Search, Seek and Deploy

By Jack Lander

Our February 2011 cover piece, Unlocking Open Innovation, confirmed the hearsay that’s been circulating for a few years now: Many companies have done an about-face on receiving invention proposals from inventors.

So, now what? Should we just find any company, spill our guts in a long submission letter, and hope for the best?

I suggest no.

First identify companies that fit your invention. This isn’t always easy. The names of conglomerates usually don’t suggest the nature of all of the products under their wings.

One way is to reverse-search your product’s Standard Industrial Classification (SIC) code, known since 1997 as the North American Industrial Classification System (NAICS). The U.S. Office of Management and Budget developed NAICS for gathering statistical data, but NAICS offers inventors a gold mine of corporate information.

Go to www.naics.com, click the “code search” link atop the page, and enter your key word(s) in the “common keywords” field. This will reveal the NAICS number for the manufacturers you’re seeking.

Suppose you invented a new plastic bag for sandwiches and the like. Enter “plastic bag” and, voila, up comes number 326111, among others.

Armed with that number, go to webstersonline.com. Don’t be fooled – it’s got nothing to do with the dictionary. It’s an online business and product directory.

Click on the NAICS tab at the top of the page, enter your NAICS number in the indicated field and you’ll get a list of companies that produce plastic bags.

I suggest you also search other resources, including the former Thomas Register of American Manufacturers, now known as ThomasNet.

OK, now you have dozens of candidates – mostly companies you’ve never heard of. Your next step is to check retail stores and Amazon for similar products and add their manufacturers to your list.

Now, go to the websites of each company and determine if its line of products is suitable for your invention. A garbage bag specialist won’t be interested in a sandwich bag.

If the company’s website doesn’t have outside product submission guidelines, contact the marketing director, say that you have a plastic bag invention and ask how to submit it. If the company doesn’t have a standard response for submitting ideas and inventions, you may have the wrong candidate.

In any event, savvy companies generally will send you their policy statement for submitting ideas – they won’t consider your submission unless you agree with it and sign.

Many companies will insist you have a patent before they’ll deal with you. After all, until your patent issues, its claims are merely tentative.

You can attempt to deal with the company armed only with your patent application, in which you may have wonderfully broad claims. But most patents, if they issue at all, will not issue as written by your agent or attorney.

Patent examiners either eliminate or water down most claims. This poses a problem of how to form a licensing agreement on an unreliable document – your patent application.

Some companies may look at your proposal before your patent issues, but you’ll likely sign away all of your rights except those granted by your patent, trademark, etc.

In other words, companies will assume your invention is in the public domain and is free to use by them without compensation until you prove it isn’t by presenting your patent. And the royalty rate will almost certainly be finalized only after your patent issues.

Now, knowing what the terms are, and narrowing your list to your final candidates, what do you send?

Some companies provide guidance; others leave the format to you. I suggest three items:

  • A sell-sheet pitched to the ultimate consumer
  • A written proposal pitched to the company
  • And a brief cover letter.

The sell-sheet shows the company the benefits of your concept to consumers in the same way the company would. If you can’t convince consumers to buy your product, how can you sell your concept to a company? The sell-sheet clarifies the nuts-and-bolts benefits of your invention in a clear, concise and graphically enhanced way.

Your proposal deals with the benefits to the company, not to the consumer.  Mainly, you want to convince the company your invention will either complement its product line, that is, creates a new market, or will be superior to and replace a product it now offers, thereby increasing the company’s existing market.

(Note: The latter approach may arouse defensiveness or otherwise step on certain corporate toes. The “not invented here” or NIH factor is still a part of human nature. Include a copy of your patent or at least list its number.)

The cover letter should only tell what you are sending, who it is to go to and to whom and where to respond. Leave the selling to your sell-sheet and your proposal.

A good sell-sheet consists of:

  • A tagline (headline) that defines the product and emphasizes its main benefit.
  • A photo of the product, preferably in use, below the tagline, left side of sheet.
  • A bulleted list of subordinate benefits alongside the photo.
  • Testimonials from users below the photo and bulleted benefits.
  • Possibly feature details, and supporting photos, on the reverse side.
  • Your company or personal contact information.

Inventors tend to think in terms of features. After all, that’s what we invent. But a potential licensee thinks in terms of benefits – to itself and its customers. Benefits arise from features, of course. If you must provide details about features, keep them brief and always relate each feature to its benefit.

If it doesn’t have a benefit, why mention it? For example: “Our stainless steel fittings can’t rust or corrode.” Features should be placed low on the sheet or on the reverse side.

As for your proposal, an effective format is AIDA:

  • Attract attention
  • Arouse Interest
  • Create Desire
  • Call to Action

I’ve seen proposals that started with how the inventor got the idea, the struggles he went through, etc., etc. Forget it. They don’t care. They care about this: Will your product make them money? That’s the bottom line.

AIDA also is used for your sell-sheet. The photo(s) and tagline attract attention.  The bulleted benefits arouse interest, desire and action.

A history of sales, if you have one, is one of the most compelling proposal attention getters, and satisfies AIDA’s first step. Lacking a significant sales history, comments from retail managers and buyers who are interested in your invention can help. Use actual names and stores to convey authenticity.

“Arousing interest” is an extension of the first step. You might include a few unsolicited letters you’ve received from satisfied users. If necessary, solicit them. It is surprisingly easy to obtain these letters along with permission to use them.

“Creating desire” can be accomplished by telling the strong points of your patent.  Review your patent’s claims, which will describe features, and tell how such features benefit the user and compare with what’s currently available.

If your patent hasn’t yet issued, your position is not strong, but you can refer to your claims as written in your patent application and quote your attorney’s opinion of your chances of getting such claims granted.

Note: many attorneys advise against disclosing your claims until your patent issues. Speak with your attorney about this. The disadvantage that I see is that by revealing the details of your tentative claims, you may be inviting the company’s patent attorneys and engineers to figure a way around them – assuming they’ll issue – and thereby deprive you of your license.

The last point, “call to action,” is satisfied by simply stating what you aim to accomplish, which usually is to license your patent and any related intellectual property.

This is not the time to get specific about money, such as the upfront payment and the royalty rate you expect, or that you want to be hired as a consultant if the company agrees to license your patent.

Those are all negotiating points and you aren’t there yet.

If your proposal is directed to your first-choice company, consider adding something like this: “This proposal is offered for the first time, and will remain exclusive to (name of company) for a period of 60 days.”

There are myriad other approaches. But for most of us, the three-item approach that follows the AIDA format work well.

Good luck!

Contact [email protected]

Editor’s note: This article appears in the  April 2011 print edition.

Not a subscriber!? Click here now!