“Where Do I begin”
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As inventors ourselves we understand the confusion and sometimes the fear of beginning the process of being an inventor and or an entrepreneur. We would like to lay out a map for new inventors to make the path clearer.
We are not giving legal advice here…these are established methods that are public knowledge
You have an idea and you think it will be successful. There are many people with many invention ideas and you need to find out if your idea is really yours or has it been thought of before and most importantly has it already been patented.
The first three questions to ask yourself: Is it patentable? Can it be manufactured? Is it marketable?
If you can answer the first three questions as YES…..have any company you talk to sign a confidentiality agreement before you reveal any details about any of your invention ideas……then you begin with a patent search.
A do it yourself patent search is not recommended as you are not a professional and you have no experience in performing a patent search. A good patent search can cost you $3000 with an expensive patent firm. A good price is about $500 to $1000 to do a full advanced patent search with a report and the findings printed in a document form that you can keep for your records. Patent searches that cost less than the $500 should be suspect to the amount of time one takes and whether it will yield all of the findings it should. Be sure and talk to a few companies and ask questions like how long it take to do the search, do you provide a search report and do you give me all the findings.
A patent search must be done in order to establish what other inventions are similar in nature or are exactly like yours. There are some invention ideas that are simply not patentable such as a jewelry product. If it has a unique design then it could be but if it is something simple that you put together from other pieces it will not be patentable and you need to realize that and not be swayed from some of the less than honest invention companies. There are numerous that will take your money and know full well that it is a waste of time and money. Find a company you feel comfortable with and that you feel is being honest with you. Take your time and think about it.
A patent search is also necessary to establish a foundation for all of the patent work. Eventually the patent office examiner will do their own search and they often find patents that are similar in nature. The search helps establish the claims portion of the patent application which the main body of the application that has the most strength in the patent itself. Once the patent search is finished you then establish what kind of patent you need.
Types of Patents:
There are three types of patents that are the most common:
A provisional application – a design patent application – a utility patent application.
The Provisional application is not an actual patent however for the next 12 months as a technical issue you are in a patent pending status however you cannot be granted a patent from the provisional so also as a technical issue you are not in patent pending status until the non-provisional utility patent is filed. The provisional application will establish a time line from the date you file the provisional and will last for 12 months then it will expire. Prior to the expiration date you must file a non-provisional utility patent to connect to the provisional time line. This is the only patent that the provisional can be connected to so a design patent will not be applicable.
A design patent application is an application that has to do with the ornamental appearance of the invention such as the specific design of a chair. If the chair is unique to anything else its design can be patented. It can be granted in about 12 to 18 months in many cases and is the simplest and easiest to be granted a patent.
A utility patent application is an application that has to do with the functionality of the invention and how it works. It is a more complicated patent and can take 3 years or longer to be granted a patent. It is the most comprehensive of the three patents however both the design and utility are sometimes recommended to ensure a patent is granted on one or the other.
“Always have a professional assemble your patent work…doing it yourself is not recommended”
Once your patent has been filed you are ready to market your invention
Licensing Your Invention:
One of the first questions you will ask yourself is whether you will want to license the invention to a company for a royalty or if you want to manufacture and market the invention yourself. Licensing your invention means you have to market your invention to manufacturers, wholesalers, and distributors. You will need a professional presentation and a list of those companies to contact. Our recommendation is to do this yourself because no one cares about your invention like you do. It is a time consuming task but it will make the most positive results. Make sure you find a company that has a current clean list and you will do well.
DO NOT go for the claims some companies make that they will introduce your invention to those companies for you when you pay them a fee and possibly want a generous portion of your royalties. Their success rate is about .0001 % and that is a matter of public knowledge. If you pay them a fee there is no incentive for them to actually sell it. If they will do it for a portion of the royalty with no fees attached then you may want to consider their offer if they are a successful and reputable company. Do some searching on the internet and you will find the right company that can help you through the process and again, take your time.
Royalties range from 1% to 4% for TV sales and from 5% to 10% for retail sales. In some cases a cash upfront fee is paid and you will not get any further royalties. In other cases you can get cash and royalties and in most cases you will get a royalty payment every quarter for percentage of the wholesale selling price. Licensing your invention can be successful if you take the time to do the work necessary. Be patient and be persistent…..that is the path to success when seeking a licensing deal with any company.
Manufacturing & Marketing your Invention:
This is one of the areas where people think it is too much to do by yourself. In many cases that is correct. It is a time consuming task to find a manufacturer and set up a company to sell to distributors and retailers. The biggest hurdle is if you have the financial resources to do it yourself. First you will have to set up a corporation or LLC. That is about $350 to $800 depending on what state you want set up in. The next thing is to set up a product liability insurance policy of a minimum of $5 million at about $2000 to $3000 per year or more then set up an EDI (electronic data interchange) software company to handle all the communications and money transactions to and from the retailers or distributors. They are about $300 per month or so.
The next step would be to find a manufacturer that is able to manufacture the product whether it is in the USA or overseas. Many USA companies have connections to overseas and you do business with them in the USA. The next step is to find a factoring company. A factoring company will finance the purchase orders from the retailers for about 5% invoice amount. It is much easier to deal with a factoring company if you are dealing with a USA manufacturer. It is the best thing to do considering all the costs involved with overseas manufacturing and you will be ahead of the game if you work within the USA. Factoring companies do not like working with overseas companies and they will require previous experience with that company.
This seems like a lot of work however if you can find a manufacturer and get purchase orders you can do this with very little money on your end. The factoring company can make that possible if you set everything up first hand. The bottom line is that you will make 20 times more money if you do it yourself. Make your own decision as to whether you can do it yourself or not. Inventors do this very often in fact…it is why some people become millionaires….that is not to say everyone does as you well know…but many do and you could be one of them.
“Be Patient – Be Persistent” – “Work With Your Dreams and Your Dreams Will Work With You.”