May 2009

Ken Rainbolt’s display of his award-winning Segway lock sparked a general discussion of how to profit from a good invention. Inventors who want to focus on inventing rather than on running a business often license (rent) their inventions to one or more companies. Let a company make and sell the product of your invention, and in exchange, the company typically gives you 3-5% of its wholesale profit from your invention. How do you find an interested company? Start by looking for products similar to yours in stores, on the internet, and at trade shows. Learn about the companies that sell those products, using the library or internet, and focus on companies that look most promising to you. Ron Jackson especially recommends a company whose net sales are less than $50 million per year, because you may be able to meet with the CEO. Find out where your invention fits into the market (do market research), and what your production costs will be (get estimates from manufacturers), so you can forecast how much profit your invention is likely to generate. Then contact the CEO or sales manager, explain that you are a product developer who can benefit the company, and sell the benefits (profits, market share, etc.; not your invention) you can provide. Protect your rights to your invention when discussing details of the invention with someone in a company. Having that person sign a nondisclosure agreement may be enough protection. Filing an inexpensive provisional patent application prior to the meeting can supplement that protection. If you will market your invention for only a few years, because you want only a quick profit or because your invention is a fad, then you probably don’t need a patent. But for longer lasting interests, your strongest protection is to enter the discussion owning a patent for your invention. A patent not only protects your idea from theft, it also lets the company know that you can protect the company’s market share by preventing others from making, importing, selling, or using your invention in the United States. Realize that a patent does not give you the right to benefit from your invention; it only gives you the right to prevent others from doing so.