Trying to create a market for your invention rises to another level of difficulty

Invent for an established market. Competitors are not always your enemy.

BY JACK LANDER

Working as a patent attorney’s assistant in the early 1930s, Chester Carlson was frustrated by the slow and awkward process for copying and mailing patent copies from the then-United States Patent Office.

The only means for making document copies of reasonable quality was the Photostat process, which created a black copy with white print using photography and its chemical development. It was obvious to Carlson that someone had to invent a much simpler and less expensive process, if for no other reason than to enable the patent office to rapidly copy the tens of thousands of patents that patent attorneys and inventors wished to have.

Carlson began work on a dry copying process in 1934 and was able to demonstrate his photoelectric/electrostatic process in 1938. Originally called electrophotography, it is now called xerography.

He contacted 20 companies that should have been interested in his process. Presumably, he demonstrated it to some of them but received what he later called “an enthusiastic lack of interest.”

Most likely, the complicated eight-step process turned off prospective licensees. Not only was the number of essential steps raising eyebrows, but the application of a high-voltage, electrostatic charge in two of them raised safety concerns. 

Finally, in 1944 the inventor, physicist and patent attorney convinced the Battelle Memorial Institute of Columbus, Ohio, that his process could be reined in, automated, and housed in a cabinet that would not reveal a mechanical monstrosity. The first Xerox® machine was produced in 1958. 

What can we learn from Carlson’s venture? Some possibilities:

  • Avoid complex technologies unless you have a sponsor with deep pockets, and you are patient and willing to wait out the discouragements.
  • If you go ahead with a complex technology, don’t reveal it in detail until you have at least a nondisclosure agreement. If you show it too soon, your prospect’s engineers will get involved in evaluating it. The NIH factor (not invented here) could kill the deal.
  • Don’t invent a product for which there isn’t yet market demand. Offices in 1938 were getting by with carbon paper and the printing press. They had no hint that a paperwork revolution was a few years ahead.
  • Don’t invent a product for which you will have to create the market. Once the product is on the market and its value is understood, it may create its own market. It may even change the nature of the work and become a practical necessity, as the cellphone did. But launching such a product is risky and expensive.

In the previous issue of Inventors Digest, I wrote about Robert Kearns, the inventor of the intermittent windshield wiper. Kearns’ invention was up against Ford’s attempt to develop a time delay for the vacuum-operated wiper. (Wipers were powered by the vacuum from the vehicle’s intake manifold at that time.) So, the need for his invention was already understood.

But in Carlson’s case there was no practical office copier, so he had to convince prospective licensees that a substantial market was waiting for fulfillment. It might seem obvious that managers of our large corporations would immediately grasp the opportunities presented by invention, but don’t depend on it.

The difference between Carlson’s and Kearns’ situation may seem slight, but these details often make the difference between success and failure.

Licensing principles

Is it possible to state principles that offer general guidance for the licensing of inventions? Sure. But such principles are not absolute. Exceptions exist.

So, here goes:

    • Invent for an established market. Competitors are not always your enemy. If your invention offers one or more benefits that your competition does not, you should be able to command a share of the market.
    • If you must invent for a market that does not yet exist, attempt sales before you attempt to license. Catalogs and shop-from-home vendors, such as QVC and HSN, are market channels that introduce novel products. You will probably need a financial partner. Production of a sufficient quantity for market testing is expensive.
    • Before you invest in a patent and a prototype, assess the market for its position on its life cycle. You are looking for the “sweet spot,” the position on the upslope of the life-cycle curve where you find one or a few competitors but not so many that your product will be overwhelmed.
    • Become informed about patents. They aren’t foolproof. They are easier than ever to challenge and break. Sometimes success is better achieved by getting into the market without a patent, and getting out when the profit dries up. Hire a patent attorney  you sense you can trust to give you objective advice on the overall theory and practice of patent protection.
    • In the end, both Carlson and Kearns succeeded, even though each was on the verge of failure one or more times in his long venture. Be aware that the cases of failure often go unnoticed, and there probably are far more of them than those that succeed.
  • Avoid the “inventor’s dream” of inventing something that everyone needs or wants. Stick with inventions having a limited market that you can license to small- to medium-size companies. If you were successful in inventing something everyone would buy, you would probably face immediate, large-scale competition that would bury you. Also, as in the case of Robert Kearns, inventions that have highly lucrative markets may find opposition from self-righteous industries or companies that claim inventions in their field are theirs by right of “manifest destiny.” And, of course, you’ll face a legal staff that won’t accept a verdict of “guilty as charged.”

At minimum, the above principles should be used as a checklist before you begin spending a significant amount of money on your latest great idea. Infatuation can get you in trouble.

That’s all for now. Gotta run. I’m expecting a phone call from a General Motors vice president.