Patent It Yourself - PDF Archive

306 | Patent it YOURSELF
B. Overview of Alternative Ways to
Profit From Your Invention
As you can see from the chart of Fig. 11A, there are seven
main ways or routes for the independent inventor to get an
invention into the marketplace and profit from it—Routes 1
to 7. These choices involve increasing difficulty and work for
you. Before we go on, I recommend you study this carefully
to become familiar with the various possible routes to
success. I also recommend that most inventors use Route 3,
and have accordingly highlighted this route.
1. Route 1: Using a Contingent-Fee Intermediary
Some organizations that market or develop inventions
for inventors are legitimate and honest. Many others are
illegitimate and dishonest; they exist solely to exploit
inventors, regardless of the harm caused. There is an easy
way to tell the difference. Virtually all of the dishonest
ones require up-front money before they will undertake
to develop or promote your invention. Virtually all honest
ones represent you on a contingent fee basis and do not
require an up-front fee. In this section, I will discuss
dealing with honest contingent-fee invention brokers
(CFIBs) and will advise you regarding the up-front-fee
types, which I call FBIEs (Fee-Based Inventor Exploiters).
Starting at the top, Route 1 involves getting a contingentfee
invention broker or intermediary to find a suitable
manufacturer/distributor for you and then using the broker
to represent you in the sale or license of your invention.
Don’t confuse a CFIB with fee-based “invention
developers,” “invention promoters,” and the like: A CFIB
is a firm that will represent you and try to market your
invention by selling or licensing it for a percentage of your
rights, the “contingent-fee basis.” Unlike the dreaded feebased
inventor-exploiters (or FBIEs; see “Don’t Use a Fee-
Based Inventor-Exploiter,” below) CFIBs do not charge a
fee for their services. They are generally considered to be
reputable, honest, and provide a legitimate service for a fair
form of compensation.
Obviously, Route 1 is the easiest possible path, since the
CFIB will do all of the work for you. However, it’s neither
that difficult to find suitable manufacturer/distributors
(Section D, below) if they exist, nor to present your invention
to them once you locate them (Section G, below). Thus,
I recommend that you consider handling this task yourself.
No one can sell an invention as sincerely and with as much
enthusiasm and conviction as you, the true inventor. Also,
you’ll get 100% of the benefits and won’t have to share the
fruit of your creativity with a salesperson. Finally, companies
will respect you more if you approach them directly; if you
approach them through an intermediary, they’ll think less
of you and your invention. Why? They may think that you
don’t have the ability or initiative to approach them yourself.
If you do use a CFIB, you should be concerned about two
main possibilities for harm:
1. loss of your invention rights through theft or
communication to a thief, and
2. loss of time and hence other opportunities.
The first possibility isn’t great because you’ve already got
a patent application on file. However, the second possibility
is very real, and you should accordingly verify the efficacy
of any CFIB beforehand. Unfortunately, about the only
surefire way to do this is by word-of-mouth. Check with a
patent attorney, an inventors’ organization, or some of the
CFIB’s clients if your own associates are unable to provide
you with a lead.
Once you’re satisfied with the CFIB’s honesty and
references, you should next investigate the contract they
offer you to be sure you don’t lose time needlessly. Thus,
the contract should specify that the CFIB will perform
substantial services, such as identifying the prospective
manufacturers, preparing an invention presentation
or demonstration, building and testing the invention,
submitting your invention to the prospects, negotiating a
license or sales agreement for you, etc. And most important,
the agreement should set a time limit for the CFIB to
succeed—that is, get you a firm offer to buy, license, or get
your invention on the market in product form. I feel that
a year is reasonable; 18 months is about the maximum
you should ever consider. Make sure that if the CFIB fails
to succeed in the allotted time, all of your rights will be
returned to you, together with all of the CFIB’s research,
presentation documents, models, etc.
Some organizations that claim to be CFIBs
include AmericaInvents.com, BigIdeaGroup.net,
InventorsPublishing.com, Innovation Village (www.
innovationvillage.com), and Natwich LLC, (www.natwich.
com). In the medical field San Francisco Science (www.
sfmed.com) develops medical technologies. ThinkFire.
com (www.thinkfire.com) specializes in patent brokerage
and licensing. However, before you engage any of these
companies, please be sure that they will not charge you
an up-front fee and that any contract they offer you is
fair. I strongly recommend against paying an up-front
fee because any organization that charges an up-front fee
is an FBIE. You can find other CFIBs through inventors’
organizations. (For a listing of inventor organizations, go
to www.InventorsDigest.com/connect/orgs.html.) Also,
when negotiating license agreements, attempt to have all of
your royalties sent directly to you (and the CFIB’s portion