This bear scared me when I was little, but it made $1,000,000 per month in royalties for the inventor. Stephen worked on it.
This is a continuation of my previous Q&A with Stephen Key, who has licensed to companies ranging from Coca-Cola and Disney to Nestle. He was also involved with the design of both Teddy Ruxpin and Lazer Tag. This second and final part will cover royalty rates, negotiation, and how he calls into companies to sell his concepts (including actual call scripts).
Before we get started, here are a few other resources that I have in my licensing and product design library, which really focuses on deal making and arranging revenue splits:
Inventing Small Products (Stanley Mason, like Stephen, is a specialist at tweaking/combining existing products as a lucrative shortcut to successful deals)
Secrets from an Inventor’s Notebook (Maurice Kanbar, creator of Skyy Vodka, among many others)
How to License Your Million-Dollar Idea
The Inventor’s Bible: How to Market and License Your Brilliant Ideas (stick to the licensing recommendations)
Now, back to Stephen and his approach:
-How much money does it take to license your idea? How much time does it take?
In review, I spend $100 on a provisional patent application so I can legitimately claim “patent pending” status for a full year, $80 or less on a sell sheet that I have created by a graphic design college student. My third cost is the cost of making phone calls to manufacturers. So for many simple products your total costs are $200 to see if your idea has legs. Of course there are always exceptions. Some products will cost more, but you’d be surprised at how little you can spend to be “pitch ready.”
Sample Sell Sheet
-What is a typical royalty rate?
Royalty rates can range from .0001% to 25%. Royalties are usually based on the wholesale price. This is the price the manufacturer sells to the retailers for, or that they sell to a distributor for.
A very general rough way of figuring out the wholesale price of an item is to just cut the retail price in half. This doesn’t work for all industries or product categories, but it’s a nice way to get a rough estimate of what your royalty might be for your idea.
If you think your product is going to sell for $10 at a retail store. You half that, to get a wholesale price $5. Your royalty would be on this $5 wholesale price.
So why would you ever want a .0001% royalty rate? Well if your invention went of every bottle of Coca-Cola that sold worldwide. That might not be a bad royalty rate. Or if you had a software product that only aardvark researchers bought, 25% might be very fair, since the manufacturer isn’t going to sell many units.
In my experience a 5% royalty is most common for consumer goods. I usually ask for 7% and settle on 5%.
I’ve licensed many novelty products that have sold in stores for one or two years and then never sold again. That can be fun, and I wouldn’t discourage people from licensing novelties, but that’s not where I made my millions. I’ve made serious money by selling ideas that I knew could sell 100,000’s or millions of unit every year.
My advice is to pick a product area that does high unit volume. This way that 5% of the wholesale price on every unit can really add up.
To further illustrate my point, I’ll tell you a little story. I had a student that had already filed a patent when he came to us. My approach, as you know, is to use provisional patents that only cost $100, so you don’t need to spend a bunch of money in advance of selling the idea.
It was to late for this particular student. He’d already spent about $6,000 on a patent. His invention was a drum key that made tightening the thumbscrews on a drum easy, so drummers don’t have to hurt their thumbs to get their drums tuned up.
Drummers loved it. He took our inventRight course and licensed his idea to a musical instruments manufacturer. The manufacturer was already selling another drum key and gave him an idea of how many of his drum keys they thought they would sell each year.
So he did the numbers, then realized that it would take a year just to earn back in royalties what he had spent on the patent. It was a low volume product. The lesson – pick high volume products and you’ll make much, much more money.
Six thousand a year in royalties just isn’t worth the time for me. It takes almost the same amount of energy to license a small idea as it does a big one, so why not go for the big one?
In my prior life, I worked as a product designer at Worlds Of Wonder (a now defunct toy company). I watched the inventor of Teddy Ruxpin, the talking teddy bear popular back in the late 80’s, make $1,000,000 in royalties a month!
I know that’s a long winded response to your questions about what a typical royalty rate is, but I wanted to give your readers some solid advice and examples that they can take and use when licensing their ideas.
-What should people consider when working on their first idea?
Most inventions are just slight variations of existing ideas. I’ve found it easier to sell ideas that aren’t too radically different. The easier it is for people to understand the idea, the better.
I prefer simple ideas, but I’ve worked on a few tough ones also. My Michael Jordan wall ball was super simple [a basketball hoop attached to a cut out of Michael Jordan, all of which was attached to a door]. I licensed the idea almost overnight and received royalties for ten years. It was a great product for me to start off with because it was so simple, required very little research and the manufacturing was easy. My spin label invention is much more complicated and after many years and millions of labels, I’m still working on getting it to where I want it to be.
My best advice is to make your first idea a simple one, so you can go through the whole process of selling an idea. Then work on the harder ones after you’ve gotten a little experience under your belt.
-Who do you call at companies when you try to license a new idea?
Sales guys are great, but my first choice is the marketing manager of a product line at the company that would easily understand your invention. Avoid purchasing. [Note from Tim: Find the manufacturers’ names by browsing the relevant categories in a department store, or online at a place like Amazon.]
For example, if you have a new comfortable grip hammer innovation, call and ask for the “marketing manager of the easy comfort grip hammer line” at Stanley. Use the product line name when you call. It’ll sound like you know exactly whom you are calling for. I think you get the idea. This is just one of many tricks I use to get into the decision makers at companies. If this doesn’t work, there are many other tricks you can use to get your idea in front of a decision maker.
[NOTE: For real scripts that Stephen has used in calling into companies, click here to download a PDF]
-What kinds of products can someone license?
You can license almost anything. You just need a new product benefit and some IP (Patent, Copyright or Trademark). In some industries like the toy industry, you don’t even need any IP.
However, I wouldn’t recommend licensing toys. It’s too competitive. You might have to show 200 ideas before you get interest in even one. I don’t like those numbers.
I prefer to sell ideas to industries that don’t see so many new ideas each year. I’m talking about industries that don’t currently have many innovative new products. The packaging industry is one of these industries.
I licensed my spin label invention to a packaging company. They thought I was a genius. I’m not a genius. I’m just more creative than they are, and they don’t see many new ideas.
I guess my little secret tip for you to contemplate is to consider coming up with new ideas in industries that may be a little stale. You won’t have much competition and they’ll think you are brilliant. [Note from Tim: a good method for examining industries is to browse categories or departments in a store like Wal-Mart and look for products that haven’t changed in a long time, or those where most products are nearly identical. Can you reinvigorate a commodity with a small tweak?]
-Do you have any words of advice regarding negotiating for those new to licensing ideas?
The ability to hold back information and dole it out in small intriguing bits and pieces is a critical part of my approach. It works almost every time. And more importantly, it keeps the dialog going. Once the dialog stops, the deal slows down and fizzles out.
If you keep the dialog going with a manufacturer, you’re more likely to close the deal. So don’t give them all the information up front. The manufacturer has no reason to call you back if you give them everything up front.
This is one of the biggest mistakes I see inventors make. They give up to much to soon and don’t know how to keep a dialog going with a manufacturer. [Tim’s note: Don’t oversell. This is as true for PR as it is for licensing — the goal isn’t to sell in one call, it’s to get a second conversation or spark questions that lead towards a deal.]
###
Odds and Ends: Hacking Japan and Living Like a Rockstar in Tokyo
A number of you have asked me to do a “How to Live Like a Rockstar in Tokyo” post like the how-to article I wrote for living large on little in Buenos Aires. Now you can get some of my top picks and tricks for Tokyo. I have a series of sidebars called “Tokyo Tips” in the debut issue of Everywhere magazine, which is out now. It’s a gorgeous magazine and one of the best I’ve seen in the travel genre. It should be available starting today in most bookstores.
The Tim Ferriss Show is one of the most popular podcasts in the world with more than one billion downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.
Comment Rules: Remember what Fonzie was like? Cool. That’s how we’re gonna be — cool. Critical is fine, but if you’re rude, we’ll delete your stuff. Please do not put your URL in the comment text and please use your PERSONAL name or initials and not your business name, as the latter comes off like spam. Have fun and thanks for adding to the conversation! (Thanks to Brian Oberkirch for the inspiration.)
Thank you for all of your input here- what you are sharing is enlightening for me. One initial question: am I understanding correctly that you’ve licensed 20 products in 30 years, because this doesn’t seem like very much for that time period (considering it takes you just a few months to license a product)?
Not trying to criticize, just get more informed!
Mikey,
20 is conservative. I’ve actually licensed a lot more than that, but i didn’t want to count many of the novelties in my bio since many of them didn’t earn much money.
You see it’s not the number of products that you license. It’s the money you make on each one that counts for the financial part of things.
You could license 200 ideas and if they only made a little bit of money that would not be as good as licensing 20 ideas and a few end up being big hits that sell huge volume and continue to sell for years and years.
My spin label invention has been on many products around the world. I’ve been working on it for over a decade and it’s been good to me.
I’ve had other products that sold for a year or two and produced very little money.
Hope this helps you understand the numbers game.
Peter,
I just realized that you asked a question a little while back about Inventors Notebooks and I didn’t get to it.
Your question is a legal question, so please consult an attorney to make sure to get a correct answer.
I can just tell you what i do. I normally have one notebook with all my ideas in it and then start a new one when it’s full. However, if i have a really big idea, sometimes I’ll have a dedicated notebook just for that Invention.
Iris,
RE: Your question
“I am really considering purchasing your inventRight course as I believe that I desperately need your help and mentoring. Will you be available for contact once I am on the program?”
——————
Yes of course, we provide a year of unlimited one on one phone support.
-Stephen
Stephen,
One of my inventions, an exercise product, has a couple of add-on components. Each enable the user of the main product to perform a different exercise when attached. Would you include these in a single PPA with the main product, or should I file a separate PPA for each add-on?
Thanks,
Adam
Adam,
I’m not a patent attorney and can’t often legal advice.
I can say for myself that i quite often include variations and all the possible components of an Invention when i file a PPA.
Please consult your attorney for legal advice.
-Stephen
How are you,
I have an idea for vodka companies, who would i contact vodka brands directly or manufacturers who does it for them ?
Any suggestions ?
Thank you
KB,
That would depend on what kind of idea it was.
If it was a packaging idea, you might contact a contract manufacturer that bottles for several vodka companies.
-Stephen
Hi there. First off let me thank you for all this helpful information. I’ve had ideas for many years that I thought could be profitable but always thought it was out of my reach. Now I’m back coming up with ideas and have one provisional in the works.
So on to my question. If I improve on a part of an item. A small part but it’s a very big improvement. How do I approach a company with that and how could I figure out the royalties on such an item?
Rob,
I’m glad that you now understand you don’t need to a bunch of money in the bank in order to work on your ideas. I think it’s sad when people don’t work on their ideas because they think they need thousands for patents and prototypes. Good for you!
Improvements to existing products are great! They make it easier for consumers and companies to grasp the idea. The fact that your idea is an improvement and offers a big benefit is great!
With regards to your last question. Basically your are asking…. “How do i sell my idea and how do i figure how much to ask for”.
The first part of your question is to broad to cover here. We have a lot of free info on http://www.inventRight.com . One resource which is cheap, but not free is our book “One Simple Idea”. A few free resources are our radio show and all the interviews with our students that have licensed ideas. These are both totally free and very educational.
With regards to royalties. The range could be anywhere from .0001% up to 50%. For most consumer products though it’s usually 3 to 10% of the wholesale price.
I hope you find this advice helpful.
-Stephen
With everyone that states in their opening remarks, thank you for all the noteworthy information you’ve been providing…such a life changer, really.
My question is that I have invented a new twist for the piercing market, the ear tunnels(plugs) that these people wear. I’ve done some research and over 24million people have piercings in the US alone. I know my design has a great chance of being popular and I already have a 3D engineered model made. The two points I’m hung up on are 1.) electronics, do I have to figure that out too before I present? Should be just a matter of components that already exist, but need to be placed together. 2.) Money coming in for years sounds great, but I know once these are out, similar designs will follow. Can I make a deal for a nice chunk of change up front? That way I can move on to my next idea, plus have the financial freedom until I do.
There aren’t enough words to thank you for all you’ve given to this community…but, I hope this’ll do…Thanks!!!!!!!!!!!
Hello Alfonso,
1)
You don’t always have to figure the electronics out. If you see similar products with the same features such as flashing lights, you could draw some conclusions as to if your product can be made and at what price the same way.
Another thing you can do is call a contract manufacturer and get some price quotes for large quantities. They will not only give you a quote, but will give you feedback as to if the product can be made the way you’ve designed it.
2)
It’s possible, but really not a good idea in most cases to ask for a large amount of up front money. Companies like to pay you when they get paid. In most cases, asking for a large amount of up front money will kill the deal.
Thank you for the kind words about helping answer peoples questions.
-Stephen
Thanks again Stephen for your help! I don’t have the funds currently to enroll as a member, but I’ve been downloading and listening to your free webinars and I’m just going to jump in and see if I can pull this off. I’ll come back and let you know how it goes!
All my best to you & Andrew for sharing your gift of knowledge!
A.
Alfonso,
Your welcome.
Follow your passion for Inventing!
-Stephen
Hi Guys! I’ve created two versions of my Sell Sheet(male/female), just because I thought I might have twice the chance with the people within the company I send it to.
I made my first call to a company in NY…I’m in CA. It went REALLY well ! I was actually the First person to have called regarding a product submittal?!
The Merchandise person I spoke with says he’s interested, but wants to check with his manufacturer on it’s viability. But I know it will check out because, I had it engineered and spoke with another engineer from china already about is electronics.
Anyway, my question is…He wanted to know what my “Dollar Amount” is? I told him I was looking for a Licensing agreement and a royalty on percentage, but he kept talking about dollar amount. How many dollars from the sale. Kinda threw me for a loop. Have any thoughts on the right response? I told him I’d be willing to settle for the dollar amount that wouldn’t compromise or be a stumbling block for this deal to go through, but enough to make me a nice profit.
Thanks again for all your help!!!!!!!
PS,
I’m making my second call right now! 😀
Alfonso,
That’s easy. Just let him know that you are looking for “a reasonable royalty per unit” and that you would need to understand what they would do with the product and where they would sell it. Then you’d be happy to get them some numbers.
-Stephen
Stephen your posts have been inspiring and informative. Thank you so much for taking the time to do this.
Quick question: what if my idea involves improving an existing type of packaging by adding something to it that is already patented?
I know you have said the packaging sector is good because of not much innovation and not as much competition and this is a really good idea but i dont know how i woud get around that detail??
Any advice maybe?
And thanks so much again!
Chas
Chas,
Sometimes your idea is different and does not violate the existing patent you are looking at. OR….maybe you can change it up a little so it doesn’t overlap on to what the patent you are looking at is protecting.
In other cases, you can patent on top of the other patent. But of course you or anyone else that uses your idea will also need to get permission from the other patent holder.
-Stephen
Hello Stephen and Andrew,
I wanted to thank you again for all the information and questions you’ve answered here as well as making those webinars available! I’ve learned a lot and have put that to use and as of this morning, I have a company that wants exclusivity for Domestic & International rights for my product!!!!!
Terms & Negotiations will begin soon, I can’t believe this is happening?!!!!
A dream come true and for anyone reading this…it can happen for you as well, keep trying!!!! Take in as much info as you can from these gentleman because it’ll change your life!
All my best!
Hi Stephen. Firstly i want to say that its amazing that you’ve been responding to the questions on this blog for years. Really shows your dedication and love for your work.
My situation is this:
I have an idea to create a carry case for a product X.
However this product X is not sold in Australia, and is only available through online stores (and retail stores overseas).
The manufacturer/developer of product X is in China, there is a phone number and a general info@ X.com email on their site.
My question is, can i get a patent pending in Australia for a similar price, and is there a different/special approach i should take if i am going to contact someone in China? Do you have students in Australia who have gone through a similar process, in terms of getting a patent pending and contacting companies overseas?
Thanks Stephen, i’ve already ordered your book online and can already tell its going to be a big help!
Tony,
In many countries you can’t patent an idea if it’s already been patented or publicly disclosed in another country. So you may want to talk to an Australian patent attorney.
-Stephen
Hi Stephen. I am a newbie in patent/licensing area and i have several question to ask. I have an idea related to Information Technology term. With my idea, i wish to create a product and then sell it on market. I didn’t submit a patent or license yet for my idea, but i just want to make a presentation about my idea on my previous workplace (it is an IT company). My question:
1. Do i need to get license or patent first before i’m going to made schedule and presentation on the company?
2. Is there possible if i didn’t submit patent or license but i can take a royalty from the company if they receive and implement my idea (with agreement)?
3. One-time (several months ago) after i’m sure with my idea, i just post my idea in certain forum to discuss with the forum’s members. I do post the method, but not all to make sure if my idea was right. With this situation, did my post will become a public domain? If yes, is there still any way to get a license/patent for my idea, with some method modification maybe?
4. As for me (as far as i know), submitting patent or license are very expensive and took a long time to wait for its approval. Is there any good way to sell the idea without have any license/patent on it?
5. Is there any company that did buy for unpatented idea or give some royalties for unpatented idea?
Thank you very much for your answer 🙂
Alfonso,
Thanks for the kind words.
You are welcome.
-Andrew
Hi again Andrew,
Another question for you…do I need a Term Sheet in contractual form or can I write down my “terms” nicely in an e-mail and get to the “negotiations” the same way?
Thanks a million?!
Thank you Andrew and Thank you Stephen…your reply answered my question a little more directly. No disrespect to you Andrew at all. You’d actually be surprised how many links I found on “term Sheets” also under various names. I will go ahead and make my “terms” known and hopefully go from there upward! I’m lucky to have gotten this far & look forward to finally getting to the “Licensing Contract” part.
If either you Stephen or Andrew would like to view my Sell Sheet, just ask and let me know where to e-mail it to…I’d be happy to share 🙂
Thanks again to both of you!!!!!!!!!
A.
Rocky,
That’s a lot of questions….
Since you are new to licensing and do seem to be confused on a couple things, I’d be happy to help you out on the phone and answer a few of your questions.
Give me a call at 650-793-1477
-Andrew
Hello Andrew, thank you for your help.
Could you please help me to answer my question via email? Since i’m stay on different country, it will be very expensive for me to make a phone call.
Thank you very much 🙂
Alfonso,
We call that a term sheet.
Yes, it’s a good idea to get the basic terms down. At inventRight we call it a “Term Sheet”.
Then once you agree on the basic terms you can go to a contract.
-Andrew
Rocky,
No problem. Here are some answers to your questions. By the way, Stephen and i have students in 30 countries. You should never feel restricted by your geographic location. You can make phone calls to the US for only pennies using Skype out. Our students do it to call companies and you can to!
1. Do i need to get license or patent first before i’m going to made schedule and presentation on the company?
**** A provisional patent application would be a good idea in most cases. It’s only $125 if you file it yourself. ****
2. Is there possible if i didn’t submit patent or license but i can take a royalty from the company if they receive and implement my idea (with agreement)?
****Anything is possible. What i can say is that in the 10 years Stephen and i have been teaching and mentoring our students, not a single student has had one of their ideas stollen. I think that’s because they are conducting themselves professionally and doing and saying the right things. I’m sure it’ll happen one day. It’s just a numbers game. You can never get 100% assurance that nothing will go wrong in any business. And that includes licensing. *****
3. One-time (several months ago) after i’m sure with my idea, i just post my idea in certain forum to discuss with the forum’s members. I do post the method, but not all to make sure if my idea was right. With this situation, did my post will become a public domain? If yes, is there still any way to get a license/patent for my idea, with some method modification maybe?
***** You will need to contact your patent attorney on this one. I can’t offer legal advice and even if i did, i would need more information to answer this question. My advice…. In the future, don’t post your ideas to forums.*******
4. As for me (as far as i know), submitting patent or license are very expensive and took a long time to wait for its approval. Is there any good way to sell the idea without have any license/patent on it?
****** I think you are confused about the word “license”. You create/get a license or “Licensing Contract” when you sell your idea to a company. And yes, certain categories of products don’t care so much about patents. Novelties is one of them. So, yes you can license ideas without a patent. ****
5. Is there any company that did buy for unpatented idea or give some royalties for unpatented idea?
**** Yes, we’ve had students that have pulled that off. One is John with his bear bong belt. He recently graduated from college and licensed his novelty. You can now find it in Spencers gifts. John’s one hour interview is up at http://www.inventRight.com if you want to watch it. *******
Thank you very much for your answer 🙂
*** Your very welcome. ****
-Andrew
Alfonso,
Your term sheet is just in a word doc or email that’s not in contractual form.
Think bullet points….
As Andrew stated it’s just the major deal points to see if there can be an agreement before spending time or money on a contract.
-Stephen
Hi again Stephen & Andrew,
Just wanted to let you guys know that I am now the proud owner of a Licensed Product! It’s a real thrill ! Thanks so much for all the answering of questions and the information given out to everyone here, it changes lives!
The company I’m connected with is looking forward to viewing my list of other possible products once this product is selling. Can’t wait to see what’s in store for the future!
Thanks again!!!
A.
Hello Andrew & Stephen,
Many thanks for the answer. Many thanks for the advice, and i will not post my idea on any forums from now on. I feels like i just did a suicide :s. Anyway, it is more clear for me to understand about license. I thought that license is just like a certificate when we submit a patent. In my mind, we get a patent and then we get a license to use it. But after reading your article from http://www.inventRight.com, now i realized that license is more like an agreement between idea owner and the company who want to implement the idea.
And for my case, i just want to made a presentation on company about my idea. So i need to make sure that the company agree to use my idea because it will help them to increase their production and income. My next question is (my apologize about a lot of questions :p):
1. I learn that it is necessary to file a provisional patent before getting touch with any company. For this provisional patent, can i submit it from my own country? or it is only available in US?
2. By the way i lived in Indonesia (Asia), and i didn’t find any term about provisional patent in any patent websites on my country. The very close meaning with provisional patent is maybe a “simple patent”. Is it the same with provisional patent?
3. The cost is about $125 if i file it myself, and how long does it take for provisional patent?
4. Do you have any tips on how to make a good presentation in order to company agree to implement my idea?
5. In my mind, i’m just afraid when they agree to hear my presentation, but in the end they say “i’m sorry we cannot use your idea”. But then actualy they developed it after i leave them. Just like a stole an idea. Maybe it is possible because there are a lot of good and bad company out there. Do you have any strategy to prevent something like this?
5. If the company was a good and agree to use my idea, the next step is maybe about to create an agreement or licensing contract. Do i need a patent attorney to guide me create an agreement or licensing contract?
Thats a lot of questions for sure. I consider both of you as my teacher, and i don’t know how to recompense your effort for the great knowledge sharing. I kind of a careful person, and i will make a direct movements to the company after everything is clear. I will update my effort to inform you about my struggle :p. Once again, thank you for your guidance 🙂
Rocky,
1.
Yes, you can submit a Provisional Patent Application from anywhere in the world. You don’t need to be a United States Citizen.
2.
I’d suggest checking with you local patent attorney.
3.
Yes, the cost is $125 and you can file it yourself. Once you do, you can say patent pending for one year. A PPA is not a patent though. It’s just a place holder. You will need to upgrade it in one year if you want it to become a patent.
4.
Yes, keep in short and sell benefits, not features.
5.
There are many strategies to protect yourself. Filing a PPA is just one of
them. Conducting yourself professionally like Andrew and I teach our students to do seems to go.
6.
When you are in the final stages of negotiation, you will need an attorney, however it won’t be a patent attorney, but a licensing attorney.
I suggest you get our book “One Simple Idea”. A lot of these questions are answered in there. More info on the book and our support services can be found at http://www.inventRight.com
-Stephen
Hi Stephen,
A huge debt of gratitude to you sir for sharing your wisdom. I’ve learned more just by reading these threads than i have after reading several books about inventions and the process. I’ve just started reading your book and had to pry myself away to ask a simple question that i hope you don’t mind answering. I developed an addition to shoes. I searched existing patents and found that my idea had already been patented for 6 years. Should i dump the idea or try to negotiate terms with patent holders? If you would opt to negotiate terms, what value would you put on a shelved patent that has gone no where?
Brian,
You are welcome.
You have a few options.
1) You can keep inventing and create another solution to the problem.
2) You can talk to the patent holder and see if they will negotiate some terms where you get a percentage if you can close a licensing deal. Whatever you think is fair is the answer on terms. There really are no set rules here. One thing i will say is that if the inventor is not level headed, don’t work with them. If they are cool, consider working with them.
3) Move onto the next idea.
-Stephen
Alfonso,
Congrats on closing your first licensing deal !
Thanks for the kind words.
Stephen and I love it when someone we help experiences success.
-Andrew
Hi Stephen –
I’ve been reading your posts and just thank god that I did not go for the Company that said they could get this done but $14,000. I decided that I want to do this myself. I hired a student who did a great image , 3d and all. I will be getting a Provisional on it this week , before that though , how much info is too much info to the potential Companies ? I’m so excited because we got these brochures made and they are short and sweet. It’s literally a 30 second pitch. I’m very concerned that they will say forget her, let’s fo some variations and do it ourselves… is a provisional patent enough, any tips as to what I can say to them as far as maybe telling them I have several patent pendings ? I just have a feeling that it’s a hit, but I don’t want someone or a Comapny to steal it. Also, should I put a patent pending # on sales sheets/brochures? Thank you so much, your advice has inspired me to do this on my own… and it feels great.
Good day…
Christina,
The solution is simple. File a PPA and include all the viable variations you can think of.
Always make sure to include enough info in your sell sheet to sell the benefit of the idea. There is not point in confusing them or holding back, so they don’t understand the product.
However, of course you don’t need to include details that are not relevant to “selling the benefit of the idea”.
Also, keep in mind that they have no idea what your PPA covers or doesn’t cover, so no … never include your PPA filling number.
Keep up the good work and good luck with your calls!
-Stephen
Thank you for the response, talked to Andrew last night and I’m going to get the book , “one simple idea” before I do anything. I’ll let you know how it goes… 🙂
Christina,
You had a lot of energy when i talked to you on the phone yesterday. Take that energy and funnel it. Your going to do great!
-Andrew
Hi Stephen,
After reading through Part 1 and 2 of this article I tracked down the owner of a company about licensing my idea. They are interested but have asked for a sample. As of this point, I do not have a prototype made and I do not know how I will get one done until after holiday travel, etc. Any suggestions on where to go from here? Does a prototype need to be made of the same materials that it would be in production (i.e lets say the real product would be metal but I make something simple out of paper, plastic, etc.)? Any advice would be greatly appreciated!
Thanks,
Jenny
Hello Jenny,
This is Stephen’s business partner Andrew Krauss. I co-founded our coaching company inventRight with Stephen ten years ago. I’d be happy to answer your question.
I’d do a little qualifying.
First, make sure the company you contacted is clear that your intention is to license your product to them. Sometimes companies think you are trying to sell them product that you have already produced.
Once you establish that the company is open to licensing, ask them a few questions about their company. Like….” how do you see this product fitting into your product line if you were to take it on”. A companies willingness to engage you in a conversation is a great indicator of how serious they are. Anyone can just drop you an email and ask for samples.
Another thing i would consider is making a video instead of sending a prototype. Prototypes get lost, broken and improperly used. A video that you create will always show the product in the best possible light every time. And if it doesn’t work well, you could shoot the video 10 or 15 times and just use the one take where it worked.
Keep this in mind…. you are not selling your patent or prototype, your selling the benefits of your idea.
Quite often, the manufacturer can see the benefits represented in your sell sheet and video and say……”wow, i can sell that……and yes i see no reason why we couldn’t make that”.
So don’t spend 1k’s of dollars on a prototype if you don’t need to.
Hope this helps.
Happy holidays!
Keep Inventing,
Andrew Krauss
inventRight Co-Founder
Hi Stephen and Andrew,
I’ve already filed a PPA and created a nice video showing a working prototype. I just started calling companies and so far I’ve had luck with initial calls and getting to talk to the right people at each company so I can e-mail them my video. How long should I wait after that first call before following up with them again? Also presuming I get some positiving feedback from the companies, any tips on the best way to move forward into closing the deal?
My thought is to license this idea to as many companies in this industry as I can, instead of exclusive to 1 company. Also, my idea is not a standalone product, but rather an enhancement feature to an existing product, how should I calculate a reasonable royalty percent in that scenario?
Michael,
Here’s an example and some answers to your questions.
Ask for the marketing manager in charge of dog toys if you are doing a dog toy. Another thing you might try is to call the sales department. They always pick up their phones! There are many other techniques, however i couldn’t possibly cover then all here.
RE: Follow up – Call to follow up after 10 days.
If you get interest, ask them a few questions about what they’d do with the idea if they were to take it on. Realize….. you’re interviewing them as much as they are you.
And always focus on selling the benefits of the idea. Just because they call you back, doesn’t mean they are completely sold on the idea.
You could license to multiple companies. But, does it make sense if they will compete with each other? Most of the time no. But in some cases it could. I’d generally advise against this, but every situation is different.
If you license different versions or to different areas of the world or different distribution channels, then yes.
-Stephen
Stephen-
Love your post, thanks so much for all your insight.
I did have a question for you: what if our “idea” that’d we’d like to pitch for a company isn’t a physical product?
I’ve got an idea that I want to pitch to a growing startup company- one that is a part of the whole “group buying” business model. I’ve got an idea that is purely a business PROCESS (a new way for them to deal with customers and clients, a very unique process of cash flow and how these relationships interact).
My question is, how do I protect this business plan/process if it isn’t a physical product? A PPA? Have them sign a simple NDA?
I’d value any help you could give! Thanks so much!
Jay,
You might be able to get a “Business Method Patent”. Google it to find out more. An NDA would be a good idea also.
Keep Inventing,
Andrew Krauss
inventRight Co-Founder
I co-founded inventRight with Stephen 10 years ago with the goal of helping inventors license their ideas
Andrew,
Thanks so so much for your reply, I’ll definitely look into that. Would you happen to know if you can file a Provisional Patent for a Business Method Patent? I’m not sure how all this works!
Jay,
Yes, you can file a PPA on a provisional patent. Contact your attorney for more details and/or do some key word searching on google. Wikipedia will be real helpful for learning more.
-Andrew
Stephen-
Great book! You have helped me finally decided what I want to be, an independent product developer! I just wish I would have known this was possible 10 years ago. I have a great idea for a huge company but don’t know how to get paid for it. I don’t have anything to patent, for example
I want to let XYZ company know that if they put their logo and brand on a cell phone case they would make a killing! Seems like a simple idea, they should have this but don’t. How do I protect my idea from them saying they already thought of this and how do I get paid? Thanks for all your help and inspiration. P.s. can’t wait to make some money so I can take your course!
Jonathan,
Glad you were inspired by the book. And it’s even more impressive that you’ve decided to become a product developer. Very cool! It’s a fun and exciting way to make a living.
With regards to your question. If you had a new way of putting logos on cell phones, such as the way it’s displayed or applied, that might be patentable and licensable.
However, it’s going to be hard to get compensated by just telling a company that they should put their logo on cell phones.
That’s more of a marketing idea. So, unless there’s more to the idea that you didn’t talk about, you might want to move onto your next idea.
However, if there’s some sort of business method that goes along with it, you might have something.
-Stephen
Stephen –
I have a product that I have been making and selling for over a year. I would love to submit it to manufacturers, but I think I read somewhere that you can’t patent a product that you have marketed for over a year. Is that true? Sales are low because I don’t have $$ for the marketing.
April,
I’d be happy to answer your question, however i have to say i can’t answer your questions directly but rather speak in general terms since I’m not a patent attorney and can’t offer legal advice. Plus i may not be aware of other specifics pertaining to your particular situation.
If someone publicly discloses their idea and more than a year has passed and they didn’t file a PPA (Provisional Patent Application) or a Patent within that year, that subject matter can most likely never be patented again.
However, the inventor could it many cases still patent any improvements that they did not disclose during that year.
This is not legal advice. Please seek the services of a patent attorney if you are seeking legal advice.
Keep Inventing,
Andrew Krauss
Co-founded inventRight.com with Stephen Key 10 years ago to coach and mentor inventors through the licensing process
Andrew –
Thanks for the reply. Even though you have to use general terms, you did confirm my thoughts. I have so many variations that I have not had for sale that I’m sure it will will not be an issue. The biggest problem I’ve had is that there is no other product like it on the market and no one knows what it is or that it exists unless they happen to run into my listing on line. I really think that yours is the direction I need to be going.
Thank you –
April
April,
Yes, it is important that people understand your product when they see it. You might want to change up your packaging to accomplish this.
However, some products need demonstration. These products tend to do well on Infomercials and on on networks like QVC and HSN. Then when people see the product in the stores they are already familiar with how it works and the benefits of the product.
-Andrew
Thanks! I really appreciate your input.
April,
Your welcome.
-Andrew
Hi Stephen,
I started last week and as of today, I have ideated three brand-new features for a popular social networking website; I possess basic user-interface prototypes in terms of graphics and screenshots for the new features.
I am going to open up a discussion with my uncle – who has vast experience in the marketing domain from his past jobs at several Fortune 500 companies – to seek his advise around the idea of “contacting-marketing-managers-of-the-target-company” !
I have read transcripts of your interview with Tim – found it totally cogent, incisive and brilliant. I want to thank you for sharing such valuable inputs for the world, especially budding inventors like me !!
May I have your final words/comments before I start on this beautiful journey ?
Best regards,
Nishant
IT professional
Hi Stephen/Andrew,
I’m a relative newbie at this sort of product development/licensing so please excuse me if some of my questions are stupid.
I have an idea that I have started doing a considerable amount of market research on and have started to get some designs drawn up so I have a prototype that looks professional. I know you say you don’t need to do this but my idea is very simple and hasn’t cost much to prototype.
My problem is that I know its not patentable (as advised by a patent attorney – in Australia). It currently isn’t on the market (to the best of my knowledge). It isn’t patentable because all it is doing is bundling together some existing products and selling it as 1 product. However the benefit is convenience, and I believe it would be an extremely good seller.
I’m not sure how to approach a manufacturer given I will have no protection (apart from trademark, although I’m sure they could come up with another name if they wanted to). I believe that if one company was to produce it, it wouldn’t be long before another competitor copied it, given that it isn’t patentable. So all that I’m really providing is the idea and ability to market it first.
I believe the product would sell better in the US and Europe, so I’m unsure whether to approach the companies branch in Australia or whether I should go directly to the parent company in the US? and whether if I was to sign a licensing agreement with Aust branch whether that would limit possible royalties to just here and not OS??
The advice that I have been given was to try and get a catchy name that could be trademarked (although this doesn’t really give any protection), do some focus group research, get a professional prototype made, and once that has been done go and give your pitch (on a silver platter) and hope that they see that you’ve spent some time, effort and money into it that they’ll do the right thing if they wanted to proceed with it, and not just say no and then do it themselves later (as there is no protection)? my worst nightmare!
If you could provide any advice it would be much appreciated.
Cheers
JO
Nishant,
It’s going to be hard to find some IP in the area you are working in. Other than protecting code, I would look into and learn more about business method patents.
Keep Inventing – Andrew Krauss – Co-founded inventRight.com with Stephen Key over 10 years ago to coach and mentor inventors through the licensing process
Jo,
In some industries you can license ideas that aren’t patentable and in others you can’t, so it will depend on the industry of your invention. I can’t answer your question since i don’t know what area/industry you are inventing in.
Yes, a trademark will offer you some protection for a time. You can just do a free common law trademark (TM), however keep in mind that you can’t own a trademark unless you use it in commerce. Unlike a patent, you can’t keep other people from using it if you aren’t. However, it is a nice temporary place holder to let people know that you intend to use the mark.
Keep Inventing, Andrew Krauss – Co-founded inventRight.com with Stephen Key over 10 years ago to coach and mentor inventors through the licensing process
Thanks Andrew for the reply.
The industry is healthcare/personal care (e.g. proctor & gamble, johnsons & johnsons).
In relation to my question about whether to pitch to the companies branch in Australia or whether I should go directly to the parent company in the US? and whether if I was to sign a licensing agreement with Aust branch whether that would limit possible royalties to just here and not OS?? Do you have any opinion on which way you think would be best or how I could protect myself??
I also gather from some of your previous blogs and comments, that you almost have zero chance of getting a NDA or CA signed by any of these companies, and in fact will most likely have to sign one of theirs to even get your foot in the door. If this is the case, it pretty much means that you aren’t protected in any way and are relying on them to be very honourable and trustworthy?? Do you have any advice about this area, or previous experience when dealing in similar situations??
Once again your advice is appreciated.
Cheers
JO
Appreciate your suggestion Andrew ! May I have your e-mail ID – I got more questions and I don’t want others to get confused?
Nishant,
Visit http://www.inventRight.com to contact me.
-Andrew
Nishant,
Of course. You can email me at andrew **at** inventright.com.
-Andrew
Jo,
RE: Australia vs US office
I’d call them both! Don’t over think it. Get a hold of someone and pitch them your idea.
RE: Protection and NDA’s
If you get a US PPA(Provisional Patent) that’s a great form of protection that most inventors are happy with. They have them in Australia also!
-Andrew
This idea is about eliminating the black spots in communication and telecommunication engineering. we always prefer the best then why not in terms of communication well we can control the instrument we use but at the moment the routine of packets travelled and the strength of the signal cannot be detected or spiedor predicted thus to obtain a succesful transporting of packets the idea is implemented.
Mellissa,
I’d like to help you, however i have no idea what you are talking about or what your question is.
Andrew Krauss
inventRight.com Co-Founder
Stephen and Andrew,
1st of all i wanted to say thank you guys so much for answering everyone’s questions for so long! Its truly commendable that you have been replying to this for nearly 5 years. Thanks for all the help
2nd I applied for a ppa in sept. or 2011 with the thoughts of building a company off of this one product and have since decided that marketing, manufacturing and distribution are not for me (especially after reading your awesome book.) Discovering that licensing will be the perfect option l now feel like i have a ticking time bomb in my hands since i have only 2 and a half months left. Any advice? Do i try and pitch to as many companies as possible or do i let it run out and apply again before i let these companies know of my product?
3rd Do you have any input on how i can go about making profit from marketing ideas? For example say i was the person to think of the idea of making a Doritos tortilla chip into a taco shell ( #1 selling fast food item of all time.) or something similar that that is not patentable. I think of so many of these ideas but can not figure out how to take action with them
Thanks again so much. You guys are awesome!
Jonathan
Jonathan,
Yes, one option is to get as much done in 2.5 months and if the idea doesn’t have leg’s you don’t have to worry about spending money for a full patent.
Another option is to upgrade your PPA to a full utility patent.
With regards to ideas that aren’t patentable. Try to focus on ideas that are patentable. It sounds like you’ve got no shortage of ideas. Just work on the patentable ones.
-Andrew
Awesome post and comments section! I’ve learned a lot from it.
I’m considering licensing a product and wanted to know if there are companies I should look into that do “bicycle accessories” other than the actual bicycle brands (Electra, Nirve, etc.) I’ve seen at bike shops? This is a completely new product, nothing like it currently. I’m hoping I don’t have tunnel vision, as this is my first foray into inventions and licensing. Are there other companies that I should consider?
Thanks so much!
Heather,
Great question.
License to companies that have distribution where you want to be.
Look at more retailers, catalogs and web sites in order to expand your list. If you see them in a store, catalog or web site where you want to be. Then add them to your list. And don’t limit yourself to just what you find locally. Get on the net.
inventRight Co-Founder
Andrew Krauss
Heather,
Great question.
License to companies that have distribution where you want to be.
Look at more retailers, catalogs and web sites in order to expand your list. If you see them in a store, catalog or web site where you want to be. Then add them to your list. And don’t limit yourself to just what you find locally. Get on the net.
inventRight Co-Founder
Andrew Krauss
Hi Steve & Andrew
Your answers are extremely remarkable and insightful!
I asked a question on Quora how I could launch a startup without getting involved directly, and an experienced silicon valley entrepreneur suggested I could licence the domain and idea for a percentage of profits or equity shares. The idea behind the domain is potentially disruptive to online contextual advertising. So my question is, does licensing work the same for web/mobile application “services” like product idea licensing? Also, would it be reasonable to negotiate a cash/equity licensing deal? A likely suitor would be a major fortune 500 utility or media company. Not sure if it can be patented.
Thanks for your kind response.
Hello Robert,
It really depends Robert. I need more details.
Call me at 650-793-1477 and make sure to mention that your posted to 4HWW blog and that i told you to call me.
I’d be happy to evaluate what directions you might take.
-Andrew
Robert,
It was great talking to you on the phone the other day about your question.
It seemed like you found my advice helpful. I’m glad we had some time to talk. You can also go so far with written answers in a blog post.
-Andrew
Hi stephen, im a teen father from northern maine with a brilliant invention for the electric guitar/tuning industry. Im pretty intelligent and see a large market for it but i dont know how to go about it. Should i make a prototype before trying to license it? Ive made phone calls but dont seem to ever get calls back from anybody important. Im in desperate need of some help!
Keighan,
It sounds like a fairly technical product. I’d suggest making a prototype.
Regarding calls…. don’t just make calls. Make calls and ask to send your sell sheet and you’ll have more success. Let your sell sheet do the selling for you. Almost no one will return your voice mails. Don’t stress about it. That’s normal. Instead, try to get people live on the line when you can.
Stephen
Dear Stephen and Andrew,
I have been stewing on how to start licensing my ideas for over 10 years. Basically I’ve been afraid of protecting my ideas when pitching them. Your responses on this blog have been a huge help, thank you. There are two things that I haven’t seen asked in the previous questions. I was wondering if you might share your thoughts.
1) I have an idea to modify an existing computer bag produced by a company for a new use. I can’t find any patent for the existing product. I’m also not sure how to patent my modification. Is it necessary to get a provisional patent for my idea in this type of situation? Or should I just wing it by contacting them? I have documented my idea process in my journal, so I do have some back up.
2) You often talk about not being able to provide legal advice. How often do you use patent attorneys when licensing? How do you find a good patent attorney?
Thanks so much.
Paul
Could you give me more advice about how exactly to procure the name of marketing managers for huge companies?
Hello Paul,
No need to be afraid. Just file a PPA ( Provisional Patent Application).
If you never show your idea to anyone you’ll end up ripping yourself off.
Can’t comment on the bag since i don’t know the specifics. Fell free to call me at 650-793-1477.
We give a whole class on finding a good attorney. But what’s even more important…… is knowing when the right time is to hire one. People tend to pull that trigger too soon.
-Andrew
Wren,
All the techniques to do that would take a while to go into. However, i will give you one. Try linkedIN.com
You can often find the names (if that’s all you need) of marketing managers on linkedIN. Then call and ask for them by name. Works great!
Hope this helps.
-Andrew
Very interesting career path! I have a few initial questions though:
1.) Is there a provisional patent application that can be applied for in the UK? I have googled this but cannot find a straight answer…
2.) Can a resident in the UK apply for a US ppa?
3.) If I could secure a deal, would the manufacturer take care of all the design side of things, including the material choices and design of any electronics and mechanisms needed?
I am an industrial design student and have two very marketable ideas, however I am unsure as to whether I would be required to sell the idea/concept or finished design with fully researched specifications?
I can at this time create a sell sheet that fully explains the benefit of the product concept and provide and ideation of what it would look like. The ideation however would not be at a level of completion that the manufacturer could instantly put it into production. Would they be able to help fill in the blanks and complete the design?
Thanks,
Tom
Tom,
Answers to your questions. ….
1 & 2)
You don’t need to be a US citizen to apply for a US Provisional Patent. So, I’d just do a US PPA.
No, there is no UK PPA that i know of.
Please consult an attorney for more advice. I am not an attorney and this in not to be considered legal advice.
3)
It all depends on the product, but the vast majority of the time the manufacturer will work out the manufacturing details. You just need a good idea with benefits.
-Stephen
parallel robot arms weave hand knot carpet with cnc controller and many other equipments…….
I have the $125.00 paten for a welding helment that can be used world wide and I want to know how do I approch a company with out them taking my welding helment international?
David,
A US patent only protects you in the US. If you want international coverage, you’ll need to get protection in each country you want protection in.
Unfortunately it’s very, very expensive to get international patents.
So you need to decide if it’s worth it or not.
My question is when talking with marketing managers and sending them the SELL sheet for them to look at your product. Don’t you have to have them sing a NDA or non-compete clause before you show anyone your ideas?
Dustin,
I get this question all the time.
Yes, you can go that direction, however you will feel like you are beating your head against a brick wall for the most part.
Think about it from the companies perspective……
You are asking them to sign an NDA saying whatever you show them, they need to keep confidential, but they have no idea what you are showing them.
Don’t you think that puts them in a bad position? What if they are working on something similar?
Most of our inventRight students file a Provisional Patent Application to protect themselves. It’s only $130 or $65 if you meet the new income requirements.
A PPA gives you patent pending status. And you can actually write Patent Pending on your sell sheet.
note: this is not legal advice. See the services of an attorney if you seek legal advice.
gotcha! that makes sense. Can you do a sell sheet even if you don’t have a name for the product OR your Brand name OR even a MSRP? Because technically if you haven’t even done the prototype you would have no way of knowing how it will be packaged and what it will cost correct? I also wrote you through your website and believe it was directed to you. 🙂 Sorry I’m anxious to get started and try this out.
Or perhaps I can call you and explain both my ideas and you can suggest the path I take whether it be sell sheet or prototype first. Let me know Any help is much appreciated. I’m ready to move forward!!!
Hello Dustin,
Yes, I can give you some advice.
I do one time free consults.
Book an appointment with me by visiting my online appointment system at http://www.inventRight.com/411
Then call me at 650-793-1477 at the time you book.
Andrew Krauss
inventRight Co-Founder
Hey andrew did you get my email? I hadn’t heard back from you about signing up for the coaching course. Please advise.
Hello Dustin,
Yes, i dropped you an email and also left you a voice mail. Feel free to call me at 650-793-1477.
Andrew Krauss
inventRight Co-Founder
Andrew,
I think you may have me confused with someone else. I have no voicemail nor email from you. My email is dmow15@gmail.com and number is 801-641-3629
Stephen,
I have always looked at a problem, project or task and tried to figure out a way to do it with products that are marketed to be used for something totally different. Usually to save money. One example I can give you is what I did to a bathtub surround many years ago. There was paneling that looked like tile and the outside layer had started to bubble and peel. I could not afford to do any renovations so I scraped it, sanded where there were noticeable edges, caulked it really well with silicone, painted it with 2 coats of waterproofing paint, (maybe dry-lock, can’t remember) then 2 coats of outdoor house paint. I figured if it could stand up to sun, rain, & snow it should hold up in the shower. You could still see the ’tile look’ through the paint and it was very easy to clean. I was in that house for 5 years after that and it was still in perfect shape.
I have 2 ideas for products that I use for purposes other than what they are marketed for. Just a few cosmetic tweeks, a change in packaging and marketing . . . Is there a way to protect ideas like this and license?
Thanks
April,
I have to give you the answer patent attorneys always give.
“It depends….”
It really depends on what you improved and what you are trying to protect.
Andrew Krauss
So is the first step then to ask a patent attorney what you can and can’t patent OR license? All of my ideas are basically small improvements to push to a different market? Or with a simple sell sheet could you approach a company without any PPA? Also in reading stephen key’s book he says that an NDA is always necessary in talking with companies before you present sell sheet. I’m confused as you say it is not necessary and a turn off.
Dustin,
The first step is not to visit a patent attorney to see what’s patentable. The first step is to study the marketplace and see how your product fit’s in amongst other products in the category of your idea.
A PPA is your major form of protection when working on your ideas using our approach. You can get them to sign an NDA later when they want more details, however few companies will sign one up front.
Hi Stephen and Andrew,
Thanks very much for all of your fantastic advice on this forum. One thing that I’m struggling to understand about your method is when to involve an attorney. Do you recommend involving an attorney when filing the provisional patent application (e.g., for patent searches, etc.)? Or, do you recommend doing your own patent searches for the initial step? I understand that you’re not trying to provide legal advice; I would just like to understand what you would recommend based on your experiences.
I have an idea for which I would like to file a PPA (using a software like PatentWizard). I’ve done some preliminary searches on google-patents. While I’ve found patents on things similar to my idea, I have yet to find my idea exactly. I just worry that some of the patents for similar ideas may have “all inclusive” language buried within that may cover the domain of my idea.
Would you recommend involving an attorney or research firm at this point, or would you recommend proceeding with the PPA process independently?
Thanks very much and best regards,
Lawrence
Lawrence,
You need someone to guide you along so you can license your idea. That person is not a patent attorney. Patent attorneys are great, however don’t seek business advice from them unless they are also business experts which most of them are not.
Hi Stephen & Andrew,
Thanks for lending your knowledge to all of us going through this for the first time!
My product is designed and my sell sheet ready. I am based in Canada but I’ll be approaching US companies, should I just file the PPA in the US?
Also, for the part of product that has IP, I am saying it is “patent pending”…should I just use the term “patented” or do companies really care when initially reviewing it?
Your help is very appreciated!
Rob,
I can’t tell you where to file or not to file. That’s a decision you have to make. I can say that most of our Canadian students file a US PPA and then file in Canada if they get interest.
When you file a PPA(Provisional Patent Application), you can’t and shouldn’t say patented. However, it’s totally legal to say patent pending when you file a PPA. Some companies care if you have an issued patent, however most are ok with pending status.
-Andrew
Great article!!!! I have an idea for an improvement to a product that like you said, has not changed in years. I am confused on the process to create this product. I would like to hire a manufacturer and make the revised version of this product and sell it under my own company name. Do I have to have permission from the original patent holder to make my own version of the product. I see so many of the same thing on store shelves, I just wonder how they were able to create and sell a product that is already on the shelf? My product deals with maternity/nursing item and there are 4 or 5 big name companies on the shelf that all have the same design and function. My product has a different design but the exact same function. Do I need to obtain a design patent, or can I just simply manufacture and distribute my product? I hope you can help. Google doesn’t seem to understand my line of questioning. Lol
It all depends what’s been patented and what the clams in the patent are.
Hi Stephen,
I am impressed by how you kept these 2 posts in fourhourworkweek.com alive through all these years. I actually took hours to read through all the comments you and your co-founder gave.
Two questions here,
1) Should I show what I have filed for PPA to the manufacturer? Or do I avoid if possible, so that they don’t exactly know what I have filed? Do I provide sketchy details?
2) My PPA is abit troublesome to file as it involves chemicals and an existing widely used patent. I am not knowledgable about chemical terms so I am worried that it is easily bypassed. Any advice for this?
Thanks loads!
Leonard
1) Yes avoid if possible, but sometimes it’s ok to show. To big of a topic to discuss in blog comments section.
2) Quite often you can file your own PPA. However, given your situation I think you’ll need to hire a patent attorney.
Hi, Stephen/Andrew
First off, I would like to say thank you for all your great input and advice to future innovators, including myself. 🙂 Ever since I came to stumble upon Stephen’s book, I have been inspired of all the great possibilities and potential licensing an idea could be.
I have a question that has been on my mind. I have an idea that I really want to sell to a future prospect. But problem is, I am based half a world away from the States. From your experience, is it necessary for the developer to meet in person the prospect? Say, for example especially when it comes to signing the licensing agreement? I am trying to weigh all things in perspective because travelling to the States would be a first time for me and that does require the extra moola. In another scenario, the company(it is a big company) happens to have one of their offices here where I am based, so do you think I could approach someone here?
Talk soon!
AJ
AJ,
You can license products from anywhere.
Stephen and myself have students in 37 countries. They can and do sell their ideas from wherever they live. No flying required.
If you have Skype and an internet connection you can do this from anywhere!
You never need to meet with companies in person. Phone and email works fine. In person meetings are a waste of time. A typical negotiation will involve going back and forth with a manufacturer via email and phone over one to three months.
Licensing deals don’t get done with one big meeting and handshake. That’s movie stuff. 😉
With regards to signing a contract… that can be done via email. No need to fly anywhere.
Companies don’t care where you live. They just want good ideas. So, no … don’t limit your self to where you live. Make sure to call US companies. All our students do. You should too.
-Andrew
Hi Andrew,
First of all a BIG BIG Thank You for your suggestions. This blog can win “The most valuable contribution to make this world a better place to live in” contest. Do participate 🙂
I have a similar concern. I have got a provisional patent in Singapore. However, there is no manufacturer in Singapore who can work on my idea and bring it to market. We have only retailer/distributors in Singapore.
If they will contact their manufacturer in China etc., I don’t know how safe my idea would be there via these distributors.
If i approach other countries like US sitting in Singapore, where i do not have a provisional patent as well, i think the probability of success goes down considerably.
Kindly suggest what can be the best way out in this situation.
This is a Car Accessory product & it’s like “Amazing Solution” to many problems.
& please continue this thread forever. All the Best !!!
Varun Mishra
I need to find manufacturers for my welding helment anywhere in the world to try to license or get them made. Anyone out there want to help me?
Dear Mr. Key,
I have a food storage product that I think will sell great to companies like Glad and Rubbermaid, etc. What do you think about sending each of the companies an email (rather than calling each) and waiting to see if any are interested? Does this method work? Also, some companies (like Walmart) have a “submit your product online” section. Are these effective?
Thanks in advance for any response regarding sending emails in mass.
Benjy
With a project like yours it’s important to go for smaller players as well. You need to call in addition to sending emails. Walmart program is more than likely not for licensing, but for people who are venturing.
Hi Mr.Stephen Key,
Glad to hear you,I always have hundreds of ideas to invent and build stuff and it could be an option for me to patent/license those ideas. I am from India. In India it is not possible to patent an Idea,here innovation can be patent , but not Idea. My Problem is i can’t make it as real(innovation),because it takes too cost.
I Have a Mobile network related implementation idea. If mobile network companies follow this idea,they can save crores of money. But i am not able to patent this Idea. Could you suggest me Stephen. Regards, AJAIKUMAR
You can get a Provisional US patent for $65 just like a US citizen. You can do it!
Hi,(You can get a Provisional US patent for $65)????? How come it cost me $125.00
I have a Provisional Patent and I have not found a manufacturer company for my new Welding helmet to work with me. Now I don’t care where you are at in the world but if you think you can help me even if we can get them made by hand one at a time we can sell them. David PS if you place my full name into any search Google ect. you can see who I am and get back to me for more details.
Hi Andrew,
First of all a BIG BIG Thank You for your suggestions. This blog can win “The most valuable contribution to make this world a better place to live in” contest. Do participate 🙂
I have a similar concern. I have got a provisional patent in Singapore. However, there is no manufacturer in Singapore who can work on my idea and bring it to market. We have only retailer/distributors in Singapore.
If they will contact their manufacturer in China etc., I don’t know how safe my idea would be there via these distributors.
If i approach other countries like US sitting in Singapore, where i do not have a provisional patent as well, i think the probability of success goes down considerably.
Kindly suggest what can be the best way out in this situation.
This is a Car Accessory product & it’s like “Amazing Solution” to many problems.
& please continue this thread forever. All the Best !!!
Varun Mishra
Varun,
The solution is simple. Pay the $65 for a US provisional and license it to a US company.
Hey Fellas,
I have 2 ideas,
1# is for the digital world.. and to me feels like a little programming code.
2# is an out of this world idea for the food worlds.
i just came across this site after a random woman i met after a Dj gig in europe told me about licencing!
to put this in dot point..
> make Sell sheet / physical and Digital.
> file for provisional patent
> start making calls to the company’s
> ?
how long do they usually take to respond?
do they ask you to go in for face to face?
if ive covered a provisional in Australia, can i still sell it in the USA or EU.. or should i apply for more Provisional in those territory’s or will the company themselves go cross border if its THAT good of an idea?
im so happy ive found this blog to help me out.
Kudos to TIm for posting this up.. im reading the 4 hour work week on the flight home from europe in november.. and want to start implementing and moving on thing right away.. (as i have a fear of making a new resume for the local telecom call centre) lol..
cheers.
Andy
Andy,
You should file a US provisional.
Regarding your list….
Don’t forget to make your list of potential licensees.
I would give yourself three to four months to close out a project. In the meantime while you are calling and emailing to follow up, you should be adding another project to work.
More projects = more chances for success.
I have been given a gift of drawling these beautiful characters, I have many of them done over years. I would like to use them to sell products and marketing. How can I do this, Can I put them all in one book and copyright them, or should I categorize them and do this. Also, whom and how would I do this. I believe some of the characters are better than Warner Bros. and Disney characters?
Thank You
Kimberly Sparks
[Personal email address removed]
Thank You
Kimberly,
Characters are licensable. However, you need to decide how you want to sell them. For new cartoon show, shirts, mugs, action figures? You need a game plan. Direction you decide to go will determine who you contact and how you pitch them.
I am a freelance designer, I would like to make Provisional Patent Application for my design works. That are a luxury mobile phone design (out appearance only) and one desktop computer design ( out appearance only). I feel these two design piece are very impressive, I believe that they are going to attract eyes of manufactures.
Thus, I want to make Provisional patent application for these two designs before I contact any manufactures. However, I’ve made several phone call to USPOT.gov ( The United States Patent and Trademark Office ). They all said ” I can’t apply Art design work for Provisional patent application “, they can only be done through non-Provisional Patent (full Patent Application ), which are very expensive. Is that right?
In addition, they told me that any Provisional Patent application will take 6 months to 12 months to complete. That’s just too much time for an individual designer to wait. According to your article, the provisional application seem very easy to apply, cheap and fast. However, the office told me they take long time to approve, and can’t apply design work for Provisional patent application? Is that right?
Sounds like you are getting a lot of misinformation or most likely misunderstanding the info you are collecting.
You are right that you can’t get a PPA on a design. PPA’s are for products or technologies that have utility.
Instead you would get a design patent.
However, most freelancer designer, don’t have the manpower and resource to apply patent for their art and design. They are too expensive and take to long to get patent.
Then, how to protect their design works such as car design, architectural design from stolen, when they contact with manufactures.
Independent inventors and designers and everyone else file PPA’s and TM’s and other types of IP all the time. And it didn’t take six months. Took about a day to prepare everything, including drawings, and 15 minutes to submit.
Seriously. It’s within the reach of many people’s skills who are not IP lawyers.
I need help. My idea is in the Automotive Industry. My idea is VERY widely used by all, to help in Emergency situations.
Hello Jim,
Here’s more info about how Stephen and can help.
http://www.inventright.com/let-us-show-you-how-to-successfully-bring-your-idea-to-market
Do you have information on how to license training content to companies-thanks. Any information from contracts to how much to charge, to what are things to watch out for are welcomed
Yes, you can license a training program. Licensing isn’t just for physical products.
Just like when you are licensing physical products, the best thing you can do is license to someone with great distribution. Tapping into existing distribution channels is one of the biggest benefits of licensing.
Hi Guys
Love you work – don’t ever stop 🙂
I come up with 2-3 new ideas each week. It’s somewhat embarrassing and annoying that it occupies so much of my brain time, but at least there’s no shortage of creativity or future opportunity.
In the past year, quite a number of my ideas are ways in which medium/large companies could make massive revenue gains, save large amounts of cash or exploit high revenue opportunities they may not realise are sitting at their doorstep.
From what I’ve read in all your advice so far, it’s largely physical product based ideas and how to licence them – which is wonderful advice!
However, given these are more digital ideas, or application of knowledge, how would you recommend structuring some kind of deal with potential target companies? The few I’ve spoken to put it into the ‘oh this is just another consultant trying to make a few bucks’ type deal. Do you have any suggestions for a better structure or way of approaching this to achieve a better outcome?
Thanks guys, keep up the great work.
You can most definitely license digital products. If you are getting some push back, make sure you have some IP(patents in most cases) and pitch the benefits with what we teach our students to use (a sell sheet).
Can u please send me a list of manufactures that deals with perfume and jewelry industry I need to try to sell my idea
Rosa,
Making your list of companies to call is something every inventor needs to do themselves. It’s not as hard as you think. Figure out what retailers you want to sell in, then make lists of the manufacturers selling there.
That’s you hit list.
Hey this really helped me, I am 18 years old and I am working on some ideas. my goal is to have my first idea published this year. unfortunately I do not have the money for your course but I am going to do my best through God, your book and my drive. I have big goals for myself and thank you.
*Licensed
Your welcome Joshua
Great information. I have my second appointment with a manufacturer who may be interested in purchasing my idea for a new oil drain plug. Any tips on how I can come up with a reasonable dollar amount?
Thanks
Lloyd,
Yes… don’t give them a dollar amount. A buyout almost never makes sense. You’ll want to ask for your royalty over time. So when they sell a unit, you make money. Royalties are usually paid quarterly.
I want to market/sell my idea to a national home improvement company. I currently spend thousands of dollars as a contractor buying products that I would by from the national chain if they would make some changes. My annual 10k – 20k times thousands of contractors like me, times thousands of stores represents a huge sales potential and I know why I don’t use the box stores for these products.
Joseph,
Sounds like an opportunity. Maybe there’s a new product to be licensed there.
Stephen, Andrew, & Tim,
I am completely astonished at this Q&A on a blog. Almost 7 years of questions. That must be a record.
I wonder how many of the thousands of ideas and inventions mentioned here will actually see store shelves?
Thanks for your patience w/all the questions and your consistent advice. I look forward to continue to learn from you.
Ted
Your welcome Ted. Thanks for the kind words.
Tim is a friend of ours and past student. We really appreciated his blog post and wanted to help contribute some licensing education to the 4hww community.
Hi. I kind of have more than one question. First im about to join a non profit organization the mentioned that I should start at small businesses is that a good idea? Second should I call well known companies specializing in my product? And ive drawn a few of my own logos how do I protect them and are royalties given seperately gor each product sold? Sorry for so many questions.
Hello Meka, Yes, your list of companies should be as large as possible. In many cases 15 to 30 companies. The more companies you call…. the greater your chances for success.
I’m a Canadian with an American design paten and I think its awesome and seems like the weather is helping me . Just wondering which way to go ie. building one or afew and market them. I liked the comment sell 100,000″s or millions something so easy and handy , and lets face it people are getting lazier and lazier and if there is an easier and more efficient way of doing it, enough said. There are similar patens but are for the wrong season. Hope to here back from you guys eh! —-Marcel
Marcel, Licensing is a great way to go! You get to tap into their(company you sell your idea to) money, manufacturing, advertising, sales force and distribution. That’s much better than just raising money! Don’t you think?
Hi Stephen & Andrew,
What if my PPA is rather worthless (due to non-engineer and non-attorney me writing it myself), and I’m only filing one to get patent pending status so I can start pitching. I’m not thinking of it as a placeholder at all, because I won’t be able to file a NPA within the year.
Is this frowned upon? Could it kill a licensing deal? Does the licensee even read the PPA or do they immediately have their own engineers and attorneys draft and file a NPA? What problems could this approach cause?
Thanks!
You can file a PPA that’s will give you week to no protection just so you create the perceived protection of a PPA. This will allow you to say “Patent Pending” on your sell sheet. Many companies will not want to file a patent, but will still pay you a licensing royalty. It’s not always all about patents! To answer your question, doing a very bad PPA could create a perception issue with your potential licensee if you’re drawings look like a kindergardner did them. Of course. So when you get interest take a closer look and do another PPA that you won’t be embarrassed by. It’s only another $65.
Hello Tim, some truly great advice. I am wondering if I could get a little more info from you. You see, I have an idea for the restaurant giant McDonald’s… And I truly believe that the idea is going to readjust and reinvent the entire business market. Please send me a response..
P. S. I am not a crack pot, my wife and family usually tell me if my ideas are bad or not, and I have had to stop thinking of ideas that were refused but then I see the logic in the reasoning and I’m ok. I really think that you would find my idea intriguing, and I could really use some good advice, I will make it worth your while.
Stephen,
Such great and valuable information here. I’ve enjoyed that I accidentally made some pretty good decisions thus far with my idea. So far I have invested $500 in a provisional patent, drawings and a rough prototype for a police training device. Since I was working in the profession as a custody and control instructor i field tested the product before getting the provisional patent and was very happy with not only its function but the positive feedback I received from other officers and fellow instructors.
I think that all the information on my next steps have been found in this blog and the comment section. However, my issue lies more with timing. I have just accepted a position to which I am making a career change and am uprooting my family and moving to the other side of the country. The new career will be demanding at the start and time will be scarce. I have from now until September 22nd 2014 to make something happen. I guess my biggest question for you is, if you were in my shoes with this situation and having more experience with how much time it takes to move from provisional patent to licensing, what would you do and is it possible to make it happen with such a short window?
Al
Stephen or Tim, please feel free to add your two cents also, I didn’t mean to leave you out.
It’s a good idea to file a Provisional Patent Application when you are ready to start making calls the next day. If you don’t, your year will run out. We see this happen to people all the time. Not our students of course. The PPA does you no good if you don’t try to license your idea by calling companies.
With regards to time. You can get a lot done in 2 to 4 hours per week if you are doing the right things. You can do this with a full time job with no problem. You just need to be committed to do the business side of things. That’s the side we teach our inventRight students.
I have a patent pending on a 100% unique item that solves the annoying problem of crinkly wrapper noise when someone opens food or candy in a live venue such as the opera, live theater, and symphonies. It’s not a contraption. It’s an elegant design with high-end outside cloths like satin, silk, etc. I am very good at speaking on the telephone and have no trouble getting corporate phone numbers, but have not had any success trying to submit my invention to the top major fashion designers and manufacturers. I get the usual deaf ears and walls from non-decision makers, but I know that getting attention on what I have from the key person and this is an instant hit. Any suggestions?
You shouldn’t have to get anyones attention and you shouldn’t try to sell on the phone. Just get permission to send your sell sheet or video that does the selling for you. That’s what Stephen and i teach our inventRight students.
Hey, the product I have in mind is a sugar substitute mostly used in manufacturing. It is not a new product worldwide, but it is unpopular in my region of the world and can be made almost entirely from an abundant crop in my country. There is a high demand but a very low supply for the product. so it has to be mostly imported. I like the idea of the minimal guarantee clause in a licence and I will like to know:
1) If it will be possible to license the idea and if I will be able to protect this kind of idea
and if yes
2) How will I go about contacting manufacturers since I believe a sell sheet or phone call migth give more information than I am willing to give since its food product
Not enough info to go on here. Feel free to give me a call. Filling a PPA and or keeping parts as a trade secret would be a good approach. You need to do these things in order to feel comfortable showing the idea. Also, there may be some method of manufacturing techniques included in your PPA.
Seeking a way to rent my idea.
Get our book “One Simple Idea” on Amazon. It’s got a five star rating. It will help you.
Who should apply my provisional patent through
You can do it yourself with the proper training. It’s not hard. Google inventRight to find our website and get more info.
I have lots of ideas that i want to work on but my problem is geting a sell sheet for them because i dont have money to develop the prototype.i need also where i can get a list of companies that i can linences my ideas to
Sometimes your prototype is just someone that photoshopped it for you. Don’t feel like you always need a prototype. If the companies you are pitching to look at it and say… “yeah, we can make that” why did you feel like you needed a prototype? And if they insist you make one, why not get interest first? Just a few things to think about.
Hello Stephen,
Can you please give me a list of the tricks you can use to get the idea infront of a decision maker at the company, other than contacting the marketing manager? Are they completely listed in your book (One Simple Idea)?
Thanks
Yes, we cover many techniques for getting into potential licensees in “One Simple Idea”.
This is incredible……a gold mine of information. Thank you sir so much for sharing with people. I have a new type of hat that I am trying to get companies like Lids, New Era,…Nike interested in possibly purchasing the rights to. I have a patent pending on the hat,…and on the device that makes the hat so unique. Also,…this hat may solve some problems that many of the hats made today don’t. This hat is creatively worn,…and please believe me when I say this,…this hat possibly has the potential to change the way hats are worn….” on a world scale..” I have gone to local hat stores, and shown it to people, and the response was better than I thought it would be. I showed a prototype. Some of the markets this hat can be worn in are…Hip Hop,…Sports,…Hiking. At least 5 other major markets it could be used for. Honestly,…it could or may have the potential to revolutionize the hat industry as we know it. A definite game changer. [Moderator: email address removed] Thank you so much.
Thanks Mark,
Yes, Stephen and i have gotten many comment about how long we’ve kept commenting on this blog post. We love educating and licensing. Thank you for the kind words.
Hi guys,
Loved the article, still reading the thread.
Question for Stephen Key or Andrew Krauss: I have two ideas which are oral supplement formulas and are effective in specific special needs of certain people and are definitely marketable to a large company. The ingredients are all safe and legal. My question is, how should I, or could I go about licensing my ideas to a large vitamin company for example? After getting a patent? A copyright on a formula? Without any IP protection?
I eagerly await any input or advice your knowledgeable brains may be able to come up with.
I can’t say without knowing the details of the product of course. Your main form of protection would be trade secret or patent most likely.
It took a while to get through all the comments and I commend you for your dedication. I have an understanding from my own research on what to do.
My question is one that centers around a “stale industry”-trash collection and waste management. Innovation in terms of marketing via a design that can be put upon their collection cans/dumpsters in addition to their own logo.
I figure that copyrighted digital files and associated tags are the way to go but these are just marketing methods. I have specific ideas to enhance a fairly staid brand that should increase their hauling if I figured this correctly. I assume quantified research of their hauling volume might help to pitch the incremental increase.
Do you see any value in making this a licensed design. I would approach other facets of the industry such as trash bag manufactures and have an idea about a innovative product there as well.
Hello guys, I’m new to all this stuff, learning as much as I can. So I have a Idea, What would be My first step. My product would be in the clothing industry. I don’t have a Product yet just a Idea.
Hello Philip, Your first step would be to look at all the products in the micro category of your invention and see how yours fits in. So if you are in fashion and have a new belt, look at the benefits of other belts.