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should i get a small loan to develop if i expect to license
by dthomp87 » Tue Mar 11, 2008 12:29 pm
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i will need a loan in order to develop a prototype of my invention. I plan on licensing this product out to a manufacturer. How much can one expect to make off a license and would it be unwise to take out a loan in order to get this done? it would be a shame if i spent 20k-30k developing this idea if i dont make that much from licensing
what do you think?
thanks,
david
what do you think?
thanks,
david
by RandyB » Tue Mar 11, 2008 9:43 pm
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Yes, it would be a shame. Many new inventors believe that to become successful all you need to do is make a prototype, or get a patent, and then license their invention. There is a bit more to it. It is like believing that to make money in real estate all you do is buy a hammer, build a house, and then sell it. That's not exactly what happens and is the main reason why 93% of inventors are not successful.
You need more tools than a hammer and the selling is dependent on a lot of factors. There are several tools we use in determing the potential success of an invention. The tools are used in sequence: Inventors Log, Patent Search, Market Research, Business Plan, Prototype and then Patent Application.
These tools allow you to determine and prove the profitability of your invention. To be viable, a successful invention must make profits for all involved. If these tools are not used then the chances of successfully licensing an invention - and making money - are slightly worse than getting hit by lightning but slightly better than winning a lottery. So I would hold off on the loan until you can use the above tools to convince yourself and others that you are going to make money - then licensing is more definite - you will know what to expect - how much you will make - because you researched it and prepared a business plan.
Hope this helps.
Randy Belaire
http://www.inventor-strategies.com
You need more tools than a hammer and the selling is dependent on a lot of factors. There are several tools we use in determing the potential success of an invention. The tools are used in sequence: Inventors Log, Patent Search, Market Research, Business Plan, Prototype and then Patent Application.
These tools allow you to determine and prove the profitability of your invention. To be viable, a successful invention must make profits for all involved. If these tools are not used then the chances of successfully licensing an invention - and making money - are slightly worse than getting hit by lightning but slightly better than winning a lottery. So I would hold off on the loan until you can use the above tools to convince yourself and others that you are going to make money - then licensing is more definite - you will know what to expect - how much you will make - because you researched it and prepared a business plan.
Hope this helps.
Randy Belaire
http://www.inventor-strategies.com
by makeworldbetter » Wed Mar 12, 2008 2:48 pm
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makeworldbetter - Black Belt
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Randy is right, I didn't have the heart to say it.
If you jump into conclusion too quick, it may cause your lose.
Sounds like all you have is a plan. I am not sure what level of planing is this plan you have. I just hope it's not a pipe dream.
Go ask someone with more experience. Maybe you can ask me, I am willing to help. I will sign NDA. Don't just ask me, ask others as well. If you get a nod from everybody, you may still fail, yet less likely. (I would say around 10-25% chance to fail)
Right now what you need to do is to find out the cheapest way to give yourself some protection before you talk to any others. I would go with provisional patent.
If you jump into conclusion too quick, it may cause your lose.
Sounds like all you have is a plan. I am not sure what level of planing is this plan you have. I just hope it's not a pipe dream.
Go ask someone with more experience. Maybe you can ask me, I am willing to help. I will sign NDA. Don't just ask me, ask others as well. If you get a nod from everybody, you may still fail, yet less likely. (I would say around 10-25% chance to fail)
Right now what you need to do is to find out the cheapest way to give yourself some protection before you talk to any others. I would go with provisional patent.
by Work2XL » Wed Mar 12, 2008 9:40 pm
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Work2XL - Blue Belt
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I also agree with Randy. I would write a business plan. It is a life draining exorcise, that will sap every third brain cell, leave you weeping in a corner and wishing you never had the idea ... or it will recharge your batteries and prove you are heading in the right direction. I do have a bit of a question about your prototyping costs. I don't know what your project is, but it better be something VERY complicated to require 30K just to show proof of concept.
Writing my Bus. Plan brought out many new ideas and concepts I hadn't thought of previously.
Randy
Writing my Bus. Plan brought out many new ideas and concepts I hadn't thought of previously.
Randy
by lindsey » Wed Oct 15, 2008 7:51 am
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Hi David,
I have found it difficult to decide when and where to spend money for my invention. So many people want to take your money! I found this article helpful so I would like to share it with you.
It's called 'How to go broke inventing". It's a harsh title but it has very valuable information.
http://www.ideabuyer.com/news/how-to-go-broke-inventing/
Hope it helps!
Lindsey
I have found it difficult to decide when and where to spend money for my invention. So many people want to take your money! I found this article helpful so I would like to share it with you.
It's called 'How to go broke inventing". It's a harsh title but it has very valuable information.
http://www.ideabuyer.com/news/how-to-go-broke-inventing/
Hope it helps!
Lindsey
by Patent_Attorney » Fri Oct 17, 2008 3:54 pm
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- Joined: Tue Oct 14, 2008 12:17 pm
The first thing to do is get a profession patentability search and opinion and NOT from a scheister marking firm, but from a registered agent or attorney. If the opinion is worth even $10 there will be dozens of patents found because it should be an element by element search that can NOT be done by google, but by a patent classification search.
The least amount of patents that were relevant for any invention I have found was about 15 patents. Unless you are patenting a new DNA string there will be dozens of art.
A proper analysis will discuss rejections under 102 (anticipation) and 103 (obviousness) rejections that can be brought by the USPTO. Over 50% of the searches I have done leave the patent application with only very narrow undesirable claims that have no marketing/licensing value.
I have done opinions for companies and that is the first thing they look at before going forward. I do patentability opinions for $500, which is the cost I charged at my last firm of $1700. The cost of a good search was $450 and thus I only charge for me to do the search and throw in the opinion for free.
This small amount is critical to map out the future of your product. ALL COMPANIES do a patentability search before patenting their own inventions to avoid throwing tens of thousands of dollars at law firm full rates down a black hole.
The least amount of patents that were relevant for any invention I have found was about 15 patents. Unless you are patenting a new DNA string there will be dozens of art.
A proper analysis will discuss rejections under 102 (anticipation) and 103 (obviousness) rejections that can be brought by the USPTO. Over 50% of the searches I have done leave the patent application with only very narrow undesirable claims that have no marketing/licensing value.
I have done opinions for companies and that is the first thing they look at before going forward. I do patentability opinions for $500, which is the cost I charged at my last firm of $1700. The cost of a good search was $450 and thus I only charge for me to do the search and throw in the opinion for free.
This small amount is critical to map out the future of your product. ALL COMPANIES do a patentability search before patenting their own inventions to avoid throwing tens of thousands of dollars at law firm full rates down a black hole.
6 posts
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