Patent It Yourself - PDF Archive

314 | Patent it YOURSELF
of interest from the company, you will probably be faced
with the waiver question. My comments in the previous
discussion cover how to handle this problem. Before you
send a model, get an advance written commitment from
the company that they’ll return it within a given time.
You should send your model by certified, insured mail,
return receipt requested, and make follow-up phone calls as
appropriate. The book, Made to Stick, by C. and D. Heath,
tells how to compose a “sticky” message—one that the
recipient will remember. The key is to present your message
as a simple unexpected, credible, concrete, and emotional
story.
I. Making an Agreement to
Sell Your Invention
If you sell your invention to a manufacturer/distributor,
the next step is to sign an agreement of some sort with the
manufacturer. The question thus arises, what will be the
terms of the agreement, exactly what will you sell them,
and for how much? There are many possibilities. These are
covered in Chapter 16, which deals with ownership and
transfer of patents rights.
J. Manufacturing and/or Distributing
the Invention Yourself
For reasons stated earlier, manufacturing and/or distributing
a product embodying your invention yourself—unless you
already have manufacturing experience, a plant, and/or
distribution facilities—is very difficult. Besides, you can
spend your time more effectively selling your invention or
patent application, rather than dealing with manufacturing
and product- marketing problems.
If you do plan to manufacture and/or distribute your
invention yourself (Routes 6 or 7), I strongly suggest that
you learn about the subject thoroughly beforehand so you
will know what is involved and which pitfalls to avoid. The
best place to obtain literature and reading material is your
local SBA (Small Business Administration) office, which has
scads of literature and aids available to apprise you of the
problems and pitfalls. They even have a service that allows
you to obtain the advice of an experienced executive free;
ask for a “Counseling Request from Small Business Firm”
form. Nolo publishes an excellent book, How to Write a
Business Plan, by Mike McKeever, which tells potential
businesspeople how to assess the costs of a proposed
business, how to draft a business plan, and how to obtain
sufficient start-up money.
1. Financing the Manufacture of Your Invention
Financing any manufacturing venture of your own is a
separate and formidable problem. If you have an untried and
unsold product, most banks will not lend you the money to
go ahead. However, if you can get orders from various local
firms, the bank may lend you the money. Thus a local testmarketing
effort on a limited scale may be desirable.
For obtaining money to finance untried products,
read, All I Need Is Money, by Jack Lander (Nolo), for a
good treatment of this subject. Generally you’ll need a
money lender who’s willing to take risk. Such a person is
usually termed a “venture capitalist” (VC). A VC will lend
you money in exchange for shares or a portion of your
enterprise. Pratt’s Guide to Venture Capital Sources (listed
in Appendix 2, Resources: Government Publications, Patent
Websites, and Books of Use and Interest) is the most popular
source of VCs, but most libraries have other VC resources.
A comprehensive list of venture capital resources and
related information can be found at the Venture Capital
Resource Library (www.vfinance.com) and at Clickey.com
(www.clickey.com) where you should search using the term
“venture capital.” Also the Venture Capital Hotline, 408-
625-0700, will provide you with a list of suitable VCs for a
fee (about $75). However, VCs won’t lend you money on the
same terms a bank would. Because of the higher risks they
take, they demand a much larger return—namely a piece of
the action. Also, they’ll want to monitor your company and
exercise some degree of control, usually by putting their
people on your board of directors. A thorough discussion
of the pros and cons of working with venture capitalists
can be found in the Nolo book, How to Write a Business
Plan, mentioned earlier. While most VCs are companies
or partnerships, sometimes wealthy individuals finance
inventions, so if you have a rich uncle or know of a suitable
patron, include them on your list.
A recent development in the VC field is the “Incubator
VC.” This is a VC that provides several different inventors
with offices, labs, and/or a manufacturing area in a special
building, called an “innovation center.” For example,
in San Francisco, Pier 38 provides space for numerous
incubators. Also the VC may provide technical, financial,
and marketing consultation, as well as other services, until
each nurtured enterprise is ready to leave the “nest.” The
sources in the preceding paragraph, as well as inventors’
organizations (Chapter 2, Section F), will give you the
names of Incubator VCs; they are sponsored by academia,
state and federal governments, and private organizations.