6 Common Inventor FAQs
Category Inventing Advice
1. I have an idea -- now what?
2. Why can’t I get anyone to sign my Confidentiality agreement?
3. Should I hire an agent to promote my invention?
4. I have been rejected by the big companies – is there still hope for my invention?
5. I think someone has stolen my invention -- what do I do?
6. Did I just get ripped off by an invention development company?
I have an idea – now what?
Start with these four essential steps for the beginning stages of invention development:

1. Document your invention. Cost: Free
2. Have the description of your idea witnessed. Cost: Free
3. Conduct your own informal online patent search. Cost: Free
4. Meet with a registered patent attorney or agent for an initial consultation. Cost: Free

How long might it take to complete these first four important steps?

Unless you have an extremely complicated invention, each of these steps may take only a couple of hours each. You could have them done in two days or less. Don’t delay doing these first four steps. Even if you don’t get it right the first time, you can go back to these steps to add more information or correct any deficiencies.

To this point, you can achieve a degree of protection for your idea in that you formally document that you hopefully are the first to conceive your invention. You’ve established your ‘conception date’, and you’ve received advice from a professional regarding your potential patent or other rights.

Here are further steps to consider. Since invention development and commercialization is an extremely high risk proposition, with the vast majority of inventions failing to succeed commercially, it is prudent to spend no more time or money than is necessary to discover that your idea may not be worth pursuing. These next steps start you down the road of a system developed by Docie Marketing, called tiered-risk, where you minimize your risks by taking the smallest risks first. By performing these steps you will minimize your potential loses while maximizing your invention’s potential.

5. Consider having a patent search with a patentability opinion letter done by a patent attorney, patent agent, or a professional patent search firm. Timetable: 2 days to 2 weeks. Cost: Ranges from $250 to $1,500 or more.

TIP: If you want a relatively straightforward inexpensive, (currently under $300) search conducted by a professional search firm with three decades of experience, consider Patent Search International. Email them directly -- click here.

6. Consider filing a patent application, in concert with your invention development strategy. NOTE: This step may be interchanged with the next two steps, Market Research and MY DIMWIT, depending on your patenting strategy. Timetable: 2 to 4 weeks Cost: Starting at under $500 if you do it yourself. Starting at approximately $1,500 for the application only, if you hire a professional.

7. Conduct market research to identify complimentary and competitive products and technologies, and identify manufactures and potential buyers. Timetable: 10 to 90 days. Cost: Free to do it yourself; starting at about $750 to hire professionals.

8. Use the MY DIMWIT Self Help for Inventors tool to get a personalized assessment of your next steps toward bringing your product to market. You can use this at any step along the way. Timetable: Starting at one evening, depending on how far you get. Cost: Free

Why can’t I get anyone to sign my Confidentiality agreement?
The first thing to decide is whether you actually need to have a confidentiality agreement signed. In some instances you may not need to initially have the confidentiality agreement signed. For example, MY DIMWIT provides you with an avenue to share information about your invention project -- including the attributes, benefits, features and advantages of your invention -- without necessarily disclosing any trade secrets or confidential information about your invention. Although most inventors don’t realize this, this can be achieved with the majority of invention projects.

As long as you’re careful about what you disclose, it’s possible to make a preliminary presentation to a company to decide whether they are a match for your invention, or to receive a critique to see to what degree the attributes of your invention are desired in the marketplace without ever needing a CDA.

Important: If you are going to consider sharing information without a CDA, we highly advise you to consult with a patent attorney and share the information you intend to present to a company to be sure that you are not prematurely revealing information that will adversely affect your potential patent rights, both in the United States and abroad.

In many cases, though, you may need to disclose certain patentable aspects about your invention or trade secrets to a third-party company in order to receive an appropriate review. In this case you may seek a confidentiality agreement from that company, especially if you’re considering filing for foreign patent rights.

However, if you are definitely not considering filing for foreign patent rights, and if your patent attorney believes that you’re appropriately covered under your current proprietary rights position, then there may be little risk in submitting your invention to a third-party company for them to decide whether they’re interested in purchasing or licensing your technology, and potentially offer you advice or a critique.

In this case, if the third party company is not willing to sign a confidentiality agreement, it may be better to bite the bullet and sign their non-confidential agreement, if they insist. However, make sure they agree that the invention that you submit will remain your property and that the company will not exploit your invention without your express written permission.

Receiving such commitment from them may be an advantage over any confidential agreement. Plus, it tends to be easier to get your disclosure agreement signed when it does not have a confidential clause. Again, seek legal advise before implementing such a strategy.

Most Fortune 500 companies want to go one step further. In addition to forcing you to sign their non-confidential disclosure agreement, they also suggest that you must only rely on your patent rights in order to receive any potential reimbursement from them.

There are compelling reasons to be willing to sign such a seemingly limiting agreement. First, if your only strategic commercialization choice is to license your invention to another company, in the event that particular company commands the vast majority of the market share, then you may have more to gain than lose by submitting to them. If you do this, however, be sure to learn ahead of time if the company does indeed have a positive track record of paying outside inventors a royalty for use of their invention.

In general, I find that it is important to learn what the ongoing practices and procedure of the company in regard to inventors. What is their track record for paying outside inventors, irrespective of the type of disclosure agreement that they ask you to sign? Often times there’s a disconnect between the severity of the disclosure agreement that the company asks you to sign and their actual policies and track record of paying outside inventors.

On the flip side, it is not uncommon for a company with a horrible track record for paying outside inventors to be willing to sign a confidentiality agreement very favorable to the inventor. This seemingly cooperative and inventor-friendly company may have a history of taking the inventors’ invention, and going to market with it after changing it enough to keep them away from serious legal trouble.

This is yet another compelling reason for doing your due diligence to learn about a company’s practices before submitting your invention to them strictly based on their willingness to sign a confidential disclosure agreement with you.

Should I hire an agent to promote my invention?

Hiring an inventor’s agent may be the best thing for you no matter what step you are at in the invention development process. Many inventors wait until after they’ve filed and patent or made mistakes and then approach an inventor’s agent or invention brokerage firm. Sometimes this is too late, because receiving the advice of a good and reputable inventor’s agent may save you thousands of dollars, wasted time and much heartache.

Be sure to understand the difference between a ‘patent agent’ and an ‘inventor’s agent’ or invention brokerage company. A patent agent should be registered with the US Patent Office (USPTO), just like a patent attorney is. Such a registration gives the patent agent authority to charge you to file and prosecute a patent application on your behalf with the USPTO.

The terms inventor’s agent, invention broker, patent broker, and other variations of this are terms that may be used by anyone and are not sanctioned by any authority or government agency. It could be your barber. Depending on how they practice their craft and charge for their services, some of these agents or brokers may be required to register under invention development laws in some states.

Most legitimate inventor's agents or brokers are associated with a professional association, such as the Licensing Executives Society (LES), or are recognized by any number of legitimate websites for inventors, such as the National Inventor Fraud Center, Inc., InventNET.com, and others listed in the Inventor Resources section of DIMWIT.com

To look at an example, let’s say you’ve done your due diligence and homework just perfectly up to this point. You’ve filed a patent application, prepared a presentation on your own or with MY DIMWIT, and submitted your invention to what you believe to be the right companies. You then receive response letters suggesting that you must sign their disclosure agreements first or, more than likely, no response whatsoever.

Please understand that it is extremely common, if not the norm, to get a zero response from companies to which you have submitted your invention. If you’ve attempted to follow up with them on the phone, the moment the company learns that you are an inventor; you may be stonewalled and directed to an answering machine that never gets returned. It is also very common to receive a form rejection letter, giving you no indication from the company as to why your product was rejected, whether the right people saw it, whether it reached the appropriate division of the company, etc.

However, with all of this being said, this doesn’t take away from the fact that you just invested $10,000 or more in your invention project only to be stonewalled. You are not alone. Weekly I receive contact from inventors in this exact situation. In fact, I’ve been there myself more than once with my own inventions.

At this point, it might not be a bad idea to hire an inventor’s agent. Sure, you’re going to have to give up a higher percentage of your invention or have to pay a consulting or marketing fee; however you are in ‘salvage mode’ at this point. You have a substantive investment of time and money in your project and it may not be a bad idea to pay 5% to 40% of your overall budget to have an expert attempt to pull the rabbit out of the hat for you. Besides, you have much more to gain than lose in giving your project the last big effort so at least you can go to your grave knowing that you were either successful or that there was a darn good reason why your invention wasn’t a commercial commodity.

Chapter 7 of The Inventor’s Bible talks about the nuances of hiring a professional for patenting, marketing or commercialization. Click here to learn about some of the inventor’s agents and brokers that have been identified by DIMWIT.com. Remember, we do not endorse these companies, but we do strive to associate and refer to only companies that have positive and ethical track records. If you ever learn the contrary about any company that we recommend, please contact us immediately so we may hear about your experience and update our referral list accordingly.

The cost for an inventor’s agent or invention broker vary drastically, from commission only, ranging from 20% to 60%, and fee based from under $1,000 to $5,000 or more. Some companies charge a combination of both fee and commission.

I have been rejected by the big companies – is there still hope for my invention?
In addition to the answers given to the previous question, “Should I hire an agent to promote my invention?” here are some other things to consider when you’ve been rejected, especially by the major companies.

There are two very important things to know about rejection prior to losing any sleep over it. First, it is important to understand the reason for the rejection. Sometimes this can be fairly well defined in the rejection letter, but in most cases, not. You or your agent will just have to be extra diligent about contacting the company and learning more about the reason for the rejection. MY DIMWIT and The Inventor’s Bible Workbook both have sections about the types of questions to ask in an exit interview after rejection from a company. Sometimes these ‘exit’ interviews are as an important response from industry as any market research you’ll ever receive.

In the event that you determine that the primary reason for rejection is because the company’s market position, product line, category or strategic direction simply doesn’t match that of the invention, you’re in luck. Your invention is no competitive market threat to this company, and the company may candidly share their thoughts about which other companies may be more appropriate candidates for you to approach. Advice like this is hard to find, let alone buy.

Secondly, getting a deal with one of the top companies in the industry may not be all that it is cracked up to be. In many cases the largest companies in the industry have relegated themselves to high-volume sales to mass markets. Although they may be market leaders, they’re not necessarily leaders in new product development. This may be good news, though. Because of their market strength they may be in a position to purchase technologies from smaller companies after they have established proven sales.

Smaller companies with less market presence can be much more approachable and willing to develop your invention and they can act as the stepping stone you may need to get to larger retailers.

I think someone has stolen my invention -- what do I do?
In three decades of working in this industry, I can only remember two or three times that a company deliberately and maliciously stole an inventor’s idea. There is an interesting bit of psychology in the manufacturing industry. Manufactures tend to compete heavily with each other, routinely stealing each other’s ideas, major accounts and so forth. Apparently this is part of business, or at least it is for quite a few companies.

With that being said, I also know that it is very common for the same company that maliciously plagiarizes and copies its competitors products to actually honor the rights of and pay royalties to independent inventors.

Generally speaking, companies want to be the first to learn about new ideas, blindsiding their competitors with the next great new product, and the less people that know ahead of time the better. This is also why in many cases it is premature and inappropriate to advertise your invention, have a website, or other public release of any information about your invention. Even though your invention may be patented, you can take the wind out of the sails of the manufacturer that eventually wants to unveil your invention to the marketplace.

In most cases, the company you sell your invention to interested in taking credit for being the first one to introduce the invention to industry. Certainly, if your invention is unique enough, the market strong enough, and your patent protection is great enough, this is a moot point because no matter who introduces it and how, the company that acquires the rights to your invention is lucky to get it, and it’s still newsworthy that they acquired it. If your invention is lucky enough to earn this kind of distinction, you can probably cut to the chase and not take many of the precautions and steps that other inventors have to take, as described in this material. Essentially, you could auction your patent rights using an auction service such as Ocean Tomo.

The greatest misunderstanding that I’ve experienced from inventors is that they conceive an invention and six months or even a year later it is on the store shelves and they raise all holy hell about how a particular company has ripped them off, when in fact this couldn’t be further from the truth. In any major industry, especially in major markets and with major retailers, it generally takes two to three years to go through the process of introducing a new invention to the marketplace, starting from when you introduce the product to the manufacturer until it hits retail locations.

Product introduction periods are cyclical. Here is an example: As I write this, I am agent for a holiday accessory. It is June. If the manufacturer who is considering licensing my client’s invention decides to license it today, they will be hard pressed to have a working prototype ready to show to the buyers of major stores by early fall of this year. The manufacturer is even willing to produce the prototype. After making such an introduction to the major retailers, retailers will decide if they want to purchase the product, and if so, how many. This decision will be made towards the end of this year, or in January at the latest.

Once the manufacturer gets the order from the retailer and knows how many it needs to produce and the final wholesale price, then there’ll be a decision made early next year to actually have it manufactured. In June and July, one year from now, the manufacturer will start shipping product to the retailer’s warehouses. In the late summer and early fall of next year the retailer’s will start to move product to their stores and to the store shelves for the holiday season ranging from October to December, 16-18 months from now. Then it will take our manufacturer another 2-4 months to be paid. Royalties to the inventor will come around the anniversary of the 2nd year.

It would be almost impossible to get this process done any sooner and in most industries this would be a picture perfect, best case product introduction scenario. In many cases, this process would take even longer.

Therefore, when an inventor comes to me and informs me that their invention was designed, engineered, developed, presented to the industry, manufactured, shipped to the retailer and put on the store shelf within a six- to 12-month period, all I can say is, if this is true, I know to which company I am investing my next discretionary funds in the stock market.

Generally, the fear that most inventors have about the notion that their invention was ripped-off is largely overrated, undeserved, and mostly nonexistent. In fact, most inventors would be better off having their inventions plagiarized by a major company, even if done so accidentally, because they may be in a more favorable negotiation position to receive reimbursement from their invention than if they worked their butt off to try to introduce the product themselves.

Do you think you have been ripped-off by an unscrupulous invention development company? If so, continue reading below.

Did I just get ripped off by an invention development company?
The most common complaint about being ripped off is by inventors who have invested anywhere from $5,000 to $20,000 with an invention development company. Typically the development company will have applied for or obtained some sort of patent (either a utility or design patent), made a nice presentation, and submitted the invention to several companies only to receive no response, no promise, and no action. Generally the rip-off comes from the fact that the companies are simply putting more of their budget towards advertising their services than prequalifying manufacturers.

If these large invention development companies actually took a portion of the money you paid them and invested it in what you really need, there would be no budget left for national advertising, commissions to their sales people and massive profits for the owners. Here lies the primary complaint about invention brokers, who are raking in millions from the unsuspecting inventor.

This scenario is also why the Federal Trade Commission and attorney generals, both locally and federally have not been able to ever break the biggest of the invention rip-off type companies.

Although you technically may be stuck after having paid this money to an invention rip-off company, it is my experience that those inventors who have hired an attorney and become a squeaky wheel many times receive a substantial, if not full, refund from these companies. The companies do so, not to set a precedent, but rather to quiet people down. In exchange for your refund, you may need to sign a statement that you won’t say anything bad about the company and that they didn’t do anything wrong. You may feel like you’re selling your soul in order to get a refund, and maybe you can push the issue and win -- it’s up to each individual which battle they choose and how important the issue is. In any event, an attorney should be consulted to help with this, and you should learn as much as you can about the return practices and other legal proceedings that may exist between that company and their customers.

Also bear in mind that the same companies that are the worst from a rip-off stand point will carry all the standard credentials, like a Better Business Bureau seal and even seemingly credible endorsements. This makes it harder to do your due diligence and is another reason why DIMWIT.com was started to help highlight the good guys.

Contributed by Ron Docie, President, Docie Development, LLC, Copyright 2009, All Rights Reserved.
Category Inventing Advice
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