New effort at licensing!

[TedM]

It's been years since I started a thread here. This one isn't so complicated, so let's see how it goes.

Note that, about 10 years ago (!?!?) I went through Stephen Key's training to understand the ins and outs of licensing my ideas. I'm going to use that process here.

I've had an idea kicking around my head for a few years. A consumer product that I just cannot believe noone makes/is selling.
I finally got around to doing something about it:

Progress so far:

• Hired someone on Fiverr to make a couple of simple diagrams. - $22
• Wrote up a Provisional Patent (with ChatGPT's help - but I edited it some.)
• Submitted the patent application to the USPTO - cost $60 (certified myself for micro-entity status)
• Had ChatGPT create a list of 15 companies that are in this space who sell in the retail market, along with the link for submitting a product idea.

Time invested: about 6 hours.

Next steps:
Create a "Stephen Key" style sell sheet - now with the words "Patent Pending" - 1 hour estimate.
Populate a follow-up spreadsheet, to keep track of who I contact and when. - also 1 hour
Start the product submission process. - maybe 10 minutes/submission....

 

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[RightyTighty]

How many products have you tried to license and have you had any successes?

I went the licensing route last year. I found it frustrating and decided to venture. Licensing can be a good gig to get some seed money, but Control and Scalability are limited. Also, unless you have a disruptive innovation or get a DRTV contract the ROI tends to be limited. I can name half a dozen people I know personally who became fastlane through venturing, but I’ve never even heard of anyone who became a fastlaner through licensing royalties. Even Stephen Key, who has licensed over 20 of his own products and is the accepted ultimate expert in the field, makes his living by selling courses on licensing, not from royalties. But I realize it can be the best choice for some and I wish you good luck! Please keep us informed of your progress.

 

[TedM]

How many products have you tried to license and have you had any successes?

I went the licensing route last year. I found it frustrating and decided to venture. Licensing can be a good gig to get some seed money, but Control and Scalability are limited. Also, unless you have a disruptive innovation or get a DRTV contract the ROI tends to be limited. I can name half a dozen people I know personally who became fastlane through venturing, but I’ve never even heard of anyone who became a fastlaner through licensing royalties. Even Stephen Key, who has licensed over 20 of his own products and is the accepted ultimate expert in the field, makes his living by selling courses on licensing, not from royalties. But I realize it can be the best choice for some and I wish you good luck! Please keep us informed of your progress.

I've tried a few in the past, but frankly they were kind of crappy ideas.
And Stephen did make a lot of money from licensing before he went guru on the courses. And he's had many students who have done well going this route.

Personally, I'm doing this to scratch an itch.... the product is one that should be available to everyone and needs an established company in the field to pull it off successfully, as a line extension basically.

I have a startup product I'm working on that I'm more invested in.

 

[JIRS]

Stephen Key is actually a "Legendary Member" here. He did kind of a breakdown of his (Stephen Key) licensing activities (see this link) at the time of the post.

Regarding what you can make licensing, I think I did the math and the revenue looked like that of a decent/good salary these days (if you split the revenue there over the time frame). The one good thing is that this situation would bring is the upside of being active in the business, where if you are constantly batting, you have a higher chance of hitting a homerun, similar to when you are venturing. This is the same case as in venturing for yourself, except you can steer the ship faster if you are just licensing vs. full depth into a business.

Of course, this is a success story, so the survival/success bias applies.

 

[TedM]

Update:
Refined and expanded contact list to 40 companies which, upon review, is a good set of retail and professional manufacturers. Pleased with the list.

Researched more specifics for the business argument to include in sell sheet.
Ready to go with this. Forgot to ask Fiverr guy for a specific image. Will try to do myself or if it starts to take time... just swallow my pride and pay.

Also did more patent searches. Still hard for me to believe there's not something similar.

Goals for today:
1. draft sell sheet.
2. Import licensee data into spreadsheet

 

[TedM]

1. Finished a draft of the sell sheet,
2. Imported target distributor data in Sheets.
3. Contacted InventRight to sign up for their monthly Alumni program ($59/mo - no obligation)
4. Also - a real bonus - 25 minute call with a senior coach at InventRight, so I can get some solid feedback on my sell sheet and on the idea in general. - No cost; this Wednesday.

 

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[TedM]

Met with InventRight coach.
Me ""so, whaddya think of the idea?"
Him "Definitely a big need."
Me "Then this could be big??"
Him "You know, over the last 10 years- I've seen the most amazing ideas - and they've not been licensed. And I've seen some weird ideas that have an end cap in Walmart. The only thing I'm sure of - is there are a lot of surprises and no guarantee."
Me "Oh.. Ummm...ok"

He did suggest doing a mockup to demo the idea with a brief (under 1 minute) video to submit with my sell sheet. Shoot with my phone, post it "private " on YouTube, and submit the link embedded in the sell sheet.
(Was helpful about some materials to use and how to do it. )
Video isnt meant to be professional- just to demo the concept.
Also suggested reducing text and concentrating on up to 6 bullet points with brief sentences.

 

[TedM]

Update: Nov 10

• Contacted several companies and got an encouraging response from a significant player.
• Realized that i was not ready, actually since i didn't kow for sure that it was manufacturable.
• Did more research contacting manufacturers in the space in Europe and US.
• Finally was referred to a specialist in the fied who happens to be in my country.
• I offered him to be a partner... anything... lets just get this off the ground!!
• He's interested, and i paid for a 3 cavity mold for him to use for testing.
• I took a deep breath and paid the $680. (A real sum for me.)

Now he's to order the mold, and make initial viability tests. He'll be able to tweak the mold to some degree if the first attempts are not satisfactory.
His testing work is his contribution.

This may veer from licensing to manufacturering and then finding marketing partners.

Let's see how the tests go.

 

[RightyTighty]

Excellent! Hope you join the Inventors Meetup in an hour (10 am CDT). You could bring some real value to this group.

 

[Gypsy Soul]

@RightyTighty and @TedM I want to thank you guys for posting this thread. It helped me submit my 1st utility (provisional patent application). I also reached out to 3 companies (OXO, Unilever and P&G) for licensing. I'm now working on my 2nd PPA. Thanks again!

 

[wanttogofaster]

Stephen Key is actually a "Legendary Member" here. He did kind of a breakdown of his (Stephen Key) licensing activities (see this link) at the time of the post.

The link doesn't work.

 

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[TedM]

@RightyTighty and @TedM I want to thank you guys for posting this thread. It helped me submit my 1st utility (provisional patent application). I also reached out to 3 companies (OXO, Unilever and P&G) for licensing. I'm now working on my 2nd PPA. Thanks again!

I found OXO to be very accessible. I was easily able to get to the right people to look at my idea. Unfortunately, my product wasn't very good so they passed on it.
You really need 20 companies to contact. As Stephen says - it's a numbers game. Lots of companies and lots of persistent follow up.
PM me if you want.

 

[Vigilante]

It's been years since I started a thread here. This one isn't so complicated, so let's see how it goes.

Note that, about 10 years ago (!?!?) I went through Stephen Key's training to understand the ins and outs of licensing my ideas. I'm going to use that process here.

I've had an idea kicking around my head for a few years. A consumer product that I just cannot believe noone makes/is selling.
I finally got around to doing something about it:

Progress so far:

• Hired someone on Fiverr to make a couple of simple diagrams. - $22
• Wrote up a Provisional Patent (with ChatGPT's help - but I edited it some.)
• Submitted the patent application to the USPTO - cost $60 (certified myself for micro-entity status)
• Had ChatGPT create a list of 15 companies that are in this space who sell in the retail market, along with the link for submitting a product idea.

Time invested: about 6 hours.

Next steps:
Create a "Stephen Key" style sell sheet - now with the words "Patent Pending" - 1 hour estimate.
Populate a follow-up spreadsheet, to keep track of who I contact and when. - also 1 hour
Start the product submission process. - maybe 10 minutes/submission....

Hello old friend. A reminder that a lifetime of pursuing freedom will ALWAYS end better than a lifetime of working on someone else's dream. Let me know here in the comments if I can help you in any way.

 

[TedM]

The mold has been made and some test products made.
They definitely show the potential, I understand, but some further work - and money- would be required...

I'm planning to go meet the guy who spec'd & tested the mold and speak with him.... touch and feel the first results.

Then hopefully I'll be smarter about how to proceed.

He lives about 2 hours drive north of me. Monday???

 

[TedM]

Not this week (he's not available when I am), but we are set for next Tuesday.

Here's my deliberation:
I'll have physical samples that work pretty well, but not well enough to be a final product. I don't know how much money that will take, to fine tune.
-> I hope to get some direction on that next week. My guy has 30 years experience in this field, and should have some educated opinions.
He's certain that this can be mass produced cost effectively.
-> I need to find out who can do that and what that process looks like.

Thinking out loud...
I could show what I have to manufacturing/distributors who *may* see enough value to just license and take it forward.
Or... I could see if another mold iteration would get me significantly closer at a low cost.
I might be able to get a recognized local institution to test internally.

--> If the results are positive, that could be used for a licensee or for an investor.

I have no interest in developing this as a branded item of my own. It's out of my scope and it's not necessary.
-> *IF* this could be manufactured locally, then selling OEM but retaining IP would be the best route. And hopefully most time efficient.

There would need to be serious patent investment to build a "wall of patents" around the product, both since it could be easily copied, and also because there could be future benefit from the IP itself.

Just for context, I'm 64 years old, married with a couple of kids at home (sort of) still, grandchildren, a FT job, and other interests/obligations that take up all my time. Including another product I've been working on (which would be a branded retail item).

 

[TedM]

Two hour drive in scattered showers to meet the guy. He's an expert in his field who's founded a couple of leading companies but has preferred to maintain his small R&D consulting firm because he likes working on new projects.
He showed us around, and showed the samples he'd made as a first attempt at addressing the product.
I need to try them myself, but his observation is that they work well enough to validate the idea. He was pretty confident that it would take a max of 3 or 4 more iterations until we found a design that could be commercially produced.

He was also clear that there are a few local companies that could manufacture well enough for the global market.

The IP side here will be critical. This could be copied easily.

It'll cost another $2k to get the design right.
Not at all sure how to proceed with investigating the IP path.

Next immediate steps are clear: testing some more and coming up with guidance for the next development attempt.

Need to get creative about funding.
@Vigilante - your comments would be most welcome.

 

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[TedM]

Updating that i have no update. I was disappointed with the samples, and in the meantime I've made more progress on my other product, which I'm making myself and am more interested in as a long-term business for the family.

But, I do plan on getting back to this- in March at the earliest.

 

[RightyTighty]

$2,000 is not a lot of money. Sounds like yor partner is not convinced that you have a valid product.

Make sure you don’t let your guard down just because you have a PPA. Licensing efforts tend to gobble up the 12 months of IP protection afforded by a PPA, but if you don’t disclose publicly you can re-file your PPA. While it resets your priority date, it also re-starts the 12 month clock on protection……IF there has been no public disclosure. Following public disclosure, the USPTO allows a 12 month grace period for (only) the original inventor to file a Utility Patent, after which time it becomes public domain and unpatentable.

I’ll be watching for this to re-surface when it starts gnawing at you again.

 

[100k]

Kick starter, YouTube, twitter and Tiktok journey showing people what you are up to.... You could end up getting early pre orders or partners.

 

[TedM]

$2,000 is not a lot of money. Sounds like yor partner is not convinced that you have a valid product

I'm the partner And until I can prove that it works, indeed I'm not convinced. The problem is the basic material being used- that's what needs to be validated.

The design I filed the PPA won't be the final one, I don't think.

if you don’t disclose publicly you can re-file your PPA.

Are you familiar with the guidelines on what constitutes public disclosure? Clearly I need to show it to people to test,.etc.

 

[RightyTighty]

Are you familiar with the guidelines on what constitutes public disclosure? Clearly I need to show it to people to test,.etc.

There can be a large gray area here. I am not a legal expert; the following is my understanding and opinion.

NDA’s will afford protection, but it’s awkward asking a stranger to sign one in return for the “opportunity” of testing your product, and corporate entities typically won’t sign one.

You can post publicly that you have a product that solves a certain problem but don’t publish ANYTHING about the product itself or any explicit description of the problem it solves or how it solves it (best to not publish at all).

You can have individuals test your product in private settings. This means they can take it home and use use it….IF they don’t disclose to anyone. If they tell several people but it goes no further it’s in the gray area. If anyone blabs, posts it on social media, or shows it to a public group you’re screwed.

Do not sell anything to anyone until you are ready to disclose. Even selling a prototype to a close associate is in the gray area.

I used to wonder how the “gray area” would come to light. There are no “Patent Police” and it seems unlikely that some random product tester would come forward and volunteer a sworn statement. Until I read one day that it’s the competitors of a successful product who will try to exploit the gray area.

And I realized…….

What no one will tell you is that the licensing process is the biggest gray area and your greatest disclosure risk. Disclosing details to a manufacturer without an NDA is in the gray area, and the risk here is twofold. The manufacturers you engage with will later be competitors, and competitors are by far the greatest threat when it comes to revealing and attempting to exploit any perceived disclosure when your product becomes successful. Stephen Key says you should never send explicit info to manufacturers without an NDA, but he follows that by admitting that most won’t sign them. His ultimate advice is to have a PPA and develop good relationships. But we’ve already discussed how licensing efforts can cost you your initial priority date that would have protected you. If you re-file, you are left with your “good relationships” for protection. Secondly - and here’s where it gets ugly - in your licensing efforts you actually handed your greatest risk the documented disclosure needed to later make their case. See the problem?

The best advice is to do your best to avoid disclosure, keep executing, and don’t stress out about it. Similar to the risk of a product being copied, IP risks should be considered as distasteful but normal part of the normal business landscape. The best defense against both is due diligence, being first to market, and building a strong brand.

Hope this helps.

 

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[TedM]

Agree with what you wrote, with the one flimsy caveat that companies that steal (or insert any nicer word here) your IP will inevitably have less external innovation coming their way.
So, while one should not be promiscuous on sharing- being a paranoid inventor is for sure not prodctive.