Why would you sell your own invention?
Initially, anyone who thinks they have invented something has to clearly evaluate the actual state of their invention: is it just an idea; a self-made prototype, or already a manufactured product for which they are seeking local or overseas distribution?
To be honest, that should be your second thought. Your first thought should concentrate on patent licensing, because regardless of what it is, it is your intellectual property. Your intellectual property has monetary value for a simple reason- you can sell it for a profit.
Why would you sell your own invention? The reason is quite practical. By selling your invention, idea or self-made prototype you take away the considerable pressure of finding and investing start-up capital into the processes of product evaluation, licensing, manufacturing, packaging, distribution, promotion, and so on.
You can first pay a relatively small amount to have your invention evaluated in regard to: operational performance, licensing potential, market competitiveness, manufacturer’s acceptance, and so forth.When the evaluation is completed and finds your invention clearly has potential to perform, it is time to proceed with actual patent licensing. This is a very important time to concentrate on the legal issues associated with your invention.
As is normal accepted practice, you will be looking for a royalty payment, and rightly so – you are the inventor. The royalty payments are usually paid in advance of the first year’s royalty. It is very important for you to also establish an ongoing yearly minimum royalty performance thereby giving you security for further development of your invention whilst removing the opportunity for the company to which you are selling the rights to your invention, to put it in a safe and leave it hidden there to remove it from competition. One of the most important legal issues is to make sure that you, as an inventor, are insured or indemnified by the client company against damages in case a consumer of an actual product is injured. You must also secure the right to an independent audit in case you suspect unfair distribution of the royalties.
As you can see, with so many legal complications, you are better off to find a professional company that will properly evaluate your invention and then proceed with patent licensing for you. To protect yourself and your invention, you must ask the client company you choose to sign a “Nondisclosure or Confidentiality Agreement” for your own peace of mind. The actual evaluation report is very inexpensive, around $200 dollars, and is even less than a professional marketing report. The ongoing payment to a company that takes on a licensing process for you should be no more than 30% of actual revenue. If such a company asks for more than 30% without substantial reason, it is grossly unfair, and you are better off to find a different company to deal with.
Before the actual process of licensing commences, the company that offers to represent you will ask you to sign a licensing representation agreement detailing the terms and conditions of the ongoing relationship between you and the company that will represent you in the licensing process. Depending on your invention’s complexity, and the ability and capacity of the company that will now represent you, it will take between three to eighteen months for completion of the patent licensing. However, it will save you a lot of headaches and will better protect you legally.
We can only wish you good luck at this stage and advise you to carefully shop around before you submit your invention or idea to a specialist licensing company.
My warmest regards,
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