1 Invention Central is your information exchange. Our staff, cleverly disguised as "Mr. JustTryingToSteerYouInTheRightDirection" makes every effort to answer your questions promptly and accurately. Any questions that have universal interest and appeal will be posted for everyone’s benefit.

To all the interested inventors, agents, artists, attorneys, designers, prototypers, and others who visit this site: many of you have valuable information and experiences. We encourage you to share your knowledge, opinions and expertise by adding your responses to the answers below.

Name: This question has been submitted by many Inventors
Location: From many locations
E-mail:
Website:
Date: June 6, 2000
Question or comment: I have an idea for a new product that I’m very excited about. But I don’t want to waste my time or money. How do I find out if my idea is already out there

Feedback: You’re absolutely right. There’s not much point in wasting time or money to develop a product that’s already on the market. There are 3 major approaches you can take to find out if a product like yours is being marketed or has been patented.

First, do a patent search. While this won’t tell you if a product is currently being marketed (because many, many patented inventions never make it to market), it will tell you if anyone else has had the same idea and tried to protect it. You’ll also find out what other variations on your idea have been patented.

Patents tell you who the patent was granted to, so if you should find a product similar to yours, there’s no reason you can’t contact the patent holder and ask if the product is being marketed anywhere. They may or may not tell you, but you have nothing to lose by asking.

Best of all, you can do a pretty good search yourself. The Patent & Trademark Office has a number of Patent & Trademark Depository Libraries (PTDL’s) around the country. These are free to the public and the librarians are very good about showing you how to use them. They are also a great resource that every inventor should be familiar with. If you tell me what city or town you live in, I’ll let you know where the closest one to you is located.

You can also click on http://www.1inventioncentral.com/links.html and scroll down to “online patent search”. This is a site run by IBM that is a wonderful resource for inventors. It’s quite easy to use and once you become familiar with it, you should have no trouble doing your own search.

The second approach is to personally visit every store in your area that might carry the type of product you are developing. Hit the malls. Walk the aisles. See what’s there – and what’s not. Wear comfortable shoes and take your time. It’s amazing what you can learn, and what kind of inspiration may strike, while you’re doing this.

Third is to subscribe to every possible catalog you can find that might carry your product (this might also give you future sales outlets for your invention). Thumb through them and see what’s new. Many of the products will be in a lot of the catalogs while some will only be in one, but this is a great way to stay up on current product developments.

And go to your local library and ask for the “Catalog of Catalogs”. This will list literally hundreds of catalogs, with phone #’s, so you can call and request a copy. You can also go to http://www.catalogcity.com and find much of the same information.

From: JustTryingToSteerYouInTheRightDirection
E-mail: JTT@1inventioncentral.com

Feedback: Do you have any feedback for these inventors?

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Name: Fred
Location: Newfoundland, Canada
E-mail:
Website:
Date: April 17, 2000
Question or comment: If a company licenses the rights to a new product you’ve invented, what kind of royalties can you expect from a 20 dollar item that costs the company 5 dollars to produce?

Feedback: Very good question – and one to which there is no absolute answer. However, if your product is a consumer good, you can generally expect to receive royalties ranging from 3% to as much as 8% of the NET SELLING PRICE. This is the price the company making the product sells it for to their wholesalers or distributors, minus any returns or legitimate discounts.

For example, it costs the manufacturer $5 to produce a product. They, in turn, sell the product for $8 to their customers – who are probably wholesalers or distributors but could even be retailers. Your royalty is based on this $8 selling price.

Generally speaking, the more “complete” the product is that you license, the higher royalty rate you can expect to receive. In other words, if your product is patented, comes with professional packaging design already done, doesn’t need any further R&D;, and includes the engineering drawings for whatever tooling is required, you can legitimately ask for a higher royalty than if you presented exactly the same invention without the patent, the packaging, or the drawings, and still needing further engineering work.

Different industries also have different standards. If you have an automotive tool or aftermarket accessory, 3-4% is pretty standard. Most consumer goods probably fall into the 5% to 7% range, which I expect would include your invention.

I have seen products, usually high priced items with a very high markup, that paid royalties in the teens. I also know of mass market items that sell millions and millions of units per year, where the royalty may only be a fraction of a percent. There is generally very low markup on these products; the profit all comes from volume. But then again, who wouldn’t like to get half a penny for every child-proof bottle cap sold in a year?

From: JustTryingToSteerYouInTheRightDirection
E-mail: JTT@1inventioncentral.com

Feedback: Do you have any feedback for Fred?

__________________

Name: Sherry
Location:
E-mail: Sherry@satx.rr.com
Website:
Date: February 10, 2000
Question or comment: I have a great idea to improve an existing baby item. I know it will be a success but I am not sure where to start and who to trust. I have gotten positive feedback from those I have discussed this with and wonder how to start and protect my idea.

Feedback: You say you have an idea for an improvement to an existing product. Does it involve a major new device be added to that product, or a significant reworking or restructuring of the product? Or is it simply a minor change or addition? If the former, you may actually have an entirely new product (at least from a patenting &/or marketing sense). If your improvement is only a minor one, but is itself patentable, you may still have a chance to license it to the manufacturer of the product, once it is patented.

With any type of product improvement, it is also important that the improvement be significant. By this I mean that your improvement should cause the underlying product to either be much more effective, faster, lighter weight, easier to use, etc., or that it greatly simplify or reduce the cost of manufacture. Otherwise, there’s not really much chance of selling it to an existing company.

The first thing to do is buy yourself a notebook with permanently bound, numbered pages. Then write down your idea. Don’t worry about how articulate or polished your explanation is, but DO explain it completely and make some sketches in the notebook to go along with the description. This may take 1 or 2, or 20 or 30 pages. It doesn’t matter. Leave room at the bottom of each page for a friend, not a family member, to write: "I have read and understand the material on this page. I also agree to maintain this information in the strictest confidence". Below that they date and sign. Every time you expand on the idea or refine part of it, write down your new thoughts on the next blank page and have it witnessed, signed and dated as well. What you are doing here is establishing your legal claim to this concept.

If you can draw, great. If not, find a friend who can. If none of your friends draw, go to an art school and find a student with good illustration skills who would like to make an extra $50 -100 bucks. After having him or her sign a confidential non-disclosure form, show your artist everything, including your notebook, and tell her that you want a good quality illustration of your concept.

While that is being done, write up a slightly more refined description of your idea. You are going to make copies of this and of the artwork, and file a Disclosure Document with the U.S. Patent and Trademark Office. This gives you no patent protection. It is just kept on file for 2 years as further evidence of your legal claim.

Now you need to do some preliminary market research, to determine if there really is a market, or any interest, in your invention, before moving ahead and spending money or enlisting outside expertise.

I hope this has helped get you started. Best of luck and keep us posted.

From: JustTryingToSteerYouInTheRightDirection
E-mail: JTT @1inventioncentral.com

Feedback: Do you have any feedback for Sherry?

Name: Jan T.
Location: Henderson, NC
E-mail: jan@ncol.net
Website: na
Date: January 21, 2000
Question or comment: I have a product (patent pending). I did all of the paper work on my own. How do I now find a company who may be interested in licensing my product?

Feedback: That’s a great question, and the crux of understanding how to make money with your invention. An appropriate company to approach re: licensing your new product generally fits these criteria:
a) already makes a similar or VERY closely related item
b) is usually a small to mid-sized company in their industry
c) has a management team intent on increasing market share
d) has a history of bringing new products to market

By "similar" I mean don’t show a new type of watering hose to a garden tool manufacturer – UNLESS they have stated an interest in expanding into allied products. Otherwise, you must realize that they are a tool manufacturer, not a hose or tubing company. Don’t go to a company that fabricates metal with an extruded rubber item and expect them to be interested.

The largest companies in any industry are the hardest to deal with and the least likely to cut a deal with you. They often have their own R & D departments and too many lawyers for their own good. There are exceptions, but generally you’re better off with aggressive smaller manufacturers.

If management isn’t committed to expanding and building their firm’s revenues and product line, don’t waste your time. You want a company that believes in the economic value of bringing new products to market on a regular basis. This may seem like basic business sense, but you would be amazed at how many companies are stuck in their own little rut.

Begin your search by walking through stores and looking for similar products. Write down the name of the company that made the item and any patent numbers printed on the product or the packaging. Your next stop is the public library. Head for the Reference Desk and ask for your state’s manufacturing directory, Dun & Bradstreet Million Dollar Directory and the Thomas Register of American Manufacturers. Learn your way around these books.

Once you understand SIC codes and how companies are listed in these directories, you will be able to research both the firms you have written down and other companies that manufacture similar products. You can also head for the closest Patent & Trademark Depository Library (PTDL) and look up the patent numbers you wrote down earlier. This will tell you if the company has licensed this patent or if it was generated internally.

Select the companies that seem appropriate from your combined research. Once you contact them, ask who you should speak to, or what their procedure is for reviewing new product submissions. If you’ve done your homework, you’ll be on your way.

Hopefully, this will get you started. There are lots of "tricks of the trade" that just come from experience. If you subscribe to INVENTOR UPDATES, you know that we frequently highlight companies that are searching for specific types of products. You should also refer to Chapter 10 in "Patents, Products And Profits". This entire chapter is devoted to an in-depth discussion of the exact tips and techniques used to find the right company to license your invention to.

Best of luck and please keep us posted on your progress!

From: JustTryingToSteerYouInTheRightDirection
E-mail: JTT @1inventioncentral.com

Feedback: Do you have any feedback for Jan?

Name: Debbie Walters
Location: California
E-mail: walters5@gateway.net
Website: na
Date: January 12, 2000
Question or comment: I have a batter mix that I have created for frying chicken, seafood or whatever you like. I would like to know how to go about marketing and getting started. I am not sure that I need a patent at this time, but I am just not sure where else to turn. Thank you.

Feedback: Thanks for your question. I’m sure there are many others out there with a recipe or food item wondering how to get started. Let’s begin by forgetting about a patent – trademarks are generally the way to protect food.

We buy Coca-Cola, Famous Amos or Mrs. Fields based on the name and reputation. In fact, we often don’t even know what the actual recipes are. Plus, those recipes change over time as certain ingredients become more or less available, or costly. But as long as that Vlasic pickle still tastes like a good pickle, we really don’t care. The key to success in the specialty foods business is marketing and image, much more than the specific proportion of one ingredient to another.

As to your particular situation, my first recommendation is that you find and read an excellent book by Stephen F. Hall, titled "From Kitchen to Market", published by Upstart Publishing Company. It is readily available and should be in the business section of any large bookstore. This book will take you step by step through the process of developing, researching, marketing and distributing any new food item. It also has the names and numbers of many food industry groups and associations.

The second thing you should do – this is almost a "must" if you’re serious about your product – is attend the NASFT Fancy Food Show, where you will be exposed to the inner workings of the business and hopefully make some contacts. And, you’re in luck. The show is soon and it’s in California. It will be at the Mosconi Center in San Francisco, January 23-25. To get more information about attending go to http://www.fancyfoodshows.com. This is a great opportunity that you shouldn’t miss. When you register just tell them that you are a start-up food manufacturer.

And finally, let me give you two good references. One is Shermain Hardesty of the Food Marketing & Economics Group, 1477 Drew Av., Ste. 104, Davis, CA 95616. Her company does market research and strategic planning for small food companies. You can reach her at 530-753-1632. The other is Ron Cardoos of Green Harbor Associates, 4 Calypso Lane, Marshfield, MA 02050. They offer a full range of consulting and planning services for the specialty foods business. His phone number is 781-837-1664.

I hope we’ve got you started on the right foot (although I never understood what was wrong with the left foot !) Please keep us informed of your progress. And don’t lose heart. Colonel Sanders was turned down by hundreds of restaurants and food companies before he found someone willing to feature his Special Recipe. Who knows, you could be next!

From: JustTryingToSteerYouInTheRightDirection
E-mail: JTT @1inventioncentral.com

Feedback: Do you have any feedback for Debbie?

Name: Rita F.
Location: Seymour, CT
E-mail: Chocky1234@aol.com
Website: na
Date: December 28, 1999
Question or comment: If there are other patented products out there for an invention similar to mine but made differently can this affect me? There is another patent, but made very differently from mine, and that is probably why we were both granted a utility patent. Is my patent still good? I am currently trying to license my product. I just paid my maintenance fee, and I am hoping I didn’t spend all that money for nothing, because I really can’t afford to waste it.

Feedback: The existence of a similar product, also having a utility patent, has no direct effect on your product. It simply means that no one can manufacture and sell either product without the permission of the patent owner.

Indirectly, it could have some effect, though it probably won’t. A company you’re trying to license your product to might do a patent search and become aware of the other invention. If that one appears to be significantly less expensive to manufacture and looks as good as yours, there’s nothing to prevent the company from contacting that patent owner and offering them a cheaper deal.

In reality, that is a little too pro-active for most companies, plus there are any number of variables that could prevent that strategy from working. In most cases, if you (or your agent) approach a company with a proposal for licensing a patented product, especially one that doesn’t have a lot of competition already on the market, they will deal with you in good faith. Naturally there are no guarantees, but based on the description of the product you gave me, this isn’t something I would lose sleep over. Best of luck.

From: JustTryingToSteerYouInTheRightDirection
E-mail: JTT @1inventioncentral.com

Feedback: Do you have any feedback for Rita?

Name: Abbie Bean
Location: Cincinnati, Ohio
E-mail: selectnow@yahoo.com
Website: na
Date: December 3, 1999
Question or comment: This site is so helpful! I’m working on an idea for an invention and wondered if I should apply for a patent before I go any further?

Feedback: It’s hard to say just from the information you’ve provided, but probably not. Many rookie inventors make the classic mistake of spending a large amount of time and money for a patent long before it’s really needed – assuming one is needed at all! You mentioned that you’re working on an idea. Keep in mind that 1.) you can’t patent an idea – your invention it has to be "reduced to practice", in other words, fully designed, with detailed explanations, before you can even consider applying for a patent, and 2.) ideas alone aren’t usually worth much: it’s products that the market is after.

     Before investing valuable resources in any invention, it makes sense to determine if the concept has commercial potential. There’s no point spending money to patent a product that no one is interested in. If your research indicates that there is demand, you may want to consider applying for a low-cost provisional patent. This would give you a year to pursue development and marketing of your product on a patent pending basis.

     Of course, if you’ve designed a truly revolutionary, mass-appeal product, you should probably patent ASAP. On the other hand, if your idea is for a fad or novelty item that may be popular for only a year or two, you may be better off spending your money on marketing rather than on a patent that won’t even be issued until your product has already come and gone.

     Every invention is unique. There is no one-size-fits-all answer to "if and when" you should apply for a patent. Talk to some of the patent agents or attorneys listed in our Resource Center. Also, if you’ll forgive a shameless plug, "Patents, Products And Profits" discusses this question in much greater detail… and may be an excellent place to start. Best of luck with your idea!

From: JustTryingToSteerYouInTheRightDirection
E-mail: JTT @1inventioncentral.com

Feedback: Do you have any feedback for Abbie?