By Jack Lander
If you intend to license your invention rather than produce and market it yourself, you’ll need to submit your invention to a company at some point.
For most inventors this process is daunting and discouraging.
The process of submission and getting a conclusive response is often slow. More often than not the answer is “no thanks.”
Rejection is especially disheartening. After a few tries, many inventors retreat and their invention dies of old age.
Here’s how you can dramatically increase your odds of success in licensing.
Understand that licensing involves quantity and persistence. If one company isn’t interested, another might be. In any case, you should find out why each company isn’t interested. Don’t assume that your invention lacks merit until you have enough feedback. Some of the reasons for rejection of a good invention are:
- The company’s marketing structure doesn’t quite fit your product. Just because the company makes products similar to your invention doesn’t mean that it markets to the kind of customers who would buy what you’ve developed.
- The company is not open to suggestions from outside. Some companies retain a certain arrogance about inventors. They feel that they know their field better than any amateur outsider possibly could. That attitude is rapidly changing, but the majority of companies still aren’t openly encouraging outside submissions.
- The company has a large backlog of products that it is developing and doesn’t have the need or desire to take on more.
- The company is going through a restructuring – merging, being sold, downsizing, etc. – and is focused on such changes. Or the company may be losing money and has no taste for investing in new products. Unfortunately, your timing is off.
- The person charged with reviewing submissions has a greater incentive to protect his reputation rather than to risk failure by introducing a new product he doesn’t consider red hot. The director of marketing, or his/her close subordinates, and the company president are often the only risk takers. Suspect all others. For example, if the engineering department reviews your invention, jealousy may prevail and influence a poor evaluation. Engineers are not marketers.
- The company has no internal procedure for handling submissions. This is especially true of medium-size and smaller companies. Your submission may pass from desk to desk without anyone making sure the review gets done. I’ve heard horror tales of lost correspondence and even lost prototypes.
- The company has lost its initial creative spirit and it concentrates on well-established products. It lacks foresight and the resources and will to risk developing and introducing new products.
Submit to several companies – maybe 10 or even more. Don’t quit until you’re convinced that your invention is not marketable for valid reasons.
A “no” answer is no of consequence unless a valid reason is given that persuades you that your product won’t ever compete successfully in the marketplace. Remember the seven reasons above for why companies reject submissions. Never assume a rejection is a reflection of the merits of your invention unless you get a specific and convincing reason.
Most companies will try to “let you down easy” by saying something vague such as, “Your invention does not fit our needs at this time.” The only significance of such rejection is that it represents one of your anticipated “no” answers.
Going in through the “back door” greatly increases your odds of a fair evaluation. If you can gain the ear of the director of marketing or even the company president, obviously your chances of success are greater.
It’s not as difficult as you might think. These executives are often at their company booth at trade shows. A marketing director who would be protected by a “gatekeeper” when back at the company will shake your hand and give you a few minutes of conversation at a trade show.
Caution: nearly all companies of significant size will have a policy and procedure for submitting ideas and inventions. Contact your list of prospective licensees and ask for its submission procedure.
You’ll have to sign a statement that limits your rights to only what is covered by your eventual or issued patent. By submitting your signed agreement, and carrying copies with you to trade shows, you can overcome any objection that such an agreement must be processed before any executive can talk face-to-face with you.
Your mission at the trade show is to meet the marketing director, etc., and to have him or her as an inside contact for future communications. There’s nothing wrong with presenting your sell-sheet at the trade show, but don’t expect a lot of action. Most attendees return with a barrel full of flyers, brochures and business cards, few of which are acted on.
So, get a business card, make any pertinent notes on the back and count on contacting this person after the show. If you phone, you may find that his or her “gatekeeper” (administrative assistant or secretary) will guard his time and you won’t get through to talk directly.
I’ve found that rather than trying to get around the gatekeeper, you’re better off enlisting this person as your main contact. First of all, you’ll nearly always get through to speak directly with her or him. And secondly, most will appreciate that you feel confident in working through them. (I once obtained a book endorsement from the recent Director of the Patent Office by working entirely with his secretary.)
If you can’t attend trade shows and you feel that you must operate through the mail room, find the name and correct spelling of the director of marketing. Ask your reference librarian for directories that provide the names and titles of public corporation executives.
Such directories are often out of date. Be sure to phone the company operator and ask if the name you have is current and correctly spelled. You can also make a cold call to the company and simply ask for the name of the Director of marketing.
In any event, don’t just mail your sell-sheet and cover letter to a title. That almost guarantees they’ll expire via the round file. Again, be sure that you’ve signed the submission agreement, and sent it back as instructed. Mention in your cover letter that you have done so.
A question that I’m frequently asked is whether to wait for the patent to issue or to negotiate based on your application, whether it’s a PPA (provisional patent application) or a utility patent application.
There’s no pat answer. If your invention is high-tech and state of the art, exposure before you have the patent in your hand may spark competing ways to achieve the objective of your invention.
But waiting two or three years for the patent to issue may enable a company with an approach that’s not as good as yours to take over the market. Remember the battle of VHS vs. Betamax?
The shortcomings of each of these systems, and Sony’s policy of forbidding porno recordings on Betamax, caused a complex battle that eventually VHS won. The point is many factors enter into who wins high-tech battles. Waiting until a patent issues may be a fatal mistake.
If you have a low-tech invention, the best tactic may be to try to license your PPA, and get your licensee to write, file and pay for the utility patent.
The sell-sheet is the most effective way to “sell” the benefits of your eventual product. This single sheet of paper enables every level of management from the president down to the design engineer who may take over the project to understand in a couple of minutes why your invention is a winner. (For more details on licensing your PPA and making your sell-sheet, contact me for my reports #51 and #26. They’re free.)
I’m often contacted by inventors whose patents are seven years old or even older. Potential licensees have a suspicion about such patents – that they’ve been “shopped all over and no one wants them.”
In most cases, it’s simply that the inventor lost faith, will, courage – call it what you will. But knowing what to do, and the persistence to do it, will prevent an indecisive end to your invention.
Don’t let it die of old age.
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