I want to sell my idea for $ 1 million, I just don’t know how to go about it?

You often hear someone bragged that they have this fantastic idea and they want to sell it for one million bucks! Or perhaps even you yourself have thought of it before. And why not, who would not want to be rich, right. But boasting it is of no use. First of all, having an idea that can be sold is not an easy thing. For one thing, it has to be documented, and preferably even filed as a patent. For another thing, disclosing it could give away the idea and kissing it goodbye. But in actuality, many ideas have been stolen from their rightful owner just because the owner did not know how to go about it. There is a proper and safe way to thread, but most people don’t know about it. It is like when you need to pass motion, then only you go and search for the loo! Or worse, just brag about it and tell the idea to all and sundry, and hope that someone will guide them to that pot of gold. Let us assume that you have indeed a good idea, an idea that can be commercially exploited for monetary gains. So how does one go about it?

There is this thing called intellectual property and there are proper procedures to get that idea of yours properly documented with the patent office. You can get your ideas written out as a document and filed as a patent or if it is a logo or a brand, you can get it registered as a trademark. If you have a book written, or a music score, you can get it properly copyrighted. Works of the mind are automatically deemed copyrighted once it is published, but you should have a proper record of it so that somebody else can’t steal your property. However, going the way of filing for your intellectual property is a long and costly process. Most people would feel uncomfortable to go this way, and if there is an easier way, they would certainly want to hear about it. There is of course an easier way, but if could reduce the value of that asset. Just what is the alternative to filing patents then?

One of the more practical ways is to sell that idea of yours to a company, assuming that you already got a patent grant on it. Here, you can sell the idea outright, or license the idea to a third party for manufacture and sale. Of course you will have to do some research first to identify who would likely need your idea. It all sounds easy right? Unfortunately, it is not, and it is more like looking for the needle in a haystack! For one thing, companies normally will not entertain unsolicited ideas. Just imagine, there are so many departments in a company, so which department door to knock at? There is normally no such a department as ‘ideas department’! If you go to the sales department, you will be disappointed because the sales people will not help you out. They will not want more products to sell! And if you go to the technical department and tell them your idea, they would have too big an ego to accept your outside idea, or worse off, they might just steal your idea and tell their boss that ‘they’ have come out with the idea! So, selling your idea to another company is an uphill task. If your idea is not properly documented, or waiting for grant of patent, the task of selling it off is even more difficult. Well, what then?

Luckily, there is another alternative. You can sell your idea, whether patented or not, through a patent broker or an intellectual property brokerage firm. These companies specialize in seeking buyers for your ideas. They act like middle man, and some of them have become so specialized that if you only give them a raw idea, they can use their professional expertise to size up the idea and sugar coat it so that it appeals to a buyer. They also act professionally to get the best price for you. However, not all brokers can offer you these kinds of services. They have to be technically competent, as well as idea creators themselves, and inventors of some kind. It is often the case that whatever the idea that you are touting; there is always an element of incompleteness somewhere. In order to sell an idea, you would need to know who your competitors out there are. To do a proper job, these professional brokers will need to do a proper research in terms of technicality, and prices. And who else have such qualifications? Yes, it is the patent agents! They know the implication of the ideas as they have been drafting patents all along. They also know who the competitors are out there because they have to research other people’s patents when they do patent drafting. However it is only recently that such professionals have come to the fore and hopefully, they will bring about a renaissance to the field of patent brokering. And if you are wondering whether that half-an-idea of yours can be sold, the answer is ‘YES’. How about half a million? It is better than just dreaming!

Sources: I. Videos Gone Viral, II. The Car Junky, III. The Tech Fanatic

Steps to Conduct a Patent Search

A patent refers to the right granted to an inventor for discovering any new machine, useful process or a manufacturing item. This right gives patent holder the right to prohibit others from using, making, patent sales or selling in US the claimed invention in patent exchange for full disclosure of invention. A patent is a simple way of protecting any discovery or invention.

For conducting a patent search, there are few things that are needed such as US patent applications, patent marketing services, patent file histories, patent referral services, patent software and patent searching service. Here we provide you with some steps that need to be followed for conducting a patent search.

Conduct self-search

• First determine which kind of patent you want to seek. Utility patent covers up functional facets of invention whereas the design patent covers up only the appearance of invention.

• Access patent database online like the ones offered by U.S. PTO (Patent and Trademark Office) and IBM. Find out the most important categories and sub-categories for the invention.

• Read out class descriptions in database for finding out, which are the ones that hold immense significance.

• Review all the patents that are issued within the categories or classes.

• Carry out the keyword searches for the potential invention. Don’t leave any stone unturned.

• Gather your entire patent search results in report.

Hire Professional Experts

• You need to know the options first—a patent attorney or patent agent or lay searcher. Patent agent is the one having a technical training and is licensed by U.S. PTO for preparing the US patent applications. For finding out patent searchers, you can have a look in yellow pages under the category of ‘Patent Searchers’.

• Make use of the searcher’s services proficiently. Do this by offering the searcher with complete and clear description of your discoveries or invention along with drawings.
• Analyze the searcher’s response methodically.

Warnings and Tips

• You mustn’t be concerned about compromising your invention’s trade secrets while corresponding with the professional searcher. The information exchanged is regarded as confidential.

• Most of the search reports include the following: description of the invention or discovery provided by searcher for confirming absolute understanding of the invention and to just indicate what has been searched; list of references and patents discovered at the time of search, brief discussion about found patents and the references etc.

• In order to have a thorough patent search with utmost accuracy you should be well aware about all the practices and techniques related to it. It is better to gather further information on the matter before you try your hands on it.

• Always try to have legal references and seek consultation from a patent attorney. This will guide you to up-to-date and comprehensive information.

• Inadequate or incomplete patent searches can simply waste money and time. Search comprehensively to ensure your plan is patentable and doesn’t infringe on the patents, which are in effect.

Sources: I. Videos Gone Viral, II. The Car Junky, III. The Tech Fanatic

Marketing Your Invention

When inventors contact my company, InventionHome.com about Due Diligence I like to explain the concept with a simple example. Think of it this way, if a manufacturer is getting ready to make the decision to develop, manufacture, and market a new product that could potentially cost $50,000 to $150,000 to produce plus inventory costs, they would most certainly take their time to ensure that they are making a good business decision in moving forward with the product (i.e.: have they done their homework on the product). Therefore, you can sum up “due diligence” as the process of gathering all the information necessary to make a good business decision prior to making the large financial expenditure. It can generally be assumed that the more time, effort and money (i.e.: “risk”) that a company must spend to develop an invention, the more they will evaluate the potential license. Keep in mind that even if a product appears to be simple and low cost, the process of developing and manufacturing is rarely simple and low cost. Companies will evaluate such criteria as customer feedback, retail price points, unit cost to manufacture, competitive landscape, manufacturing feasibility, market opportunity, etc.

Inventors often wonder if they need to perform Due Diligence on their invention.As discussed, this will depend on the option you have elected for taking your product to market.

Option 1 - Manufacturing on your own - If you are planning on manufacturing and marketing the invention on your own, then yes you will need to perform due diligence. Essentially, you become the manufacturer of the product and as a result you should perform the due diligence on your invention just like other manufacturers would. The problem that I have found is that many inventors who elect to manufacture their own inventions do little, if any marketing due diligence, which is a big mistake.

Option 2 - Licensing for Royalties - if you are planning on licensing for royalties, then I believe you can minimize your due diligence efforts, because prior to any company licensing your invention, they will perform their own due diligence. If you are working with a company such as Invention Home, the costs to market your invention to companies can be minimal - therefore it could cost you more to actually perform the due diligence than it would to just market the invention to companies (which, is ultimately your best form of due diligence anyway). Remember, you should have taken the time to do your basic market research and a patent search earlier in the process to be assured that your product is worth pursuing in the first place (i.e.: the product is not already on the market and there is a demand).

Let me summarize. If you are planning on investing a large amount of money on your invention, then you should always analyze the opportunity first to make sure it’s worth pursuing; however, if you can actively market your invention to companies with minimal cost, you can be assured that an interested company will perform their own due diligence (not rely on yours). Note: it is always helpful to have marketing due diligence information available as you discuss your invention opportunity with prospective companies; however, it is not always easy to obtain this information so you need to balance the effort and expense of gathering the information with the real need of having it.

I also will provide you with some due diligence tips.As discussed, the idea of marketing due diligence is to gather as much information as possible to make a well-informed decision on investing in any invention. In a perfect world, we would have all the relevant information on sales projections, retail pricing, marketing costs, manufacturing setup and unit costs, competitive analysis, market demand, etc. However, this information is not always easy to come by.

If you are not in a position to pay a professional firm to do your marketing evaluation, it is possible to perform the research on your own; however, you need to understand that research should be interpreted and used for decision-making and on its own, it has no value. It is what you do with the information that matters. Note: I would recommend that you DO NOT PURCHASE “market research” from an Invention Promotion company. Often sold as a “first step” (they’ll usually approach you again with an expensive “marketing” package), the information is largely useless because it is not specific research on your invention. Rather, it is off-the-shelf “canned” industry statistics, which will not necessarily help you make an informed decision.
Before we get to the “tips”, let me clarify that “due diligence” can come under various names, but essentially they all mean the same thing. Some of the terms that I have seen to describe the diligence process are:

• Due Diligence
• Marketing Evaluation
• Commercial Potential
• Invention Salability
• Profitably Marketable
• Market Research
• Invention Assessment

Each of these terms is basically referring to the research to assess the likelihood of an invention’s salability and profitability. The question of whether your invention will sell can never be known with certainty, but you can perform some steps to help you better understand the likelihood of success.

Again, if you are planning on manufacturing your invention on your own, you should consider performing marketing due diligence on your product. If you are planning on licensing your invention for royalties the company licensing your invention should perform this research.

Some suggestions for marketing due diligence are listed below.

1. Ask and answer some basic questions

• Is your invention original or has someone else already come up with the invention? Hopefully, you have already answered this question in your basic research. If not, check trade directories or the Internet.
• Is your invention a solution to a problem? If not, why do you think it will sell?
• Does your invention really solve the problem?
• Is your invention already on the market? If so, what does your invention offer over the others?
• How many competing products and competitors can you find on the market?
• What is the range of price of these products? Can your product fall into this range? Don’t forget to factor in profit and perhaps wholesale pricing and royalty fee, if any.
• Can you position your invention as a better product?

2. List the pros and cons that will impact how your invention sells and objectively evaluate your list

• Demand – is there an existing demand for your invention?
• Market – does a market exist for your invention, and if so, what is the size of the market?
• Production Capabilities – will it be easy or difficult to produce your invention?
• Production Costs – can you obtain accurate manufacturing costs (both per unit and setup/tooling)?
• Distribution Capabilities – will it be easy or difficult to distribute or sell your invention?
• Advanced features – does your invention offer significant improvements over other similar products (speed, size, weight, ease of use)?
• Retail Price – do you have a price point advantage or disadvantage?
• Life – will your invention last longer than other products?
• Performance – does your invention perform better than other products (including better, faster output, less noise, better smell, taste, look or feel)?
• Market Barriers – is it difficult or easy to enter your market?
• Regulations and Laws – does your invention require specific regulatory requirements or are there special laws that must be followed (i.e.: FDA approval)

3. Seek advice or input from others (consider confidentiality)

• Target professionals / experts in the field.
• Ask for objective feedback and advice.
• Talk to marketing professionals.
• Ask sales people in the field.
• Ask people you know in the field.
• Talk to close friends and family members whom you trust.
• Ask for input on the invention such as features, benefits, price, and if they would buy it.

During the diligence stage, existing manufactures have an advantage in that they have the ability to talk with their customers (retail buyers, wholesalers, etc.). In my experience, one of the most important factors that a company will consider is whether their existing customers would buy the product. If I took an invention to a company to discuss licensing (assuming they could produce it at the right price point), there is a very high likelihood that they would license the product if one of their top customers agreed to sell it.

Whether a retail buyer is interested in purchasing a product is a driving force for companies considering product licensing. I’ve seen many scenarios in which a company had interest in an invention but they ultimately decided to pass on the idea because their customer (the retailer) did not show any interest in the product. Conversely, I’ve seen companies with mild interest in an idea who jump at a new product when a retailer expresses interest in it.

Sources: I. Videos Gone Viral, II. The Car Junky, III. The Tech Fanatic

Will Riches Come From Your Invention Submission

When you have an earth shaking idea, you want to protect it. The reason, of course, is you want to reap the financial rewards from the idea that you came up with.

Money Barriers

There are 4 barriers that you must get through to get to the money on the other side:

1. Is your idea original with you? Often, what you think is your original idea, was actually patented previously. To answer this question, you need to perform a patent search. A good patent search will define what has been patented, that is related to your invention. It can also help you decide how to position your patent between the patents already issued or pending in your subject area.

2. Can you afford the cost of a patent attorney to prepare the patent for you? If you can't afford the $10,000-$20,000 that a patent attorney will charge to do the whole job, you can do much of the process yourself and save money. However, there are parts of the patent that are essential for a patent attorney to perform. The most important of these are the claims. If the claims are not correctly done, then the patent will likely not be defendable. Strong patents are worth much more money!

3. You must pay the patent office fees for you invention submission. The government fees are something that you can't get around. Now the waiting begins. It may take up to 2 years before your patent is actually issued. Part of the delay, may be requirements for adjustments to the filed patent by some whimsical patent agent. You must be prepared to make the necessary adjustments that are requested by the patent office. If you don't respond to their requests in a timely manner, your patent application will be considered abandoned. At least you now have patent pending status.

4. Is your patent commercially feasible? What if you have spent your money and your time to get a patent, and no one feels it is valuable? A little market research before you begin the invention submission patent process is a very good idea. A few questions that you might want to ask are: "What is the demand for your product?" "Are the other products out there that can do the same thing?" "Can it be sold for a price that will yield a satisfactory profit after costs?"

If you really have faith in your revolutionary idea, then it may be worth exploring whether it will be able to cross the above barriers. The cost that you incur to overcome each of these barriers is your bet that your patent will be a financial success. Your submission of your invention to the patent office may just be your ticket to financial security!

Sources: I. Videos Gone Viral, II. The Car Junky, III. The Tech Fanatic

Can I Really Sell My idea?

Yes; however, it is important to understand what you need to have in place to increase your odds of success. As you move your idea through the invention and patent process, your odds of success increase as your idea becomes more tangible and real.

The notion of selling or licensing an idea without any effort or development on behalf of the inventor is a misconception of many inventors. Although I believe anything is possible, it is important to be realistic about your odds of success with an idea. Many inventors believe that a company will license or buy their idea and pay a royalty, even though they have not taken the time to move the idea forward with a patent search, patent pending or any type of professional presentation, development or proposal. This is unlikely; to increase your likelihood of success, you should be prepared to move your idea forward beyond just a concept or thought.

Next, when it comes to royalties or payment received for licensing your idea, it’s vital that you have realistic expectations. Don’t expect to receive a 50/50 split on the profits from a company for licensing your idea. A company may end up spending hundreds of thousands of dollars developing, manufacturing and marketing your idea…so a 50/50 split would not be reasonable. Typically, an average royalty can range from 3-5% of net revenues received by the company for selling the product. The royalty rate is negotiable and may fluctuate based on the margin and/or sales volume of the product.

Overall, the key to selling your invention is having a good idea to start with, then taking some steps to protect and effectively present the idea to companies.

There are no guarantees…

The reality is that there are no guarantees for success. Regardless of how great your idea is there are absolutely no guarantees that your idea will ever make money. Great ideas can fail for many reasons, such as poor marketing, lack of market or scarce financial resources. Additionally, ideas that may seem less than stellar can often make millions for example, the Pet Rock or Chia Pet. The invention process can be exciting and rewarding; however, you’ll need to approach the process with realistic expectations and a willingness to do what it takes to succeed.

Sources: I. Videos Gone Viral, II. The Car Junky, III. The Tech Fanatic

Steps to Conduct a Patent Search

A patent refers to the right granted to an inventor for discovering any new machine, useful process or a manufacturing item. This right gives patent holder the right to prohibit others from using, making, patent sales or selling in US the claimed invention in patent exchange for full disclosure of invention. A patent is a simple way of protecting any discovery or invention.

For conducting a patent search, there are few things that are needed such as US patent applications, patent marketing services, patent file histories, patent referral services, patent software and patent searching service. Here we provide you with some steps that need to be followed for conducting a patent search.

Conduct self-search

• First determine which kind of patent you want to seek. Utility patent covers up functional facets of invention whereas the design patent covers up only the appearance of invention.

• Access patent database online like the ones offered by U.S. PTO (Patent and Trademark Office) and IBM. Find out the most important categories and sub-categories for the invention.

• Read out class descriptions in database for finding out, which are the ones that hold immense significance.

• Review all the patents that are issued within the categories or classes.

• Carry out the keyword searches for the potential invention. Don’t leave any stone unturned.

• Gather your entire patent search results in report.

Hire Professional Experts

• You need to know the options first—a patent attorney or patent agent or lay searcher. Patent agent is the one having a technical training and is licensed by U.S. PTO for preparing the US patent applications. For finding out patent searchers, you can have a look in yellow pages under the category of ‘Patent Searchers’.

• Make use of the searcher’s services proficiently. Do this by offering the searcher with complete and clear description of your discoveries or invention along with drawings.
• Analyze the searcher’s response methodically.

Warnings and Tips

• You mustn’t be concerned about compromising your invention’s trade secrets while corresponding with the professional searcher. The information exchanged is regarded as confidential.

• Most of the search reports include the following: description of the invention or discovery provided by searcher for confirming absolute understanding of the invention and to just indicate what has been searched; list of references and patents discovered at the time of search, brief discussion about found patents and the references etc.

• In order to have a thorough patent search with utmost accuracy you should be well aware about all the practices and techniques related to it. It is better to gather further information on the matter before you try your hands on it.

• Always try to have legal references and seek consultation from a patent attorney. This will guide you to up-to-date and comprehensive information.

• Inadequate or incomplete patent searches can simply waste money and time. Search comprehensively to ensure your plan is patentable and doesn’t infringe on the patents, which are in effect.

Sources: I. Videos Gone Viral, II. The Car Junky, III. The Tech Fanatic