By: Trevor Lambert, President
Moral of the Stories
As I look back at these and many other heartbreaking stories it is difficult not to get depressed and frustrated all over again. However, my goal is not to paint all inventors as unreasonable, greedy prima donnas. Rather, my hope is that these extreme cases of inventor mistakes will provide guidance for budding inventors on what to avoid.
When looking at these three stories, you should notice that none of the mistakes the inventors made had anything to do with the development of the product. The patents were filed or issued, the prototype was well designed and the marketing message was on target; but still the deal did not go through. In each case the mistake was more mental or emotional during the interaction with the licensee.
Over the years, I’ve noticed the volumes of available instruction for inventors on how to develop their invention, but very little can be found on what the inventor can expect when they engage in talks with the licensee. In an attempt to fill that void, let me make a few observations that may provide some insight.
First and foremost, an inventor needs to realize that licensing requires a level of synergy between the company, invention and inventor. The invention should fit in with the company’s product line and areas of distribution, and the two parties need to have a positive working relationship. The company is considering entering into a long-term relationship to develop and market your invention and wants to be reassured that the inventor is stable. It may be tempting for inventors to think the company is trying to steal or knock-off their invention, but resist that urge. In all my years of pitching products I have found that the companies behind the recognized brands in any industry are usually very trustworthy. Of course you should protect yourself by filing the patent, etc., but do not question their intentions or let suspicious thoughts cloud your judgment.
Secondly, it is critical that inventors realize that they are not negotiating a used car purchase. The company on the other side of the table is composed of sophisticated professionals and thus any demand, term or condition should be backed with solid supporting data. In particular, carefully consider what you are hoping for related to the royalty rate, minimum sales volumes and the advance. Do not pull numbers out of the sky; rather perform market research so that your offer is within the range for that industry.
Finally, remember that putting together these deals usually takes time – months not weeks. Depending on how developed your product is, the company will be investing a large amount in tooling, engineering, packaging, marketing, inventory, etc., and they will likely want to consider the product carefully from a number of different angles. They may ask you if they can pitch the product to some of their larger customers (or retailers) before licensing, or perform other due diligence, such as a focus group or prior art search. This is a good sign so be patient, yet at the same time follow up and try to get the company to provide you with a timeline and benchmarks for putting the deal together.
About Lambert & Lambert:
Lambert & Lambert is a contingency-fee based invention marketing and patent licensing firm that specializes in consumer products. Based in Minneapolis, Minnesota, Lambert & Lambert provides services to inventors, product developers and small companies throughout the world and currently has products selling in numerous retailers.
Tim Sherman, Director of Customer Service
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