Posts Tagged: "famous inventors"

Just because getting a confidentiality agreement is difficult doesn’t mean that you shouldn’t try. There are those out there that are used to signing confidentiality agreements, such as manufacturers and engineers who you might need to work with to create engineering drawings or a prototype. Whenever you are showing your invention to someone within your industry or to those who would have the technical knowledge and ability to move forward with your invention without you, a confidentiality agreement is both essential and more likely to be obtained. Just don’t expect investors or potential licensees to be all that interested in signing a confidentiality agreement , at least at first. However, if they like what they hear it is not unheard of that at some point they might be willing to sign a confidentiality agreement. So there is many times a delicate dance where you show a little to entice the reluctant signer of the confidentiality agreement. As interest builds they may become more willing to sign.

As any viewer of “Shark Tank” can attest, the variety of financial arrangements which are negotiated between inventor entrepreneurs and investors is broad. A final agreement is always the result of negotiation between the two parties. Unfortunately, many inventors go into the gunfight with a knife, so to speak, over-matched and under-prepared.

As the girl in the fairy tale ruefully remarked, “You have to kiss a lot of toads to find a prince!” Raising capital is not much different and is often a difficult, tedious, and frustrating process. You might find it helpful to approach family, friends or even patent monetization entities. Patent monetization entities, derogatorily referred to as “patent trolls,” are companies whose business is the ownership of intellectual properties and the aggressive enforcement of their rights against those who infringe upon their patents and copyrights. A PME is similar to an investment manager who owns a portfolio of market securities, a real estate investor who owns apartment houses and commercial buildings, or the estate of Michael Jackson who purchased a 50% stake in more than 750,000 copyrights including 251 songs that John Lennon and Paul McCartney wrote for The Beatles.

To raise money to get your product to market, you must be able to logically show that it will generate sales volume in the short-term and survive competitor reactions to a new market entrant. A marketing plan is a critical component of your business plan and illustrates to investors that you are a practical businessperson who understands that a good, even superior product is only the first, and not necessarily the most important, component of a successful product launch.

To review, the law recognizes that with many, if not most, inventions there will be three steps to the invention process. The idea comes first, followed by the game plan, followed by the reduction to practice. When dealing with some inventions the idea, game plan and reduction happen rapidly. With other inventions there is some time between these steps. As you go along the way your invention will take shape and become more tangible and identifiable. As that happens you very well may have an invention that could be patented. At some point you will need to do a patent search. I am a fan of inventors doing their own preliminary searches, not because you are likely to find the best prior art but rather to educate yourself and learn. The more you understand the better inventor you will become.

There are many different reasons why building a better mouse-trap is only the first of many steps on the road to financial freedom. First, there is no guarantee of financial success given by any patent office in the world. This is true even if you have a strong patent that covers a great product that enjoys robust consumer demand. Unfortunately, many inventors operate under the misunderstanding that getting a patent is like owning Boardwalk and Park Place in the popular board game MONOPOLY. The truth is that turning an invention into cash is much more complicated than simply placing hotels on Boardwalk and Park Place. Yes, a patent is an essential ingredient because without one you have no right to exclude competitors from engaging in competitive activities, but you must treat inventing as a business if you want to truly be successful.

It is possible to succeed even starting with a limited budget, but you really do need to plan ahead and develop a strategy that makes sense within your resources and one that doesn’t invest unnecessarily or recklessly. This conserves resources in a responsible way, while still laying the ground work for obtaining the benefits and protections offered by the patent laws. The nightmare scenario you need to avoid is spending to much on any one invention that winds up going nowhere. If this happens you not only lose what you invested, but you also potentially lose valuable funds that could be used to pursue the next great idea you have. Over the years as I have worked with inventors and musicians what I have learned is that creative people are rarely, if ever, only going to create once.

Getting professional patent illustrations or engineering drawings is certainly helpful, but there is simply no substitute for having a working prototype. Unfortunately, prototypes cost real money. Even though costs have dropped over the past few years thanks to new technologies, the prototype stage is where inventors start to really burn through cash at an alarming rate. For example, if you build an expensive prototype and then need to make a change because it didn’t work so well that means building another expensive prototype. That being the case wise inventors push off an expensive prototype as far into the future as reasonably possible. Instead consider starting with a 3D model, which is much less expensive than a prototype. 3D modeling starts to bring the invention into focus and really can allow you and prospective licensees and partners to envision the invention in a meaningful way.

The attack on individual inventors using names like NPEs and patent trolls is nearly identical to the attacks previously waged by corporate America on personal injury lawyers, using the McDonald’s hot coffee case as an example of lawyer abuse (now it’s the Wi-Fi patent cases). Like the corporate attacks on everything from the private enforcement of securities fraud claims to unfair business practice, civil rights and age discrimination claims, the new target is patent infringement claims brought by “boogie man” entities that don’t manufacture products.