POTHOLES OF INVENTING
I have been in the Invention Business for over 50 years. I have been a patent examiner, a president of a business selling an invention, a patent agent helping inventors, etc.
WARNING INVENTING MAY BE DANGEROUS TO YOUR HEALTH
Inventing will:
Cost tens of thousands of dollars, maybe hundreds of thousands,
Take away thousands of hours from your relationships,
Cause you sleepless nights and other stresses (divorce, loss of a partner, alienation from your children, etc.),
Cause you to have bad health due to the stress and lack of sleep and
May leave you bankrupt.
STARTING
At the start, you have to consider whether your invention will make enough money to warrant the cost of trying to get a patent. If you don’t get a patent, then a big company can copy your design and beat you at selling the invention.
A US patent will cost $10-20,000 in fees and patent practitioner work and take 100s of hours of your time.
You know that your invention will make millions of dollars because a lot of customers will want it.
Everyone calculates the number of customers for their invention by taking, for example, the number of pet owners, 40 Million (40M) as the number of customers for their invention. Then, they guess at how much that they will make or profit on each sale, $5-10. So, they will make $200-400 Million (M) on their invention.
$10-20,000 doesn’t seem so much when you are sure that you will earn $200-400M. However, this calculation is essentially based on no hard facts.
What if most pet owners would not want your invention. Dog inventions are only half of the pet owners. Now, you are at least down to 20M possible customers.
Then, if you are going to make $5-10 on each sale, that represents your profit. In business, a good profit is 20% of the final price of the item. That means that your invention has to sell for $25-50 (20% of $25 = $5).
Anything that sells for more than $9.95 is not considered an impulse purchase which is an easy sell. So, if the sale is not an impulse sale that will drop the number of customers by at least 90% to 2M. Since times are tough for many people (the proliferation of dollar stores), I would think that it might drop the number by 70% to 0.6M.
Inventors are usually sure that they can sell at least 10% of the 0.6M (60,000) customers as a guess for who would buy.
However for you to reach those sales, you have to advertise and get the invention into stores. Advertising and convincing stores to take an invention costs money and time (thousands of dollars and hours).
Suppose you never sold more than 10% (6,000). Then your profit would be $30,000 (6,000 times $5).
So, now that $10-20,000 for a patent is very large and almost all of your profit, and it is paid before you get any profit.
So, you must find out if there are enough customers who will buy your invention or take a chance on blowing $10-20,000.
SELL OR LICENSE THE INVENTION
Why not sell or license your invention to a company already in the pet industry? To do a sale or a license, you still will have to get a patent to sell or license
As an example, the invention that I sell was licensed by a large company. The company could never get the sales above $750,000/yr. The large company could not make enough profit to continue selling the product and gave up the license. That is how I became CEO, by default. We could not afford to hire someone to run what was left of the sales created by the large company. So, I and the Treasurer work for no salary. We get paid through a distribution of the profits on sales and royalties from infringers. Yes, the large company had small companies selling the product protected by the patent. The large company was not in the business of suing the small infringing companies. When we got the license back, I persuaded the infringers to pay up.
Selling or licensing your invention to a company is very hard to do for a lot of reasons. I will list some below. I have been trying to do that very thing myself for others and have had no success. I am not that bad at it. But, it is a hard sell.
First, you will have to find someone in the company to champion your invention. Otherwise, approval of your invention will be left to others within the company with whom you will have little contact.
These days, it will be hard to find a champion since most employees are afraid of losing their jobs. If your invention is bought or licensed by the company, and it does not succeed, the champion may lose their job. If it succeeds, the champion’s boss will take credit. Pretty much a no win situation.
Then, there is NIH. No, not the National Institute of Health. The Not Invented Here syndrome. Your invention will be given for approval to the employees whose job is to come up with inventions for their company. Guess what they will think of an invention that they did not invent.
There is a bias in companies towards inventions that are developed in the company.
I know this sounds crazy, but it is possible that the company already has a similar product coming out. Many times inventors go to a company that has a similar product in the marketplace. If they have spent money on the design of a new model, they may not want your invention even if it is better. Also, they already have a product in the marketplace that is accepted and making them lots of money. They want you to dry up and blow away.
As an example, I know of a medical product that was much better than that of a large company. Three nurses designed it. They eventually sold it to the large company which told them that the company would never make their invention (shelf the patent). The company bought the patent to make sure their competition didn’t get it. Once a product is accepted by the medical community, a company is not interested in changing the product since then it will have to resell the new product to the community. The nurses spent thousands of dollars and thousands of hours patenting and selling their invention. They recovered their expenses and minimum wage for the hours in the deal.
Then, there is the crazy inventor complex. Most companies have had to deal with a crazy inventor. That experience has soured the management of most companies on dealing with inventors.
The crazy inventors asked outrageous amounts for the invention, such as, $50M at the signing of the license (up front) and 10% of the sales.
The crazy inventors have sued the companies when a similar product not covered by the inventor’s patent is brought out by the company. Some sue without a patent alleging theft of their idea. You can’t sue on theft of an idea without a patent covering the idea.
The crazy inventors have made a pest of themselves by calling and writing endless inquiries about how the company is doing with their approval process of the invention.
MAKE AND SELL
Why not make and sell your invention?
This is the most costly way to proceed. You will be spending hundreds of thousands of dollars. This is the way you go bankrupt.
FIND OUT FIRST WHY PEOPLE IN THE INDUSTRY THINK ABOUT YOUR INVENTION
If you still want to proceed, file a PROVISIONAL PATENT APPLICATION (PPA) with the US Patent and Trademark Office (USPTO or PTO). The current cost is $65 or $130. Buy Patent It Yourself by David Pressman ($40) and follow the instructions. More explanation is better.
Then after filing the PPA, go to people in the industry, my example, the pet industry, and ask them if they believe that there is a market for your invention. How big a market? Listen to them. They know what they can sell and at what price.
You have only one year to file a Nonprovisional Patent Application (NPA) from the date of you PPA. If you have not filed a NPA by that time, you will never be able to get a patent on your invention.
MORE INFORMATION
Below is a website with a lot of good information about how to try to make money on inventions:
http://www.tenonline.org/art/imi.html
Use Next, Previous and Contents to get to all of the articles.
BE CAREFUL OF THE POTHOLES
Here is wisdom from the 1300s. There are three ways to lose your fortune, wine, women and inventions. By far the first two are the most fun. But by far, the last is the most certain.
FIND OUT FIRST.
I have been in the Invention Business for over 50 years. I have been a patent examiner, a president of a business selling an invention, a patent agent helping inventors, etc.
WARNING INVENTING MAY BE DANGEROUS TO YOUR HEALTH
Inventing will:
Cost tens of thousands of dollars, maybe hundreds of thousands,
Take away thousands of hours from your relationships,
Cause you sleepless nights and other stresses (divorce, loss of a partner, alienation from your children, etc.),
Cause you to have bad health due to the stress and lack of sleep and
May leave you bankrupt.
STARTING
At the start, you have to consider whether your invention will make enough money to warrant the cost of trying to get a patent. If you don’t get a patent, then a big company can copy your design and beat you at selling the invention.
A US patent will cost $10-20,000 in fees and patent practitioner work and take 100s of hours of your time.
You know that your invention will make millions of dollars because a lot of customers will want it.
Everyone calculates the number of customers for their invention by taking, for example, the number of pet owners, 40 Million (40M) as the number of customers for their invention. Then, they guess at how much that they will make or profit on each sale, $5-10. So, they will make $200-400 Million (M) on their invention.
$10-20,000 doesn’t seem so much when you are sure that you will earn $200-400M. However, this calculation is essentially based on no hard facts.
What if most pet owners would not want your invention. Dog inventions are only half of the pet owners. Now, you are at least down to 20M possible customers.
Then, if you are going to make $5-10 on each sale, that represents your profit. In business, a good profit is 20% of the final price of the item. That means that your invention has to sell for $25-50 (20% of $25 = $5).
Anything that sells for more than $9.95 is not considered an impulse purchase which is an easy sell. So, if the sale is not an impulse sale that will drop the number of customers by at least 90% to 2M. Since times are tough for many people (the proliferation of dollar stores), I would think that it might drop the number by 70% to 0.6M.
Inventors are usually sure that they can sell at least 10% of the 0.6M (60,000) customers as a guess for who would buy.
However for you to reach those sales, you have to advertise and get the invention into stores. Advertising and convincing stores to take an invention costs money and time (thousands of dollars and hours).
Suppose you never sold more than 10% (6,000). Then your profit would be $30,000 (6,000 times $5).
So, now that $10-20,000 for a patent is very large and almost all of your profit, and it is paid before you get any profit.
So, you must find out if there are enough customers who will buy your invention or take a chance on blowing $10-20,000.
SELL OR LICENSE THE INVENTION
Why not sell or license your invention to a company already in the pet industry? To do a sale or a license, you still will have to get a patent to sell or license
As an example, the invention that I sell was licensed by a large company. The company could never get the sales above $750,000/yr. The large company could not make enough profit to continue selling the product and gave up the license. That is how I became CEO, by default. We could not afford to hire someone to run what was left of the sales created by the large company. So, I and the Treasurer work for no salary. We get paid through a distribution of the profits on sales and royalties from infringers. Yes, the large company had small companies selling the product protected by the patent. The large company was not in the business of suing the small infringing companies. When we got the license back, I persuaded the infringers to pay up.
Selling or licensing your invention to a company is very hard to do for a lot of reasons. I will list some below. I have been trying to do that very thing myself for others and have had no success. I am not that bad at it. But, it is a hard sell.
First, you will have to find someone in the company to champion your invention. Otherwise, approval of your invention will be left to others within the company with whom you will have little contact.
These days, it will be hard to find a champion since most employees are afraid of losing their jobs. If your invention is bought or licensed by the company, and it does not succeed, the champion may lose their job. If it succeeds, the champion’s boss will take credit. Pretty much a no win situation.
Then, there is NIH. No, not the National Institute of Health. The Not Invented Here syndrome. Your invention will be given for approval to the employees whose job is to come up with inventions for their company. Guess what they will think of an invention that they did not invent.
There is a bias in companies towards inventions that are developed in the company.
I know this sounds crazy, but it is possible that the company already has a similar product coming out. Many times inventors go to a company that has a similar product in the marketplace. If they have spent money on the design of a new model, they may not want your invention even if it is better. Also, they already have a product in the marketplace that is accepted and making them lots of money. They want you to dry up and blow away.
As an example, I know of a medical product that was much better than that of a large company. Three nurses designed it. They eventually sold it to the large company which told them that the company would never make their invention (shelf the patent). The company bought the patent to make sure their competition didn’t get it. Once a product is accepted by the medical community, a company is not interested in changing the product since then it will have to resell the new product to the community. The nurses spent thousands of dollars and thousands of hours patenting and selling their invention. They recovered their expenses and minimum wage for the hours in the deal.
Then, there is the crazy inventor complex. Most companies have had to deal with a crazy inventor. That experience has soured the management of most companies on dealing with inventors.
The crazy inventors asked outrageous amounts for the invention, such as, $50M at the signing of the license (up front) and 10% of the sales.
The crazy inventors have sued the companies when a similar product not covered by the inventor’s patent is brought out by the company. Some sue without a patent alleging theft of their idea. You can’t sue on theft of an idea without a patent covering the idea.
The crazy inventors have made a pest of themselves by calling and writing endless inquiries about how the company is doing with their approval process of the invention.
MAKE AND SELL
Why not make and sell your invention?
This is the most costly way to proceed. You will be spending hundreds of thousands of dollars. This is the way you go bankrupt.
FIND OUT FIRST WHY PEOPLE IN THE INDUSTRY THINK ABOUT YOUR INVENTION
If you still want to proceed, file a PROVISIONAL PATENT APPLICATION (PPA) with the US Patent and Trademark Office (USPTO or PTO). The current cost is $65 or $130. Buy Patent It Yourself by David Pressman ($40) and follow the instructions. More explanation is better.
Then after filing the PPA, go to people in the industry, my example, the pet industry, and ask them if they believe that there is a market for your invention. How big a market? Listen to them. They know what they can sell and at what price.
You have only one year to file a Nonprovisional Patent Application (NPA) from the date of you PPA. If you have not filed a NPA by that time, you will never be able to get a patent on your invention.
MORE INFORMATION
Below is a website with a lot of good information about how to try to make money on inventions:
http://www.tenonline.org/art/imi.html
Use Next, Previous and Contents to get to all of the articles.
BE CAREFUL OF THE POTHOLES
Here is wisdom from the 1300s. There are three ways to lose your fortune, wine, women and inventions. By far the first two are the most fun. But by far, the last is the most certain.
FIND OUT FIRST.