this process are listed below:
1. Compiling a long list of Potential Buyers – Choosing a company that may be prepared to buy the invention is considered the most challenging area of the process. It begins by generating a long list of companies that could be enthusiastic about the their website. Use a business directory to generate that list. Business directories list companies through the products they manufacture (or services they provide) and can include basic information about these organizations including their address, phone and fax number, along with the name of the president (CEO or owner). Suitable business directories may be in the business section of the local reference library.
2. Contacting Possible Buyers – Your list of potential buyers could include many companies. You only call up each company on the list and request them once they would be interested in receiving a solicitation for the new invention. Then get the contact details about who inside the company to send out your data to.
3. Presenting the Invention to Prospects – After you have thinned from the list, your following step would be to submit your information to each of the companies on the list. This can involve calling the people identified to become the “contact” for first time product ideas and letting them know that you are currently sending them an information package concerning your product. Your package will include a job cover letter along with a one page synopsis of the product (together with a picture). The data should be clear, concise plus it must appear as professional as is possible. Don’t attempt to overwhelm the recipient – you would like to impress them, not burden them.
4. Follow-up – Tend not to expect the prospect to visit a quick decision concerning the invention. It might take a prospect many months (a year or more) to create up his/her mind over a project. You have to be patient. You should periodically followup together with the company but tend not to “pester” the prospect. Remember, the folks considering your invention are most likely quite busy with a number of other projects – annoying them may do little to speed the project up and may cause them to drop the project altogether.
5. Negotiations – If you discover a firm that may be considering obtaining the project, then be ready to negotiate the terms of the sale. The important thing here is usually to be reasonable. From my experience, nothing kills off a possible licencing deal faster than an unreasonable inventor. Realistically, by far the most you are likely to get is a good return on your investment. Asking for a smaller signing fee plus a modest royalty is much more likely to produce a signed agreement than holding out for a big payoff.
6. Royalty Amount – I am usually asked the question “just how much can I sell Website for”. I don’t know the answer; however, here are a few rules that can help you figure out a 1nventhelp royalty rate. To begin with, make an effort to negotiate a royalty that is divided directly into two parts, an initial signing payment as well as an annual royalty payment. The initial payment should cover the majority of your costs from the project. The annual royalties should represent an amount which happens to be sufficient to represent a great return in your investment without being a burden in the manufacturer. The normal “guideline” is to request for a small percentage (1% to 5%) of your net sales from the product. Additionally it is possible, and in many cases advisable, to repair the annual royalty payment with an easily calculated amount (e.g. $1.00 per unit sold).