Should I Manufacture, License, or Sell My Idea? - Part 1
By: Brian Rayve
Many independent inventors wonder how to best make money from their new product idea. However, they usually don't understand the three main options that are available: manufacturing and selling products based on the idea, and licensing or selling their inventor rights.
I will cover licensing in general in this article. The types of licenses, and manufacturing, selling, and the best course of action for you will be covered in subsequent articles.
Licensing typically is only available when the inventor has an issued patent or a patent that will issue in a few months. That is because you need to have patent rights to enforce and thus license (in essence, grant an exception to) to another person or company (legal entities).
The patent rights are the right to exclude (stop) other legal entities from making (manufacturing), using (typically end users or customers, selling (typically the distribution system of wholesalers, retailers, and sales persons), and importing any product that is covered by your patent.
Note that contrary to the belief of many inventors, the scope of protection of a patent is delineated in the claims at the end of the patent, and NOT by what is discussed in the remainder of the patent, which only supports the claims.
The licensor (the inventor) receives periodic payments (royalties) from the licensee (the legal entity that is granted the license) based on an agreed to formula. This formula typically includes the number of the products (units) sold and either: 1) the wholesale or retail selling price of each unit; or 2) the gross or net profit per unit.
Don't have "patent pending" yet for your new product idea?
Click on or copy and paste the following URL to your browser to file your utility patent application:
www.inventionpatenting.com/file_a_utility_patent_application.html
Don't have the money for a utility patent application? You're still in luck!
Click on or copy and paste the following URL to your browser to file a provisional patent application:
www.inventionpatenting.com/file_a_provisional_patent_application.html
Don't lose out... when protecting your invention by filing a patent application is easy and inexpensive!
Best regards,
Brian R. Rayve, Esq.
Owner, InventionPatenting.com
Brian R. Rayve, founder of InventionPatenting.com has over 28 years of combined experience in the new product design, development, and the legal fields. His background in product design and development includes such diverse industries as arc welding equipment, aerospace, off-road earth moving vehicles, medical equipment, and soft drink bottling equipment. He earned a Bachelor's Degree in Mechanical Engineering, a J.D. in law, and an MBA.
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