Our living today is immensely made more comfortable compared to the past century. Well, thanks to the inventors who made it possible. With the help of technology, living is easier, smarter, and better.
Although there are cases when our being dependent on technology as a whole is no longer healthy, the bigger picture still shows the enormous impact and how it affected our lives for the better.
Did you ever dream of becoming an inventor? Have you devised anything that sprung out from your bright idea? Your name might appear listed among the great authors and their inventions years from now. Changing lives for the better aside from making you rich in the process are two things you will have being an inventor.
Your device can reach the market in three primary ways. Each option provides a different level of company structuring and marketing, investment, and the return of investment. So, here is a guide detailing the options you have for commercializing your invention.
What is a license? Licensing is an agreement that means you sell the right over your intellectual property and letting someone develop the invention as well as commercially use it. As the owner of the design, you become the “licensor” while the receiving party of your invention is the “licensee.” The inventor in return will receive money as a one-time payment or royalties.
Having this option in commercializing your invention is appealing as the receiving party or licensee takes the responsibility of business risk such as accidents, from production to marketing. As a licensor, all you have to do is wait for the delivery of your royalty check.
However, opposite to the appealing factor aforementioned is the low chance of licensing success. There is only about 13% of authors who attempted to license their products that were successful according to a study conducted by Ed Zimmer and Ron Westrum. (Note: The data comes from the participants who responded to the survey, which probably slants the percentage positively. The inventors that are unsuccessful were less likely to participate in the study.)
How do you license your invention?
You may need to do research to find the right people that could use your idea. Develop and protect your device by signing a confidentiality agreement, and present the intellectual property to the licensee.
Assigning the Rights
An inventor-for-royalties also has the option to assign all rights to the product permanently for the money. But how does it work? An assignment will permanently transfer the rights of ownership to the receiving party.
If you ever happen to assign your creation, you become the assignor, and the person or entity purchasing the rights is the assignee. It’s like a house for sale, to put an assignment to an example, in which the seller no longer has any claim once a person bought the property. You may either receive a one-time payment or royalty payments over a period.
Which is it, a license agreement or an assignment?
These two terms are used interchangeably sometimes and these contracts, although different in types, at times seem to have the same effect. For instance, an exclusive license, in which the licensee has all the right to market and produce the invention.
In this regard, your lawyer is needed and must review the particular conditions and responsibility cited in the agreement to decide whether it is a license or assignment instead of only using the license and transfer.
- Manufacturing and selling your product
If you can put on an entrepreneurial hat to work with your incredible mind, you may choose to consider developing, producing, and marketing the product by yourself. This option is considerably more expensive than licensing. However, the profit and success in this endeavor all belong to you.
The advantages of manufacturing and selling your product has a wide margin financially compared to licensing. The chances of achievement according to the same study cited above showed that almost 50% of the creators who opted to market and produce their products were triumphant.
The disadvantage of selling your product is the risk that it brings. Aside from the funding needed it may cause anxiety and affect your personal life negatively.
- Working with others to promote your product
Working together with another business or academic institution shares the costs and work you’ll have to do when going solo while marketing and producing your product. However, this would also mean a split of gains.
As an inventor, the option in making your idea known to the public is in your hands. With the rise of technology today, you have a conventional way to put up a marketing strategy through social media.
You can also participate and submit your design to competing companies. In 2013, an 18-year old student, Ann Makosinski, won the first place at the Google Science Fair for her invention of a hand-powered flashlight. She then won the Intel International Science and Engineering Fair in 2014.
Either licensing your invention to a company or manufacturing it yourself, the options to take as a designer promoting a product is something that needs to be considered, as the choices will affect how you gain in return. That will also help you anticipate the funding necessary to proceed.
Do you have any thoughts to share that would help inventors promote their product after reading this article? Please let us know by posting your thoughts in the comments section.