Ideas Are the Forerunners of Wealth
According to leading experts, the rise in patents represents a long-term shift in what Americans do, suggesting that R&D for non-manufacturing industries is growing at a faster pace than manufacturing industries.
Additionally, studies indicate that money spent on research and development is not rising as fast as the number of patents filed. At a micro-level, small startup inventors in the United States grapple with the fruits of their invention: How to make money and profit from their ideas?
Typically, an inventor must evaluate, as Forbes puts it, his “inventing personality” and pursue one of two options to generate profits: Licensing or create a business to produce, market and sell the invention.
In most cases, licensing is the most natural path to follow, allowing you to either collect royalties or sell the idea outright. This decision is also influenced by the nature, scope, cost and intent of your invention across a range of industry sectors.
As Forbes put it, “A license is simply an agreement in which you let someone else commercially use or develop your invention for a period of time. In return, you receive money–either a one-time payment or continuing payments called royalties.”
In this case the licensee assumes all the business risk of taking the product to market AND protecting it from patent infringers. You, the inventor, simply collect quarterly royalty checks. At this point, you may be wondering why you shouldn’t file for patent independently, what is often referred to as a DIY patent, and activate cash-generating licensing deals.
Well, you could, but you need to bear in mind that statistics show that only 13% of inventors who attempted to license their invention were successful. This is where a specialized board certified patent attorney is a critical partner in helping you plan and extract value from licensing and monopoly rights associated with your patent filing.
It is a complex, often confusing process, that has been the ruin of many an inventor who has attempted to walk down this path alone. Those with a stronger entrepreneurial bent may decide to form a manufacturing business and build distribution channels and generate larger profits, albeit with much higher associated operating risks. Success on this path will depend on your sales skills in multiple channels. Youwill need to persuade investors, bankers, distributors and clients to buy into your Unique Selling Proposition.
If you consider yourself a risk-taker, a great manager, and possess a penchant for securing financing this option may be enticing.
The complexity of this approach, however, depends on working with an experienced patent attorney who can use decades of experience to help you avoid common mistakes and pitfalls as you build your empire.
Prevention, rather than cure, is a key operating philosophy of any expert patent attorney and he will put this to good use as you file, market and attempt to profit from your invention. In both approaches outlined above, it’s imperative you protect your idea FIRST and begin structuring a long-term plan to profit from your invention.
A board certified patent attorney is an indispensable partner in helping you achieve success in this complex arena. If you need help, please read more about me here.
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