Selling your Invention

 

Jane Lambert

The European IP Helpdesk has recently published a fact sheet on intellectual property assignments entitled Commercialising Intellectual Property: Assignment Agreements which can be downloaded from the EU Publication Office.  I mention it because the European Patent Office's Inventors' Handbook suggests an outright sale of a patent, patent application or other intellectual property right as a possible way in which an inventor can exploit his or her invention.

In my experience, it is rare for inventors who are not employed by companies in research and development or universities in academic research to assign their inventions to a business that is established in the industry for which the invention was created.  As I explained in How to Make Money from your Invention: Licensing on 15 Sept 2017, it is hard enough to find a business that is prepared to take a licence.  Most are even more reluctant to carry out due diligence and pay a lump sum to an inventor from outside their industry.

It is much more likely that a business that has developed an article that does not fit in its product range or a process that it is unlikely to use may offer its invention to others.  In the United States, there are established online and physical marketplaces for the sale of intellectual rights.  That is not yet the case here though there are businesses like Inngot Limited which will prepare an intellectual asset for sale.

Both potential purchasers and vendors should take legal and tax advice before embarking on negotiations,  The vendor should satisfy itself that it will never need to use the invention or the work leading up to its creation again.  If that is not the case it will need to negotiate licences.  The purchaser should satisfy itself that the vendor is entitled to sell the invention, that its use will not infringe other parties' patents or other intellectual property rights and that the patent, patent application or other legal protection is sufficient,   A mechanism for valuing the intellectual asset will have to be agreed.   In the UK and most other countries, the assignment must be in writing and signed by all parties.  The assignment should also be recorded at the intellectual property office of every relevant country.

Anyone wishing to discuss this article may call me on 020 7404 5252 during office hours or send me a message through my contact page, 

No Invention Left Behind - Making Money from an Invention

Author SimonTrew
Licence CC BY-SA 3.0 
Source Wikimedia Commons

Jane Lambert

If you are an independent inventor - that is to say, an inventor not employed in a capacity in which you are likely to create an invention - there are two ways by which you can profit from your  invention. One is by manufacturing and marketing the invention yourself as Percy Shaw did with cats' eyes (see Well at least a Yorkshireman invented Cats' Eyes 20 July 2014 IP Yorkshire). The other  is by licensinBIPCCase for Inventor Academies 27 Jan 2018.

As many of the inventors I see in my IP clinics or at local inventors' clubs are of a certain age  it should be noted that a lot of help is available for older people who wish to open businesses. The European Commission recognizes that senior citizens are increasingly interested in becoming entrepreneurs and is exploring how to benefit from the knowledge and skills of seniors, and how to ensure that they are able to go into business for themselves (see the Senior entrepreneurs page on its website). The Commission has published a Senior Entrepreneurship Good Practices Manual which presents 24 good practice examples from around the EU including the UK.  One of the more interesting initiatives mentioned in the manual is the Latvian Inventors Association's mentoring scheme.

Licensing or assigning an invention is often seen as an easier option than going into business but that is not always or perhaps even usually the case.  Someone with an established business has to be persuaded to set up a new production line and distribution channel for a product that he or she did not invent. Such a person will require a lot of persuasion especially if the inventor has no knowledge, experience or status in the industry. The established business owner will require the inventor to show the owner how the business will benefit from the invention which means that the inventor will often have to do much the same business planning and market research for a licensee as he or she would do for him or herself.

This is the third of a series of articles entitled "No Invention Left Behind". The others are The Case for an Inventor Academies and the WIPO's Inventor Assistance Programme. The next will be on the IP law that every inventor should know.  Should anybody wish to discuss this article or invention generally, he or she should call me on 020 7404 5252 or send me a message through my contact form.

How to make Money from your Invention

Jane Lambert

So you've invented something. Congratulations!  That was the easy bit.  Your challenge is to make money from your invention without losing your shirt, your home, your marriage or even your mental health. I am not being flippant.  In all the years that I have been practising law, I have known far more inventors whose lives have been ruined by their inventions than those who have become rich from them.

The reason why bad things happen to inventors is that they allow themselves to become obsessed with their inventions. Obsession clouds judgment which leads to bad deals and bad decisions.  Often there is only so much that an inventor's spouse or partner can stand. That is what leads to family breakdowns. Money and relationship problems can lead to depression or worse.

In many cases, those misfortunes could have been avoided by seeking good advice at an early stage. Now intellectual property advice can be expensive but it does not have to be. There is a lot of good advice on the internet for free.  One of the best sources of advice is the Inventors Handbook on the European Patent Office website.

The opening words of the Handbook are as follows:

"The purpose of this Inventors' Handbook is to provide you with basic guidance on all the key stages of turning an invention into a commercial product. Or perhaps we should say the key stages of turning an idea into an enterprise, if we are to widen our definition of 'invention' to include novel processes, business methods, social interactions etc. Though invention has traditionally been associated with manufactured products, it is now better understood that new wealth has always been created primarily from new knowledge, or novel uses of existing knowledge."

I would invite readers to read the rest of the page which stresses the need to reduce risk and control costs and that is where someone like me can often be of assistance.

The next passage I should like you to read right now is Exploitation Routes. The page begins with the words:

"There are basically four ways of exploiting an invention:

• A licensing agreement with a company

• Business start-up: get your idea to market yourself

• A joint venture 

• Outright sale of your idea."

It also warns readers to take care when dealing with invention promotion companies.  Over the next few days, I shall be exploring each of the above options and explaining where you can get more help.

If you want to discuss this article, call me on +44 (0)20 7404 5252 or send me a message through my contact form.