Thank God there are inventors. I have a great respect and admiration for people that come up with unique and novel solutions to the problems we encounter in our lives. Imagine what it would we be without them? We’d probably be still stabbing animals with sticks and eating the meat raw. I believe that inventors should be richly rewarded. Sadly though,, many of these great ideas never get commercialized. Why is it that we only see a small fraction of these inventions being manufactured and presented in the marketplace? In most cases it’s not because these new inventions were poorly designed or that they didn’t work. In many cases these discarded ideas had the potential to vastly improve our lives.
How To Sell or License Your Invention Using a Licensing Agent – Part 1
Sell or License Your Invention Using a Licensing Agent- Part 2
Why are so many great ideas being thrown out, discarded and never being appreciated and enjoyed like they deserve? In most cases, it’s because inventors are terrible at promoting and marketing. In addition, they would fail nine times out of ten if they tried to launch or run a business to manufacture and sell their invention. Now I want to be very clear, I don’t think it’s their fault. It’s just that promoting and marketing requires someone with a completely different set of talents, personality traits and skill sets. What makes a good promoter is often diametrically polar opposite of what makes a good inventor.
What is the solution to getting more inventions made and sold? Many inventors, have taken inventory of their strengths, and have come to realize they have weaknesses. For example, for many inventors, the mere thought of making cold calls, visiting potential prospects or giving product demonstrations will make them feel physically ill. For these inventors, if it was required that they promote or market their invention, it would never get done. So what is the solution? For many, the key to solving this problem is to team up with someone that thrives in the marketing environment. This is where the product promoters or licensing agents come to the rescue.
Now there is a important step you must take before you show anyone your invention. This is especially true if you don’t yet have patent protection. You need to have any person who you plan to show your idea to, to sign a document called a “Nondisclosure Agreement”. This is a legal document that prevents them from disclosing your invention. It also prevents them from developing your invention for their own benefit without your permission.
Now this is a good a time as any to warn you that there are lots of sharks out there ripping off investors. Beware of the invention marketing companies. They usually place adds on the television, radio, magazines and newspapers. In most of their adds, they will offer a 1-800 number for inventors to get free information about patenting and marketing their inventions. if you encounter any company that claims to take an idea completely from an idea to the marketplace, they are a scam. Avoid them at all cost!
There are three broad groups that you’ll want to consider when you are ready to commercialize your invention; licensing agents, product scouts and potential licensees. Licensing agents are professionals that promote inventions to companies that are well positioned to bring them into the marketplace. Product scouts are individuals that work for one or more companies that are seeking new products. Potential licensees are companies that may be interested in purchasing your patent outright or obtaining a license to use your invention.
It is important to discern if you are dealing with a legitimate licensing agent. Good licensing agents operate very differently compared to the scam marketers. Most legitimate licensing agents don’t advertise their services. You’ll never see then giving sales pitches to inventors. A good agent will turn down more inventions than what they accept to promote. Unlike the scam marketing companies who’ll take on almost any idea, most legitimate licensing agents specialize in a particular market niche. Instead of giving universal rosy predictions of future profits, genuine agents will tell inventors if there are potential issues that could prevent their invention from being marketable.These agents will also provide you with a list of satisfied clients.
Another telling feature of a legitimate licensing agent is that their remuneration is based on a percentage of the profits, not from fees charged up-front. Now, it’s important to be aware that some genuine agents may offer to evaluate the marketability of your invention. However, if there is a fee, it is usually a few hundred dollars and the report will contain in depth and genuine market research.
Once you have secured licensing agent’s representation, with a document called an “Agent Agreement”, they’ll take your invention on the road. This will involve demonstrating your invention in corporate offices, at trade shows and in conventions. When a deal is struck with a company, the company will license your invention and pay you royalties. In most cases, the licensing agent will receive 25-40% of the income generated from the license.
Another important thing to know when you’re dealing with a licensing agent, is that in most cases the “properties income” is sent directly to the agent. After deducting their percentage of the income, the agent pays the remaining sum to the inventor. This is the normal way things are done. However, if you are uncomfortable with this arrangement, you can suggest that properties income be held in an escrow account.
Now I’m sure most of you are in disbelief when you found out that an agent gets such a high percentage of the income. Well, welcome to the real world. Licensing agents don’t come cheap. Unfortunately they are often the only ones with the key to the door to potential licensees. Many companies don’t want to deal with nonprofessionals. As a result, they are reluctant to talk directly to inventors. So you have to ask yourself is it better to get a smaller percentage of something rather than a hundred percent of nothing.
Now for all you neophytes out there, there is an important thing that you must know before you attempt to approach licensing agents, product scouts or potential licensees. Unless you have a prior relationship, these professionals and companies will rarely get involved with concepts that are still in the “idea stage”. What these entities are really looking for are fully-developed patented inventions with concrete market research that substantiates its marketability. Keep in mind that a genuine licensing agent or product scout will need to invest a substantial amount of time, energy and money to promote your invention. As a result, they will not want to deal with an inventor who thinks he has an idea that will make millions of dollars.
How do you find a genuine licensing agent? One source is to ask other inventors who are using an agent. See if they are happy with them. Has this agent successfully licensed their inventions? If so, ask your inventor friend for a referral. Asking for a referral from an already existing client will have a much better chance of success than just calling an agent out of the blue.
Another good way to find a licensing agent is to contact companies that operate in the field of your invention. Like I mentioned before, many companies prefer to deal with professional agents rather than individual inventors. If that’s the case, they will sometimes give you a list of agents with whom they deal with.
Other avenues to pursue for finding a licensing agent are trade shows and conventions that are related to the field of your invention. Occasionally they will be presenters at the show. They may have a booth where they are presenting another inventor’s invention. Check the trade show or convention brochures. In these materials, look for the index of attendees. Licensing agents may be listed as product representatives or product developers. Another source of potential licensing agents are trade publications. Look for an annual index of people that operate in the particular field that your invention pertains to. Often agents are included in this index.
One good way to find a licensing agent or a product promoter is to pitch your invention on IntellectualPropertyStore.com. This listing site can be used to showcase your patent to hundreds of licensing agents and product scouts that are scanning this site daily for products they may be interested in promoting. These professionals have major industry connections. So if you want to get your invention in front of the decision makers that can turn your idea into a reality, then decide to showcase it in IntellectualPropertyStore.com today!
IntellectualPropertyStore.com also attracts thousands of people and companies that are actively looking for new business opportunities. Many of them are very interested in intellectual property that can be commercialized and turned into a thriving business. Instead of making cold calls and knocking on company doors to find these people, why not let them find you! When you place a listing on this site, you can use narratives, pictures and movies to pitch the commercial marketability of your patent. This is a very powerful and timesaving way to sell or license your patent.
When you have a valuable patent, another option you can always consider is creating your own company to manufacture and sell your invention. If you are considering this option, I would strongly recommend that you check out NewBusinessCreator.com. This website will give you the information you need, to create a successful business. It also serves as a portal to a number of affiliated listing sites that enable you to obtain the capital, human resources, materials and marketing systems that will be required make your dreams a reality.