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Okay, maybe fighting is the wrong word. But if you want to become a professional inventor, you need to plan ahead so people end up paying you.
Once, when speaking to a group of startups in Australia, someone asked, “How do you know so much about intellectual property given that you’re not a patent attorney?”
Very simple! It’s called Survival 101. When I finally had a big idea that was producing a lot of income, I concentrated on how I was going to protect it so that I would keep getting paid. That’s why I ended up with a portfolio of more than 20 patents related to the same packaging innovation. The packaging industry is cutthroat. People will go to war over half a penny! And they’ll do whatever they can to work around you. So, I taught myself how to protect myself with intellectual property, including non-disclosure agreements and trade secrets.
Another priceless experience was suing one of the largest toy companies in the world, Lego, for patent infringement. After three long years, I watched our attorneys duel over just two words in federal court in San Francisco. Two words! For a patent to truly have value in the market, I discovered, it must include manufacturing knowledge and workaround language. Perhaps even more importantly, I realized I had let my emotions get the best of me — and that moving forward, I would do everything in my power to avoid getting into the same costly situation.
So, what is the key to getting paid as an inventor/entrepreneur/product developer? Perceived ownership. I don’t believe any of us ever really own anything. That said, absolutely there are things you can do to ensure you profit from your creativity.
It all starts with doing your homework and making preparing for pitfalls part of your go-to-market strategy.
If you’re pursuing a licensing agreement for your invention, get ready to answer hard questions from potential licensees about why they should pay you. To help you navigate selling at retail and online, it’s critical that you make sense of the current laws and practices governing intellectual property. (Negotiating a licensing agreement with an inventor-friendly company isn’t much of a battle; rather, you’re just working out some of the details.)
If your product is successful, copycats won’t be far behind. The way I see it, it’s pointless to view copycats in terms of right or wrong or fairness. It’s called competition. With intellectual property, it is wise to keep in mind that here are no black and whites and no guarantees. I cannot stress enough that these are tools, not strategies in and of themselves.
The good news? There’s never been a better time to become a professional inventor. There are more places to sell products than ever before and more resources available to help creative people than have existed at any other time on the planet. Open innovation — the phenomenon in which intellectual property flows in and out of companies — is the dominant paradigm.
With that in mind, these are my tips for you to fight the good fight — and get paid regardless of whether you have any intellectual property. And if this sounds like a lot? Well, it is. Choose not to be intimidated. Education is key to your success.
1. Do your homework. Know your point of difference in the marketplace. Study the landscape of similar products closely so you are able to explain how your product is different and needed. Creating something new, different, or even just an improvement on a simple idea is important. Don’t waste your time on product ideas that are not marketable.
2. Familiarize yourself with the prior art, aka patents that describe similar inventions. Prior art exists for everything. What’s important isn’t whether or not there is prior art; it’s how well you understand it and are able to use that knowledge to your advantage. Because when you understand the landscape of prior patents and are able to clearly identify your point of difference, it’s easier to convince potential licensees why they should license your invention from you. When someone inevitably asks you about the prior art, you can respond confidently: “Yes, this patent will issue, and this is why.”
In reality, no one knows for sure. Don’t dread or fear this line of inquiry. Instead, turn it into a selling point. People will always question your intellectual property. Expect this!
3. File a provisional patent application that truly has value in the marketplace. This requires that you understand potential issues regarding manufacturing, which is often extremely valuable. You need this information to get your product to market. Include the most efficient way of making your technology in your application.
To help you come up with variations, try stealing your invention from yourself.
For a simple improvement to an existing product, a well-written provisional patent application gives you enough perceived ownership to get a licensing agreement. You and/or your licensee have the option of filing a non-provisional patent application moving forward.
Consider filing a design patent to beef out your portfolio. If your product has to look a certain way, and copycats will copy you exactly, a design patent (which is relatively affordable compared to a utility patent) could have big value.
4. Create marketing material that is enticing. The most effective sell sheets grab the viewer’s attention by focusing on the benefit of the item. Hire a professional to help you design yours; this is money well-spent. It’s not easy coming up with a one-line benefit statement/value proposition that is crystal clear and impactful.
Your marketing material will be shared with retail buyers and other employees. When executed correctly, it creates its own demand.
5. License to an inventor-friendly company that has a history of working with independent inventors. This is the best protection you can have to get paid because speed to market is still paramount. These companies need and value your contribution. And if by chance you are able to license to a market leader, they will be able to police copycats based on their relationships with retailers.
Focus on companies that have the right distribution channels. Make sure you understand how and where their products are sold. This allows you to potentially carve out areas for other licensing opportunities based on where they’re weak.
6. Negotiate a strong licensing agreement, meaning one that has minimum guarantees and other types of performance clauses. If they don’t live up to their side of the contract, you need to able to get out. That’s where performance clauses come into play. Do not negotiate your own licensing agreement, especially the first time. Instead, work with someone who has negotiate many licensing agreements and truly understands the business terms.
Then, at the very end, bring in a licensing attorney to make sure you haven’t missed any of the fine details. This way, you control the negotiation process and are able to begin building a strong relationship with your licensee
7. Trademarks. Sooner or later, your product will have a name and need to be protected. If online sellers decide to copy you, they will most likely copy the name of your product. If you own the trademark, it will help you stop them.
8. Copyrights. This is such an affordable and powerful tool (along with the trademarks) to stop online sellers stealing your images and imitating your brand.
9. Build an army of raging fans. Today, it’s not about suing people. The patent system is broken; to a certain degree I think it always has been. What I mean by that is, patents are just words — words that can be interpreted differently by a patent examiner, a judge, and a jury. To me, pursuing infringement in court is a losing battle. Your time and effort will be better spent shouting your story from the rooftops. Let everyone know: This is your creation! Telling your story well requires planning. Document your journey with imagery and words and approach podcasts, television, radio, YouTube channels, and more about your achievement. You have a voice — use it.
I also recommend making customer service a priority. When a knockoff appears, your fans will let you know. Some of them will even come to your defense.
Knocking off an inventor gives companies a black eye. A retailer’s brand is damaged by carrying a copycat.
10. Create demand. The easiest way to license an idea with or without intellectual property is by creating demand. You can create demand by showing your sell sheet to retailer buyers and distributors. Would they carry your product? A yes demonstrates that there is business to be had. Smart companies know it’s not about protection, it’s all about selling. So, sell first and fast.
11. Trade secrets. They can be very powerful. All the little details about manufacturing your product you discover along the way add up to trade secrets. Don’t disclose any of this information before there is a strong non-disclosure agreement (NDA) in place.
12. Manufacturing quotes. Understand how your product can be manufactured, the cost, and pricing structures within different industries. This information gives you leverage to cut better licensing deals.
13. Proof of concept. Building a prototype that works and demonstrates your product is a powerful tool that you can use to leverage a higher royalty rate and convince the company to move forward. It also helps you file stronger intellectual property because you know what works and what doesn’t work.
14. Know your competition. In any fight or sport, knowing your competitor’s strengths and weaknesses is always valuable. For example, before you approach a company to inquire about licensing your product, do a prior art search on them. Is intellectual property important to the company? Familiarize yourself with the company’s history and culture as well. Is being first to market important? Before you speak with anyone about your invention, look up their profile on LinkedIn for background. What is their area of expertise?
Insights like these allow you to design your product more strategically. For example, maybe you can alter your product so that it can be made more efficiently, possibly using technology their competitor doesn’t have.
The more you know about their business the better.
15. Build relationships with all major retailers. To prevent a retailer from carrying a copycat product, reach out early on and be the first to introduce your product and its story. Make sure they know you are the creator and your product, the original.
16. Police trade shows. Verify that your product is being displayed appropriately at trade events. Can passerby see it? Do they grasp its benefit? Visiting trade shows in person is also a great opportunity to stay abreast of the competition.
17. Keep innovating. The best way of staying ahead of the competition is by continuing to innovate. Improve your product and file additional intellectual property on those improvements. Look for line extensions. Your small size means you can be quick. You can outthink them.
It’s not the size of a company that gives it strength, it’s actually knowledge. Following these tips and strategies will create leverage for you to get a better licensing deal, work with the right company, and stop copycats when you do become successful selling your product. It’s all about becoming a professional inventor.
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“17 Tools And Strategies For Entrepreneurs To Fight To Get Paid” | Written By: Stephen Key, Contributor / Forbes – Entrepreneurs
September 30, 2019 at 02:29PM
VIEW ARTICLE ON Forbes – Entrepreneurs >> https://www.forbes.com/sites/stephenkey/2019/09/30/17-tools-and-strategies-for-entrepreneurs-to-fight-to-get-paid/