Prototype to Licensing Contract

[Bamcis]

Hey all,

Straight to the point, I am seeking additional guidance and critique of my execution strategy to turn a crude prototype into a licensing contract by (hopefully) a major corporation. I am setting the bar high and would like to earn a contract with one of the top dogs. If anyone could share any experiences or commentary on that matter, it would be appreciated. Before getting too far ahead of myself, let me share some information.

The prototype, again is, crude. For your mind, imagine a packaging unit for a worldwide product. I've recently reached the point I simply cannot make it any cheaper or refined, and additionally, can't test it.

Considering this, I have decided I will go speak with the New Product Development Lab at Boise State where I attend classes. I have used them in the past for a CAD I needed refined and printed. Keep in mind that at BSU's development lab, some of the design engineers are students, discounting the price for services. Their state of the art technology and over half-priced rates, will assist me in developing my prototype.

For the further development of my prototype, I intent to speak with the design engineer (student or otherwise) about:

• Design flaw, including functionality and manufacturability (this seems important to me when trying to get the attention of major corporations)
• Local (or known) manufactures for package and distribution testing (**I would like to touch on this again later)
• CAD, refinement, and animation of use

Still with me?

If so, thank you, because this is where I need more guidance than critique.

I go back to the Thread's title for this, "Prototype to Licensing Contract", and ask: at what point can I take my prototype and give an excellent business presentation to a major corporation for the highest chance of success.

I know that I am going to need to speak with a patent lawyer and I have some good history with one of the top business law firms here in Boise. I have done a (not so extensive) search of patents with my knowledge of their searching engine and didn't see anything that struck me as potential infringement. Regardless, I will be speaking with one of their lawyers.

So, hopefully by this point (I know it may take time), I will have a provisional patent and working/tested prototype (best case ontario). IS THIS finally the time to go present to a company?

...Or...

Is it possible to save resources by not spending time (or very little) on product packing and distribution testing (**touching on this from earlier). I say while still getting a provisional patent. THEN present to a company in the hopes their R&D team will handle the logistics I bypassed.

Is this lazy? Sure, but if it's still possible to cut a deal this, I'd say it could be a smart alternative keeping in mind financials.

A few things I would still like to touch on for those willing to assist.

• Am I wrong in my order of development by testing before the provisional patent? If so, would this be the ACTUAL order? Prototype -> provisional patent -> testing/revisions -> file patent -> patent pending -> sell, sell, sell -> patent approved
• My concept is (in my mind) competitive as it offers something fun and functional. Functional meaning it solves a problem. If (when) I get to the table with the big wigs, I feel this is a good bargaining chip for me. However, if they do not like my concept, is it still possible to sell at a high price to keep it away from their competitors? (Yes, yes, yes...a bit premature)
• Again, please consider the real question here over all of my strategy. "What is the fastest way to get my crude prototype either sold or licensed with a snack company?". Then examine my strategy and poke holes.
• Any advice on how I can go about getting meetings with the big corporations? Speak with their R&D? Or perhaps try and contact part of their Marketing department?

I am at the mercy of the web now, but would like to preemptively thank you all. I look forward to your questions and criticisms.

BAMCIS

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Bamcis]

Bumping this with further progress...

Turns out my patent searching skills needed some work. After some additional time on different patent search engines I found (what I thought was) a patent. I read it over and I'm pretty sure it would have prevented me from continuing any further.

I pushed further and searched patents with the numbers on the publication and it kept coming up with nothing. Google helped here, and I found out that I was searching for the application number NOT the patent number. Even searches of the name and description weren't pulling info up on the us patent site. So I decided to start searching applications and status.

USPTO.gov's PAIR system (Patent Application Information Retrieval) helped me out and I found out the application was "ABANDONED --Failure to Respond to an Office Action".

Question 1: Can I use the information in the abandoned patent application as a base towards developing my own prototype and patent application, WITHOUT breaking the law (infringement is all I can think of). And if so...

Question 2: Did I just hit a goldmine?

BAMCIS

 

[Bytesunfish]

I'm afraid I don't have an answer for you, but I'll be watching your thread. I'm going to be delving into the patent process in they not so distant future.

 

[Ultra Magnus]

Well, since the thread is slow, I will offer some advice even though I did not go the licensing route myself, opting instead to manufacture and sell on my own.

Firstly, patent attorneys buy access to patent search engines and have superior skills in finding results that could possibly match your idea. It's good to use a professional to do the search for you since, as you've already discovered, there are nuances that can skew the results of a self-conducted search.

One caveat though is that if there's not much to find, the patent attorney can include tangents that aren't helpful to you but pad out his or her time so that they can charge you more. At least that was my experience. What I mean by tangent is a similar idea in an area that's so far outside your market that the patent owner will never pursue you, and the application you've intended will probably allow you to get your own patent anyway.

If there is a similar patent, maybe you can change an important detail, and point it out in your application? Consider doing so because if the idea was published and is available online, it's going to count as prior art. You'll get the provisional (no one reads them), but the full patent will probably be rejected on those grounds.

In terms of your plan, you should focus primarily on your pitching skills. That's because large companies, especially if they have R&D departments, might not be all that interested in ideas from outside. You might have a great product, but why should they care? And why should they pay you for it?

To answer these questions, your implementation should be really solid. Get a working prototype, assess the manufacturability and ROI, potential profits and hurdles. If you do all this and you really like what you see, why not go ahead and launch the product yourself? Large companies, and other potential buyers, will be far more interested in snatching a proven idea.

My perspective is that it took me over two years to get from a working proof-of-concept to a manufactured product (although I did have other things going on at the time). It's a really simple concept, but making it in a potentially profitable way with the option to scale production up was the real issue. A successful company knows these hurdles very well, so if you can convince them you're aware of these problems and have some solutions they'll be more interested.

All in all, getting that deal is going to be a sales presentation, you need to be a good salesman. And a good salesman knows everything there is to know about their product, the objections customers might have, and how to overcome them.

Tl;dr advice: do as much as you can with the resources you can spare, research costs and benefits, then file for a provisional patent (since it's time-sensitive), prepare a great pitch and if they're not interested, consider pursuing the product yourself. They might not be interested for reasons you'll never know that are big corporation reasons.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Ultra Magnus]

Also, I just read this in Mark Cuban's book (a compilation of his blog posts) and thought that it might be useful for you to have his perspective on investing. I know that it's not exactly about licensing, but at least some of the thinking behind Cuban's argument might make you better at selling your pitch (or even reconsidering doing it). I bolded the parts that I think are relevant to your situation:

"Most entrepreneurs ... forget to put themselves in the position of the person or company they are asking for money from. They think they are considering that person’s position by making up numbers and calling them expected returns for the investor. If you only give me X dollars, you will get X pct back in X years. You will double or triple your money in X years. Any investor worth anything knows you are just making these numbers up. They are meaningless. Worse, if you tell a savvy investor that the market is X billions of dollars and you just need one or some low percent to make zillions, you are immediately kicked to the curb."

"These investors, including myself, know what you don’t, and they are not telling you. The minute you ask for money, you are playing in their game, they aren’t playing in yours. You are at a huge disadvantage, and it’s only going to get worse if you take their money. The minute you take money, the leverage completely flips to the investor. They control the destiny of your dreams, not you."

Link: http://blogmaverick.com/2008/01/02/the-best-equity-is-sweat-equity/

 

[Paul Thomas]

Bumping this with further progress...

Turns out my patent searching skills needed some work. After some additional time on different patent search engines I found (what I thought was) a patent. I read it over and I'm pretty sure it would have prevented me from continuing any further.

I pushed further and searched patents with the numbers on the publication and it kept coming up with nothing. Google helped here, and I found out that I was searching for the application number NOT the patent number. Even searches of the name and description weren't pulling info up on the us patent site. So I decided to start searching applications and status.

USPTO.gov's PAIR system (Patent Application Information Retrieval) helped me out and I found out the application was "ABANDONED --Failure to Respond to an Office Action".

Question 1: Can I use the information in the abandoned patent application as a base towards developing my own prototype and patent application, WITHOUT breaking the law (infringement is all I can think of). And if so...

Question 2: Did I just hit a goldmine?

BAMCIS

In a similar situation here where I have an idea and have created a prototype on my way to file a PPA.... found a similar thing but in the PAIR system also saw ABANDONED --Failure to Respond to an Office Action.

Any update on what this meant for you?