Patents , Where Does an Inventor Start?

Getting an invention off the ground has always been the big question mark for new inventors.
Who do you call? Where do you start? What do you have to do?
Let’s tackle the first question, who do you call. The first fact I will convey to you is WHO NOT TO CALL. Do not call any of the invention scam companies who advertise. You will find their ads on the Internet, TV and radio. These companies prey on first time inventors who don’t know what to do. The companies lure inventors in with hooks such as ‘Free Inventor’s Kit’ or ‘Sell Your Idea’ or ‘Wanted Inventors and Ideas’ and many others. These companies are to be avoided at all costs. All they do is take your money and promise the moon and deliver nothing – Caveat Emptor.
So, who do you call? There are several credible resources to contact.

1. Local Invention Clubs.
2. Patent attorneys (call at least 3 different ones).
3. Local Universities.

Each one of them will give you an understanding of the invention process and help you to make intelligent decisions without spending any money.
The second question above is really the same as the first. You start by contacting the list above.
The third question, what do you have to do will be based on the answers you get from the contacts you have made. Here are some of the first steps.
1. Documentation - write down in a Journal everything that you do. One page per day and date each page. Have someone sign each days page as well (More on that topic in another article).
2. Research – read as much as you can about the invention process before you invest any money.
3. Organize – establish in advance the important information that your new invention idea must answer. Here are some examples:

a. Exactly what is your invention or product?
b. Who will want it?
c. Where and how will they be able to get it?
d. How much money is needed and specifically for what (product development, manufacturing, marketing, distribution, business management costs)?
e. How much does the investor make and when does he get his money back (potential return of investment (“ROI”) and return time frame)?

Make sure you have at least preliminary answers to these questions because that is what will be asked of you from all of the people you will be speaking with during your preparation time.
As you can see - getting an invention started takes lots of planning and leg work. If you do it right you are at least giving yourself a chance to potentially succeed. If you do it wrong such as contacting and/or working with an invention scam company you are doomed to fail.
Copyright © 2009 InventorEducation.com - Helping Inventors One Patent At A Time. All Rights Reserved

INVENTION SCAM COMPANIES AND HOW THEY OPERATE

Many of the invention scam companies advertise on TV, radio and/or especially on the Internet.
These companies promise to protect your invention, present the details of your product to manufacturers, distributors and retailers. They even promote that they represent you at tradeshows and assist in negotiate licenses agreements. They provide these services for an upfront fee.
These companies hire commissioned salespeople whose job is to contact inventors that responded to the advertising methods described above. The truth is that these salespeople care very little about your invention and will say practically anything to get the inventor excited and comfortable with the salesman. The salesmen only want to make a commission. These companies do very little in return for the money you just spent.
The following is the typical process followed by these illegitimate firms.
Step 1 – “The Hook”: The Company runs ads on television or radio offering free information for inventors on how to patent and market their inventions along with a TOLL-FREE number for ordering the material. The material that arrives is typically only promotional brochures about the company. In most cases it includes an invention submission document requesting the inventor to submit their invention in confidence. DO NOT SEND BACK THAT DOCUMENT!
Step 2 – “The Initial Pitch”: The salesperson makes a follow-up call to the inventor and explains the invention process (according to that company’s systems). They try to establish creditability with the inventor and ultimately offer for a fee, to obtain a registered patent attorney or patent agent’s opinion letter and a marketing analysis report for the invention.
This so-called marketing analysis is a complete waste of money. Over 90% of the information included in the report is generic that every inventor receives. Very little information is specific to the invention. They try to bolster the value of the report by including some kind of artwork. The artwork can be a 3D-drawing or even a first draft patent art piece. Regardless of the art medium, the only reason it’s included is to get the inventor excited when they see their invention come to life. It is nothing more than a ploy by the invention company to keep getting more money from you.
The salesperson typically states that if the opinion and analysis are favorable, the company will offer their services for patenting and/or marketing. The salesman tells the inventor that they will send an agreement that will explain and verify everything that the salesman told them. In most cases, the agreement is effectively a contract which describes in very oblique language the terms and conditions of the services which may vary significantly from the terms expressed verbally. Please note that it is always recommended that you consult a lawyer before signing any contract, particularly when you are uncertain as to what it is that you are signing.
In addition, the salesperson may suggest that in order to protect the invention that the inventor should also mail a set of the first set of documents to themselves. It is important to note that this does not protect your invention and is of little practical value.
Step 3 – “The Set-Up Pitch”: The inventor is told that the invention has passed a rigorous screening process and has been selected by the company for development. The company may even provide a “realistic” figure for cash advances and royalties that can be earned by the inventor. At this point, the company asks for an up-front fee for their services as well as a royalty of all further earnings from the invention. In some instances, the company also offers to reduce the royalty in exchange for more up-front money. However, the company does not notify the inventor of any negative opinion letters and the “market assessment” is typically not specific for the invention itself. That is, a market report for a new toothbrush would state how many toothbrushes were sold in North America last year and not identify the likely number of the invention which could be sold. Finally, the royalty rate quoted by the company is likely to sound very reasonable, because the company does not expect to make any money off of the up front fees – all of their profit comes from the royalties.
Nothing is farther from the truth. Rarely if ever does the inventor earn any royalties and obviously neither does the invention company. The company makes 100% of their profits from the up front fees.
Step 4 – “Marketing Services”: The invention company promises to present your invention to manufacturers, distributors and retailers. They even promote that they will represent you at invention tradeshows and assist in negotiate licenses agreements. However, their promotional package typically includes all of the inventions currently being promoted by the invention company and is not directed to any specific field or industry. These packages are sent arbitrarily to companies. Most if not all of the recipients generally discarded these packages because they know they are bogus. Think of this, does a busy manufacturer really have the time to browse through this package? The truth is that most manufacturers dislike these invention companies. They know who the legitimate companies are and will usually only do business with them.
The trade shows at which the invention is promoted (if it is promoted at all) is often a trade show for invention marketers. These trade shows do very little for the inventor but it sounds very credible. The invention company cannot possibly present all of the inventions they have because it would much too time consuming and it never happens that way.
The company may also offer to include your invention in a database and to relay all offers to you and help you in negotiating licenses. As you will appreciate, these services are of little benefit if no one sees the database and no offers are received.
Finally, the company may promise to file a “patent document” to protect your invention. This “patent document” may be: a patent filed at the United States Patent and Trademark Office. However, 90% of the patents offered by the invention company are Design patents. A Design patent only protects the way an article looks and NOT how it works. Therefore, if you have an invention with moving parts and the like and you only obtain a Design patent you actually have very little protection. It is not suitable for most inventions. On some occasions the invention company will provide a Utility patent with claims so narrow, that no effective protection is obtained. Even if the company employs a qualified patent agent or attorney to prepare the documents, it is important to note that the attorney is working for the company and not the inventor.
In closing; there are a number of warning signs that can indicate that the invention promotion company you are dealing with is not legitimate. These include the following:
· Company offers to provide invention assistance or promotion in exchange for large advance fees. If a company says that they make their money off licensing fees, why are they asking for up-front money? Reputable licensing agents rarely rely on up-front fees.
· Company claims to have great records licensing their clients’ inventions. Ask the firm how many clients have made more money than they spent. Ask for names of some representative clients.
· Company promises or assures you that your invention will make money. No one can guarantee an invention’s success.
Remember, once a dishonest company has your money, you are unlikely to ever get it back.

Copyright © 2009 InventorEducation.com - Helping Inventors One Patent At A Time. All Rights Reserved

Inventors – 5 Golden Rules How to Save Your Money

When was the last time you threw $500 or $1,000 away? You would never do that right?

Well it amazes me that new inventors are doing just that everyday, throwing their money away. Here is how and why combined with the 5 Golden Rules to Save Your Money.

1. Never hire an Invention Company.
2. Never get a patent before you evaluate the potential of your invention.
3. Don’t get emotionally involved with your invention
4. Don’t hire the first patent attorney or agent you speak with
5. Again – Don’t hire an Invention Company – (this rule is that important to repeat)

Let’s examine the rules one by one.

First, ‘Never Hire An Invention Company.’ The FTC says that over $300 million dollars is lost to invention fraud companies every year. These companies do absolutely nothing for the inventor. They all sound professional and inspiring but they are shams. The people who call the inventor from these companies are all commissioned salespeople who will say anything to get your money. Do not respond to any of their ads on TV, the radio or the Internet. Avoid the ads that might say ‘Free Inventors Kit’ or ‘We can Get You A Patent’ or ‘Wanted Inventors and Ideas’ and many others. They know how to reel a new inventor into their web.

Second, ‘Never Get A Patent Before You Evaluate The Potential Of Your Invention.’ All too often a new inventor thinks to themselves, “well I’ve got this great new invention and I don’t want anybody to steal it so I better get a patent.” Of course patent protection is important, however, not until the product concept has been proven to be worthwhile. It is estimated that over 90% of the patents issued to date are for products that have never made it in the marketplace. Time and money have been spent on legal protection prior to discovering if the invention really has any value. A professional evaluation on the invention before patent protection would help the inventor to save the costs of a patent if the evaluation proved the invention concept was not worth the time, effort and costs. At the least, an evaluation would allow time for the inventor to improve upon the areas within the invention cycle to boost the potential of the invention. Once the improvements are made then you can start the patent process but not before.

Third, ’Don’t Get Emotionally Involved With Your Invention.’ Let’s face it an inventor is usually a creative and passionate person. We all believe very strongly in our invention idea. We are told by others that it’s a great idea and we are sure it will make us rich. Inventors are generally driven by the potential to make a lot of money. Now don’t get me wrong, I am not saying that making a profit on our invention is a bad thing. It’s actually a great result. I wish more inventors would succeed. However, one big negative element to an inventor’s failure is not knowing when to stop or give it up. Professional poker players for example know when to hold them and know when to fold them. Their chances of success are greater when they understand the risks if they choose to continue. The new inventor unfortunately does not have the same business type of approach to their project. They treat their invention idea as their baby, their road to financial success without knowing risks or even understanding the process. That is why over 90% of the issued patents are not making money for the inventors. You must separate your emotions about your invention and treat it as a business.

Fourth, ‘Don’t Hire The First Patent Attorney Or Agent You Speak With.’ Patent attorneys are an integral part of the invention process. They will provide all of the legal expertise required to obtain a patent for the inventor. It is safe to say that most patent attorneys are credible and professional. The down side for a new inventor is not knowing exactly what it is that the patent attorney will be doing for them and at what price. There are no set price structures from patent attorneys. They can charge what ever they feel their value is for the inventor. The only set prices are from the United States Patent and Trademark Office. An inventor should interview at least 3 different patent attorneys to ultimately select the one that they are most comfortable with. Here is a short list of what an inventor should ask the patent attorney.

1. Do you specialize in my products field of development?
2. How much will a patent search with a legal opinion of patentability cost?
3. How much will the entire patent process cost including government fees?

These are just some of the important question need answers to at your initial meeting. If the patent attorney does not provide specific answers, move on to the next.

Fifth, ‘Never Hire An Invention Company.’ If you want to be a statistic with the FTC or the United States Patent and Trademark Office then by all means hire a scam invention company. If you want to save your money and put it towards a more realistic approach for your invention idea stay away from these companies. Do not call them. Do not write to them. Do not waste your time with them. This subject is that important to have repeated as I have done.

Getting rich from your invention is a direct result of saving your money while going through the invention process. By following the 5 golden rules above you will effectively limit your risks while increasing your potential rewards. You must understand that the risks are still very high in the invention game. You just want to be able to know when to hold them or when to fold them.

Copyright © 2009 InventorEducation.com - Helping Inventors One Patent At A Time. All Rights Reserved

Licensing Agreement Checklist

Licensing Agreement Checklist

Licensing a new invention is a detailed undertaking. There are experts who specialize in the actual negotiations on behalf of the inventor. Usually these experts will negotiate for either a flat fee or a percentage of the royalties the inventor will make. These experts are well worth their fee if you choose to hire one.

On the other hand, some inventors choose to negotiate on their own behalf. We do not recommend this approach, however, if you really do want to negotiate your own licensing agreement we have developed a checklist for you to follow.

This list is not comprehensive, but is intended only as an indicative checklist for those intending to license their inventions. In practice, you should check each invention on a case-by-case basis and take account of the prevailing circumstances when drawing up the agreement.

• Introduce the Parties and your basic Objectives
• Specifications
• Object of licensing agreement
  • Type of license seeking (exclusive or non-exclusive)
• Industrial property rights pertaining to the object of the agreement
• Scope of license
  • authorized exploitation methods
  • geographical scope
  • any restricted application areas
  • authorized period
• Changes, further development and improvements to the licensed technology
• Obtaining and maintaining industrial property rights
• License payments
  • one-off payment
  • initial payment
  • royalty
  • minimum annual royalty
• Bookkeeping obligation, inspection rights and reporting
• Obligation to exploit
• Authorization to sub-license
• Technical assistance and training
• Confidentiality
• Compensation for damage
• Limitations of liability
• Enforcement of industrial property rights
• Action against infringements of industrial property rights
• Invalidation of industrial property rights
• Official approvals and permits
• Manufacture of competing products
• Rights of notice and cancellation
• Implications of ending of contract
• Period of validity
• Transfer of contract
• Force majeure
• Invalidation of contract in part
• Notifications
• Applicable law
• Resolution of disputes

Keep in mind that there are additional factors that may contribute to your specific invention. Therefore, if you have negotiated on your own behalf, it is highly recommended that you at least show the licensing agreement to an attorney familiar with the licensing process. This will at least provide you some protection and possibly catch something in the agreement that you are/were not aware or familiar with.

Copyright © 2009 InventorEducation.com - Helping Inventors One Patent At A Time. All Rights Reserved