Inventors: Do you really need to patent your invention before submitting it to companies for a license?
I have found one thing in common among most inventors. Most pay thousands of dollars for services they don’t need if they want a business to license their product. All Invention Filing Companies push for a patent search, file a provisional patent, file a full patent, do a market analysis report, make CAD drawings. Why? Because you have to pay for these things and they provide a service by doing just that.
Here are some things those sites stopped telling you.
You can conduct a patent search yourself using the patent office website or Google new patents search. The downside is that if you don’t find anything listed, it doesn’t mean a provisional patent hasn’t been filed. You just can’t see it. You can spend all your money on a patent only to find that someone else has a lock in place. Additionally, you will find that when you license your idea to a company, they may want to improve or modify it so that your patent no longer covers the final product. Therefore, another patent must be filed. I call this “What started out as a dog ends in cat syndrome.” The original patent money was wasted. I have 6 items on the market and I didn’t spend a penny on the patents. The companies that licensed the ideas paid for the patents out of their pockets to protect their investment. The patent covers the actual product they are producing.
A provisional patent is cheaper, but a 1-year watch starts. If you don’t get the license in that year, you MUST apply for a full patent or your idea is open to anyone else who files a patent. Once you start the full patent, you will spend thousands of dollars to complete it. Do you have the resources to pay for a full patent? or they will also wait at least a year or more before the patent is issued.
Full patents are great if you are a large company and can spend hundreds of thousands of dollars to defend your patent. The average person cannot afford to take on a company the size of Disney or Mattel to fight copycats. You will lose any benefits you have made and will be in court for years. If you don’t think that’s true, take a look at all the copycat copycats on the shelf right now.
A market analysis is a waste of money unless you plan to produce and sell the item yourself. If you do one today and find a company that licenses your idea, they will do their own market analysis and will not take your word for it. So, you are paying for something they will do anyway. In the last 5 years, only one company asked me if I had done a market analysis on that product idea. I asked them if they needed me to make one. He said no, they would do their thing.
Also, how long will your market analysis take? If it’s been a year since you made one and you still haven’t found a company to produce your product, is your market analysis still valid? Can you afford to have one done every 6 months or annually?
CAD drawings or some other technical engineering drawing are not always needed to convey a point. If you’re making electronic circuits or something extremely high-tech, it’s probably wise. If you’re producing a low-tech item or board game, you don’t have to be so technical. All my drawings are two-dimensional. They look professional, convey the message, are in color, and have concise explanations included that describe the function and benefits of the items.
More and more companies are open to seeking outside ideas from inventors. They see the value in having someone outside the company review their line and see if they can find something that fits. I approach companies through a confidentiality agreement. Once each of us signs the agreement, I will submit my idea for your review. If they are interested, we will discuss the royalty and license terms.
Since I don’t have to wait for a patent, I can start contacting companies right away. This saves me a year or more waiting to get started. Another point you can consider is that if you approach a company with your patented idea, they will normally offer you between 3% and 5% royalties based on sales. If you approach them with the same idea and it is not patented, they will offer you between 3% and 5% royalties. So you are saving the cost of the patent and when you get your first royalty check, it is a profit, not something you are using to get back the money you spent on the patent.