How To Make Money With Inventions – If you’re an innovator who loves the process of developing new product ideas but isn’t as excited about the process of manufacturing and marketing that product, then one of the best ways to monetize your invention is to license your idea to a company who will take over the responsibility of getting that product to market. Licensing means you give another company (or companies) the right to sell your invention in exchange for them paying you a royalty for each product sold.
A license deal can be created in a number of different ways. There is an exclusive license that gives only one company the rights to produce and sell your invention. There is an exclusive license, which means that you only grant one company the right to produce and sell your invention, but you retain the right to also produce the invention yourself. And there’s a non-exclusive license, which means any number of companies get the rights to produce and sell your invention.
How To Make Money With Inventions
Royalties are usually based on product sales and are paid to you either monthly or quarterly. You may be able to negotiate a higher royalty or perhaps even an advance on future sales in exchange for exclusive rights to your idea. However, if your idea has application in different vertical markets, it may be better to grant non-exclusive licenses to several companies in different industries or with different customer focuses.
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One pitfall is if your licensee doesn’t do a good job marketing your product and sales are sluggish, or if they decide not to produce or market the product after all, you won’t see any royalty payments. You might consider including a time limit in the license terms so that after a certain period, if things don’t go as planned, you have the right to terminate the agreement and take back the rights to the product.
Overall, licensing agreements can be a win-win proposition for both you as the licensor and your potential licensee. You get paid to come up with a great idea and they get paid to offer a great new product. If you want to know more about how you can monetize your inventions, email us at [email protected]
Posted in Patents, Royalties, Innovation, Inventions / Tagged Patents, Innovation, Inventions, Royalties / Posted 5 years ago by Kemaal EsmailCopyright © 2023 Media, Inc. All rights reserved. ® and its related marks are registered trademarks of Media Inc.
Have a great idea for an invention but not sure what to do with it? Follow these steps to turn your idea into a marketable product.
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The light bulb above your head shines so brightly that it threatens to blind everyone around you. But what to do with your great invention ideas? Before you start arguing about your invention to the wrong person or run to the first company that offers to buy it, you need to do one thing: protect it.
Whether you want to produce and market your invention yourself or license it to another company, the only way to monetize your invention and guarantee that no one will steal your idea is to file a patent with the U.S. Patent and Trademark Office. This can be a daunting process, so we spoke to Andy Gibbs, the author of Essentials of Patents to help you break it down into five easy steps.
Just having an “idea” is useless – you need to have proof of when you came up with the invention ideas. Write down everything you can think of that relates to your invention, from what it is and how it works to how you will make and market it. This is the first step to patenting your idea and preventing it from being stolen. You’ve probably heard of the “poor man’s patent” – writing down your idea and sending it to yourself in a sealed envelope so you have dated proof of your invention’s conception. This is unreliable and unlikely to hold up in court.
Write your idea down in an inventor’s journal and have it signed by a witness. This journal will be your bible throughout the patent process. An inventor’s journal may be a bound notebook whose pages are numbered consecutively and cannot be removed or reinserted. You can find specially designed inventor journals at bookstores like Nolo Pressor the Book Factory, or you can save money and buy a generic notebook. Just make sure it meets the requirements above.
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You need to examine your idea from a legal and business point of view. Before filing a patent, there are two main steps you should take.
Just because you haven’t seen your invention doesn’t mean it doesn’t already exist. Before hiring a patent attorney or attorney, do a free rudimentary search at www.uspto.govto to make sure no one else has patented your idea. You should also complete a non-patent “prior art” search. If you find any kind of artwork or design related to your idea, you cannot patent it – regardless of whether a previous patent has been filed.
Sure, your brother thinks your idea for a new lawn sprinkler is a good idea, but that doesn’t mean your neighbor would buy one. More than 95 percent of all patents never make money for the inventor. Before you invest too much time and money in patenting your invention, do some preliminary research on your target market. Is this something people will actually buy? Once you know there is a market, make sure your product can be manufactured and distributed at a low enough cost that your selling price is reasonable. You can determine these costs by comparing the costs of similar products currently on the market. This will also help you size up your competition – which you will have, no matter how unique you think your invention is.
A prototype is a model of your invention that puts everything you’ve written in your inventor’s journal into practice. This will show the design of your invention when you present it to potential lenders and licensees. Do not file a patent before you have made a prototype. You will almost always discover a flaw in your original design or think of a new feature you would like to add. If you patent your idea before working out these kinks, it will be too late to include them in the patent and you risk losing the patent rights for the new design to someone else.
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1. Start with a drawing. Before starting the prototyping phase, sketch out all your ideas in your inventor’s journal.
2. Create a concept model from any material that allows you to create a 3D model of your design.
3. When you are satisfied with the model, create a fully functional model of your idea. There are many books and kits that can help you create prototypes. If your invention is something that will cost a lot of money or is prohibitive to prototype, such as an oil refinery process or a new pharmaceutical drug, consider using a computer-animated virtual prototype.
Now that you’ve worked out all the kinks in your design, it’s finally time to file a patent. There are two main patents you have to choose between: a utility patent (for new processes or machines) or a design patent (for making new, non-obvious ornamental designs). You can write the patent and fill out the application yourself, but don’t file it yourself until you’ve had a skilled patent examiner review it first. If the invention is really valuable, someone will infringe on it. If you don’t have a strong patent written by a patent attorney or attorney, you’ll be pulling your hair out later when a competitor finds a loophole that allows them to copy your idea. It is best to get legal help now to avoid legal problems in the future.
How Do I Make Money From My Invention?
1. Do your homework. Keep your inventor’s journal, prototype and notes with you. This will save them time and money. This will also help them work with you.
3. Ask them what their technical background is. If your invention is electronic, find a patent engineer who is also an electrician.
4. Discuss fees. Keep the focus on smaller patent companies. They are cheaper and will work more closely with you. Agree on the estimated total cost before hiring your patent specialist.
Start with a business plan. How will you make money? Where will you manufacture the product? How are you going to sell it? Now is a good time to decide whether to manufacture and sell the product yourself, or license it for sale through another company. When you license your product, you probably only get two to five percent in royalty fees. This often scares off inventors who feel they deserve more. But consider the upside: you won’t have the financial burden associated with maintaining a business. This can lead to you making more money in the long run.
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It is also important to remember that
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