When it comes to protecting your creativity, my first piece of advice is to focus on working with companies that embrace independent product developers. I wrote about which industries and what kinds of companies are most likely to embrace you here.
For starters, make a habit of investigating potential licensees before submitting any of your concepts. Doing so is easy: Simply Google the company's name and the words 'lawsuits' and 'complaints.' Are there any red flags? When you can, seek out referrals. There are thousands of companies that want to partner with you and will treat you fairly. These companies will be the easiest to work with by far, especially when it comes to negotiating a contract.
What are some other red flags you should be aware of? If a company states it only looks at patented ideas, it hasn't truly embraced open innovation. Many companies have begun using online submission forms to better manage the ideas they receive. If you're asked to sign something, read it very, very closely. Just because a company says it's open to ideas doesn't mean it's genuinely interested in working with independent product developers. I've come across forms that essentially commit the signee to giving up all of their rights to their idea, which is ludicrous.
A couple of weeks ago, I explained why I believe in the value of perceived ownership. Emphasis on perceived. The idea that you can truly own something, that it's yours, is an illusion. The reality is most products on the market today are not patented. Because consumer products circle in and out of the market so quickly, speed to market is far more critical. And if you are copied, I say, congratulations! You're doing something right.
The most efficient way of establishing perceived ownership if you want to license your ideas is by filing a provisional patent application, or PPA. The United States Patent and Trademark Office introduced the option of filing a PPA in 1995 with the specific intent of providing a "lower-cost first patent filing." Ninety-nine percent of the concepts my students license are protected with just a PPA.
PPAs are incredibly useful. For one, they're affordable to file — just $65 if you're classified as a 'small entity.' More importantly, they enable you to test the market with perceived ownership. After you file a PPA, you have the ensuing 12 months to decide whether you'd like to file a non-provisional application. During that period, you're legally able to describe your innovation as "patent pending." If you decide to file a non-provisional application, you retain your early filing date. Which is also beneficial, because when the America Invents Act was signed into law in 2011, the United States' system became "first-to-file," no longer "first-to-invent."
Note: relying on a provisional patent application to establish perceived ownership is not the right strategy for every idea. Some industries — like medical, automotive, packaging, and consumables — require patents. Patents are particularly important when dealing with Fortune 500 companies. If you want to protect a big idea, an idea you envision selling in the marketplace for many years, you're going to need to file more than one patent to establish your ownership over it. You'll need an entire intellectual property strategy, including multiple patents, in that case.
One year is more than enough time to shop your innovation around to potential licensees, if you hit the ground running. Are they intrigued? Do you need to modify your innovation in some way? This is your opportunity to gather critical feedback about your concept. Investing too much time, energy and money into an idea before you've tested it doesn't make sense. You need to know that it's an idea companies are interested in before committing yourself to developing it any further.
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A well-written provisional patent application — an application that stops workarounds and copycats — is all you need to license an idea. PPAs establish enough perceived ownership for a potential licensee to sign an agreement with you. I know because I witness it happen week in and week out.
This perspective upsets a lot of people. Patent attorneys and other professionals believe you have to own something in order to get paid for it. In my experience, that's simply not true.
A well-written provisional patent application is all you need to license an idea.
Why are companies willing to license concepts that aren't patented? Because of what I refer to as a "gray area." If you decide to file a non-provisional patent application, will it issue? You don't know. And crucially, neither do they. No one knows for sure. If your PPA is thorough and written defensively, the company in question doesn't have very many options. It could walk away from a great idea, which doesn't make a lot of sense. Or it could decide to go forward with just patent-pending status.
This strategy works because what's truly important is selling, not protection.
Better still, you can and should get your licensee to pay for a non-provisional patent application to be filed in your name, because doing so benefits you both. (More on that strategy later.)
Next: How to File A PPA That Actually Has Value.
Sir:
First of all, congratulations and salute to your achievements. I actually have an idea and ever since I got this email on $65 to license a product idea, I got tons of ideas but am not sure how do I go about the entire procedure to lock them. Can you please help??
Anand
9376605859
This was good timing for me. Where would you suggest reading more info on well worded applications? I see an article is planned for Core77 but could use some reading info soon. thank you
Thank you so much for the articles :)
Hi thanks for the great articles, I am a industrial designer by trade and until recently I have focused on designing and developing products for client. Licensing one of my own products however has always been a dream of mine but frankly I had no idea where to start. I would just like to thank you for the guidance you provide with these articles and your book.
I loved both your books. As a professional product designer your information was exactly what I needed to go forward with an idea I had. It inspired me to come up with my own product and file the provisional patent just like you said. Now I'm going to explore licenses as well. Thank you !
Very interesting story, I like. Could we get more of these, please.
It's great to see this side of things, keep the articles coming!
Before I dive much further into product licensing strategy, I want to describe some of the broad conclusions I've reached about protecting your creations and the value of intellectual property. To do that, I need to explain a little bit more about my background first, because the conclusions I've reached
In my last column, I introduced a few tenets of basic product licensing strategy. Namely, that it's unwise to spend too much time developing a concept before getting feedback if you want to do this for a living. To put it more bluntly, you will need to check your ego
Companies are increasingly willing to look for new product ideas beyond their four walls. And why wouldn't they? Embracing open innovation is fiscally sound, not to mention rational: Creative people want to work for themselves. In the U.S. alone, contingent workers are predicted to exceed 40 percent of the workplace
Lazer Tag Kit In the mid-80s, I had the fortune of working at the red-hot toy startup Worlds of Wonder in its design department. Worlds of Wonder brought Teddy Ruxpin, the animatronic storytelling teddy bear that became a bestseller, to market, as well as similarly innovative products like Lazer Tag.
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