Answers to your questions
I have an Invention idea, how can I protect it?
O.K. What’s the first step?
How much does Patent Protection Cost?
What does Patent Pending Mean?
Do I really need a Patent?
What is Licensing?
How much is a Royalty?
Do I need a Prototype?
There are different forms of idea protection, these are known as ‘Intellectual Property Protection’. They include the following categories;
• Provisional Patent Protection: Short term (one year) protection for a ‘product’ or functional item. Often used to reduce short term costs considerably.
• Utility Patent Protection: Long term patent protection (twenty years) for a product or functional item. Included in this category could be manufacturing process, business processes or system.
• Industrial Design Patent: Protection specifically for the ‘esthetic’ of an item. Often used for uniquely designed furniture, vase or french doors.
• Trade Mark: Protection for unique names, logos or symbols. Common Trade Marks include Velcro, Coca-Cola or the Nike ‘Swoosh’.
• Copyright: Protects works of art of a various nature, including for example: poems, drawings and paintings, photographs, books, game or assembly instructions etc.Frequently Asked Questions on how to Patent and License New Ideas, Product Inventions
It’s very important to ensure that an invention idea has not already been protected. Approximately 50% of ideas that are searched turn up as already patented. Visit our section on ‘Patent Search’ to perform your own search online or go directly to the Unites States Patent & Trade Mark Office at www.uspto.gov.
Patents will vary depending on the complexity of the invention concept and the extent of other relevant patents uncovered in the Patent Search. The costs to achieve Patent Pending Status range from $3,000 to $15,000. However, many of the costs related to Patenting can be postponed. This is very useful in freeing up resources for other areas of the idea development.
The Patenting Process consists of applying for Patent Protection in the countries of one choice. Once an application is sent into a Patent Office, the application is stamped ‘Received On ______’ and this will be the ‘File Date’ and the application is considered ‘Pending’. This date is significant since Patent Offices all over the world will consider it to be your official date of invention so to speak. The application will likely sit in Pending status for a year or more, before the Patent Office finally has one of its Examiners review the application. Even though the Patent is not officially Granted, an inventor can feel free to manufacture, disclose, market, sell or license the idea in the market place. What’s most important is to file quickly and obtain Pending Status. Also, it is important to file a Patent Application within one year of publicly disclosing an idea. If the application is not made within the one year period, the inventor may lose his/her rights to Patent.
Patenting is a strategy and works well, depending on where you want to go with your idea. Some inventors and companies choose to make and sell the product as quickly as possible, make their profits and expect that competition will enter the market sooner or later. All without Patent Protection.
Alternatively, Patenting allows the inventor the option to license or sell the idea to a bigger company for royalties or an out-right sale. Of course, Patent Protection helps the inventor or company maintain a monopoly in the market place. Some business people realize that by Patenting the door is left open to create ‘Strategic Alliances’ with other companies (perhaps in other territories) down the road.
Licensing is the process of ‘selling’ an idea to a larger company for royalties or upfront fees. The is the most common method of development and profit used by inventors. The attraction to Licensing is the low costs. The main cost of Licensing is the Patent Protection which is critical to the Licensing Process. Other considerations include prototyping, presentation and contacting companies who might be able to produce and sell the product in large quantities.
Royalty rates are calculated based on a number of factors including: industry specific royalty rates, manufacturer profit margins, distributor profit margins, volume expectations and discounts, and, value of product development to date by the inventor. Innovative Licensing & Promotion, Inc. performs royalty evaluations for new products based both on industry standard, royalty rates and its own methods of negotiating higher than standard royalties.
If you wish to License your invention idea to a larger company and receive royalties, a Prototype can be very useful. Prototypes are an effective method of demonstrating a new product concept. However, it is not the only way. Prototyping, depending on the concept, can become cost prohibitive. Computer model techniques such as CAD, Solid Works or E Drawings can create a ‘Photo-Realistic rendering of the product. These methods create a 3 dimensional/360 degree view of the anticipated final product.
How do I get the highest return on my invention?
The most common method of developing an invention and receiving high return is through Licensing.
Licensing is the process where an inventor sells or leases his or her idea or patent to a larger company.
The larger company takes over the manufacturing, distribution, marketing and retailing of the invention or patent and pays the inventor through royalties, up front fees and both.
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