June 18, 2024

Obligate Law

Professional Law Makers

Inventors – Do You Really Need To Patent Your Invention Before Submitting To Companies For Licensing

4 min read
Inventors – Do You Really Need To Patent Your Invention Before Submitting To Companies For Licensing

I have found one thing common among most Inventors. The majority are paying thousands for services they don’t need if they want a company to license their product. The Invention Submission Companies all push get a patent search done, file a provisional patent, file a full patent, do a market analysis report, have CAD drawings done. Why? Because you have to pay for these things and they provide a service doing just that.
Here are some things those sites neglected to tell you.

You can do a patent search yourself using the patent office website or Googles new patent search. The bad thing is if you don’t find anything listed it doesn’t mean a provisional patent hasn’t been filed on it. You just can’t see it. You can spend all of your money on a patent only to find out someone else has a lock on your spot. Also, you will find out that when you license your idea to a company they may want to improve on your idea or modify it in a way that your patent no longer covers the final product. So another patent has to be filed. I call this “What started out a Dog ends up a Cat syndrome” Your original patent money was wasted. I have 6 items on the market and didn’t spend a dime on the patents. The companies licensing the ideas paid for the patents out of their pockets to protect their investment. The patent covers the actual product they are producing.

A provisional patent is cheaper, but starts a 1 year clock. If you don’t get it licensed in that year you HAVE to apply for a full patent or your idea is open to anyone else that will file a patent. Once you start the full patent you are going to spend thousands to get it completed. Do you have the resources to pay for a full patent? ou are also going to wait at least a year or more before the patent is issued.

Full patents are great if you are a large company and can spend hundreds of thousands of dollars to defend your patent. The average person can not afford to go up against a Disney or Mattel sized company to fight off knockoffs. You will lose any profit you made and be in court for years. If you don’t think that is true look at all the knockoffs of patented items on the shelf right now.

A market analysis is a waste of your money unless you are planning to produce and sell the item yourself. If you do one today and you find a company to license your idea they will do their own market analysis and not take your word for it on yours. So, you are paying for something they will do anyway. In the past 5 years I have had only 1 company ask me if I had done a market analysis on that product idea. I asked if they needed me to do one. He said no, they would do their own.
Plus, how long is your market analysis good for? If it has been a year since you had one done and you still haven’t found a company to produce your product is your market analysis still valid? Can you afford to have one done every 6 months or yearly?

You don’t always need CAD drawings or some other technical engineering drawing to get a point across. If you are doing electronic circuitry or something extremely high tech it would probably be advisable. If you are producing a low tech item or board game you don’t have to be as technical. All of my drawings are two dimensional. They look professional, get the point across, are in color and have concise explanations included describing the items function and benefits.

More and more companies are open to looking at outside ideas from Inventors. They see the value of having someone outside the company look at their line and see if they can come up with something that fits. I approach companies using a nondisclosure agreement. Once we each sign the agreement I will submit my idea for review. If they are interested we will discuss royalty terms and licensing.

Since I am not having to wait on a patent I can immediately start approaching companies. This saves me a year or more in waiting to get started. Another point that you may consider is that if you approach a company with your patented idea they will normally offer between 3% and 5% royalty based on the sales. If you approach them with the same idea and it is not patented they will offer you 3% to 5% royalty. So, you are saving the cost of the patent and when you get your first royalty check it is profit, not something you are using to make back the money you spent on the patent.

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