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Invention Management Fundamental advice for new inventors offerred
by Wilhelm Law Service –
specialists in the management of Intellectual Property You have an invention. You wonder, “What should I do now?” You will need help managing your invention. We at WLS can help! Topics to consider (jump to a topic by clicking on it):
In all cases, you eventually need to develop the idea to the point where you have product ready to sell. You will need a preliminary market evaluation. If the preliminary market evaluation indicates a profitable market, proceed with the project. If not, terminate the project as cost effectively as you can. But the first thing you need to do is determine if you can to get patent protection. For that you need to consult with a patent attorney or patent agent. Email us at iplaw@wilhelmlaw.com, call us at 920-831-0100 for an appointment or fax us at 920-831-0101. Our attorneys can help. We can work over the phone if you like. The law says you can do the patent work yourself. But, most people are not able to do quality patent work which will stand the test of a court challenge when the patent is infringed. Our patent attorneys have been highly trained in this very specialized area of law. When dealing with inventions, everyone needs to consult with the experts. Some people try to get the patent themselves, thinking they will engage the services of the patent attorney when they hit a problem. This does not work well. History tells us that most people who try to do patent work themselves make at least one mistake which cannot be corrected before they engage the services of the patent attorney. Once you have us working on the case, we will help you decide how best to bring the product or service of the invention to market. You can start your own business, license the invention to someone else, or sell all rights to the invention. Starting your own business requires the most work and finances from
the inventor, but holds the highest probability of success.
Much depends on you, although we can serve as your guide. All responsibility for everything that happens to the invention and with the invention ultimately falls on you, the inventor. You enlist the best help you can find. But ultimately, everything depends on you. That is a heavy load at times, but we have the experience to help as you need it. Contact us at iplaw@wilhelmlaw.com, or call us at 920-831-0100 for an appointment. Every invention needs a champion in order to succeed in the marketplace, and in most cases the champion is you, the inventor. A champion is someone who lives and breathes the invention, someone who is wholly committed to the success of the invention. The champion will not take "no" for an ultimate answer. He/she adamantly refuses to give up. The champion understands that there will be disappointments, that there will be setbacks. He acts like he doesn't care about those setbacks and disappointments. The champion uses these events which appear to be negative as learning experiences which enable him/her to further pursue the positive aspects of the invention. The invention may need to be modified, re-focused, re-presented. The management plan may need to be revised. Expectations may need to be revised. Timing may need to be reconsidered. It is important to understand the emotional aspects of the disappointments which are always associated with inventions. After all, invention, by definition, means that the inventor is going where no one else has ever gone. You are unique. Your are different. You are special. You are one of a kind. The high level of the unknown aspects of managing the invention can
be the inventor's downfall if he does not surround himself with high
quality advisors.
Some inventions don't make it. Will yours be one of them? No matter how committed the champion is, no matter how hard he/she works, no matter how capable or how qualified she/he is, no matter that he/she refuses to accept "no" for an ultimate answer, some inventions will never be successful commercially no matter is done. In reality, a large fraction of the inventions which people develop are not commercially successful. In many cases, the projects fail for lack of proper management. We invite you to engage our experience to help you through the many decisions which must be made. But there are some projects for which there is no realistic prospect for success. Thus, while a project demands persistence, and a total commitment on the part of the champion, the champion must also be practical. Good assets should not be thrown away when it is clear that the project is headed for failure. There comes a time when commitment, persistence, resources, qualifications, plans, and execution actions are overwhelmed by the reality that a required qualification of the project is not being met, and there are no known ways of solving the problem. It may be time to terminate the project. And this reality does strike a larger fraction of projects than we would like. The big questions are "Will
it strike yours?" "How will you know if and when it strikes
yours?" While the ultimate responsibility is still yours, again,
our extensive experience enables us to help you discover the answers
to those questions.
Managing the invention is a balancing act. The measure of a successful champion of inventions, as in all of life, is to be able to balance the demands of promoting and championing the invention, against the reality of what progress is, or is not, being made, what the market is telling you, what options appear to be available, and what options are not. Yes, the champion must faithfully fulfill his role as champion. But he/she is also required to be a realist. Being the champion is a tough job, because sometimes it takes a while for a new product to become accepted. It may take time for the management team to develop a marketing plan which is favorably received by customers. The cost may be more than expected - isn't it always? There are always issues which need to be resolved. There are always new questions and obstacles waiting in the wings. If you are not experienced at managing an invention, you will need help. True inventors and many entrepreneurs thrive on the unknown, live for the excitement of the discovery, the chaos which surrounds exploration. But in order for an invention to be successful commercially, the chaos of invention must be transformed to the order of the business world. The design must be fixed. Dependable markets must be found and secured. A financial model must be developed, and must have enough basis in historical events to satisfy a skeptical banker. Even if you don't expect to use bank financing, the financial plan should still be developed with a banker's skepticism as the standard. Without that standard, the risk/reward ratio of the project will be out of balance. If the ratio of risk to reward is too high, then there is no logical reason to proceed with the project. As much as the inventor's love of adventure, love of the unknown, love
of exploration, drive the inventor to invent, that same love of adventure
can cloud the inventor's judgment, the inventor's ability to achieve
the required balance between the chaos of adventure and the order of
the business world. This is why it is important that the inventor secure
to himself a small group of trusted advisors, namely the management team,
who can, first, do things the inventor does not do well and, second,
be objective regarding the realistic prospects for success of the invention.
Bringing any invention to market is a high risk project. Any objective inquiry into the world of inventions shows clearly that the risk of failure is high, that the prospect of success is low. Such inquiry can also show that there are certain things you can do to improve your chances of success. There are paths which have almost no chance of success. There are paths which have average chance of success. And there are paths which yield above average chances of success. The objective here is to provide directions, plans, and paths which increase the chances of any one project being successful, as well as increasing the chance that, if you follow the paths with multiple inventions, the overall cumulative chance of successfully launching a new product is substantially improved. Each step forward moves the project closer to success. Most steps provide a learning experience. Most steps overcome at least one obstacle. But most steps also uncover new things which need to be done, new obstacles which must be overcome. The overarching question, then, the question of balance, is whether the ongoing level of positive results in the project continues to be sufficient to overcome the perceived negative aspects and costs of the project. Issues such as those mentioned above face every product, every day.
Every product needs to be monitored and managed, and an action plan executed,
daily. The product of an invention is no different. It must be treated
and managed like any other product on the market, professionally, constantly,
and in light of rationally-developed objectives and milestones. The remainder
of this discussion focuses on those objectives, those milestones, how
they are developed, how they are managed, and how the action plan is
executed.
You need a plan. The following steps outline a typical process which can successfully be used to manage the invention. The steps are given in the order in which they should be started. Once a step is started, some aspects of that step are typically continued throughout the market lives of the products and/or processes which exploit the concepts of the invention. This is especially true where the inventor continues to develop and refine the invention over an extended period of time. As with any business venture, the inventor needs the assistance of a committed team of professional advisors. Here are the basic steps. 1. Keep control. Someone needs to take primary responsibility for guiding and controlling development of the invention. Typically, this task falls to the inventor, or someone in the inventor's company. 2. Keep it quiet. Be very careful to maintain the necessary level of secrecy. Valuable rights can be lost by pre-mature disclosure of the invention to others. We can guide you through that process, as well as showing you the legal traps which can ensnare the unwary. 3. Develop the invention far enough that you can demonstrate its value. Every invention which gets any attention has value in the inventor's mind as soon as he/she conceives of the invention. But in order to make money with the invention, it will be necessary that the inventor somehow convey that value to customers in such a way that the customers, too, see value in the invention. The fact that the inventor sees value does not mean that others can see it. Indeed, the inventor is by definition the first person who ever saw value in the invention, or he wouldn't be the inventor. So it is not always true that the potential customer sees that value. Let our attorneys help you address customer perception of value. One very common form for initially expressing the invention is to produce some sort of writing. This may be a written word description of the invention, and how to make and use it. It may be one or more sketches or drawings. The drawings may take the form of a flow chart, especially where the invention is a method of doing something, where the flow chart expresses certain steps which are performed in the invention. The expression of the invention may be a combination of written description and drawings. Another common form of expression is make a prototype or model of the invention. In fact, if the invention is susceptible of being prototyped or modeled, it is a good idea to make one or more, as the making of prototypes and models is the most common tool which enables the inventor to see defects in the concept, to see improvements which can or should be made, or other ways of developing the full potential of the invention. Full development of the invention will be critical when it is time to file for patent protection. In either case it is critical that the inventor preserve the confidentiality of the invention from everyone! Inventors often think there are a few people they can tell without risk. This is typically not true. 4. Preliminary market evaluation. It is common for the inventor think that his job is done when he proves that the invention will work as intended. Nothing could be further from the truth. He has just begun. Once the invention has reached the stage of development where the inventor can prove that the technical aspects of the invention work for the purpose intended, it is time to consider whether the invention can stand up to the scrutiny of the due diligence which must accompany all prudent business investments. Namely, can the invention be put on the market and make a reasonable profit? This is a good time to contact an attorney to advise you. Nearly everything the inventor does in the process of developing the
invention and bringing the invention to market entails some amount of
investment/expense. If the inventor, or someone else, is going to invest
money in the invention, those involved in managing the invention need
to treat the invention as a business. Otherwise, no one will invest in
the invention.
The market evaluation is crucial. One of the most critical elements in developing the invention is an ongoing evaluation of whether there is a market for the invention. Can it be sold? Will people buy it? If there is a market, the next question is whether the market will support a price which will let the inventor, or some other owner of rights to the invention, make a reasonable profit. In most cases, the inventor has no training or experience in doing a formal market evaluation. And the inventor is often inclined to believe, based on his own experience and perspective, that the need is so great that any formal market evaluation will necessarily reach the same conclusion he has already reached. This is often not true. Other than developing the invention to the stage where the inventor
can demonstrate that the invention works for the purpose intended, no
part of the invention management process is more important than getting
a professional, third party preliminary market evaluation. Even if the
invention works perfectly, the project is pointless, and may be financially
disastrous, if there aren't enough buyers to enable the inventor to make
a profit. The project can be just as disastrous given a population
of willing buyers, if the inventor does not find those buyers.
How do I get my idea to make me a profit? AKA - The concept-to-successful business continuum. You have an idea. Think of it as an infant. That idea needs to be nurtured through all of the steps necessary to make it a fully independent adult, able to exist on its own merits, such that it generates enough income that it supports itself, and has enough left over value to be attractive to someone else. Because each good idea needs a lot of attention, it is unlikely that you will successfully pursue more than one new idea at a time. There are at least 4 directions you might proceed with growing/developing the invention. Each is different. Each has a different set of expectations, risks, rewards, time frames. Each makes a different set of demands on the inventor. Each makes a different set of demands on other people. Each inventor has a unique perspective of his invention. That perspective will include such items as the inventor's interests, and his technical skills and resources, as well as the financial resources which are available to him. The inventor will select the direction he will take his invention based on his perspective. The four directions are as follows.
Develop the business/management plan. While starting and running the business which arises from the invention is a role which the inventor must play to at least some degree, especially early in the life cycle of the invention, most inventors are not experienced in starting and running businesses. Even a person who is experienced in running a business needs a business plan as part of the process of starting and running a business. If the inventor is inexperienced, it is even more important that he have an invention management plan as a guide to his start-up and running of the business. Ask any banker, any accountant, if there is any person who does not need a business plan. The answer will always be that all business owners need a business plan. Consider even the largest companies, such as those which trade on Wall Street - they all have business plans. So should you. Since the business at hand is that of managing an invention, we will, from here on, discuss the business plan in terms of an invention "management plan". Why bother with a Business/Management Plan? Particularly, why bother if the inventor intends to sell or license the invention, and not start a business? In answering the question, I make the underlying assumption that you want to make money from the invention. First, it is easy to spend more money than you planned, whether in shopping for a car, shopping for a house, or simply shopping for groceries or clothes. For most consumer purchases, it is generally possible to gradually pay off an excess expenditure, and whereby households can live without strict financial planning. Second, it is too easy to assume that customers will buy products of the invention. Lack of sales is a very common cause of failure of new businesses, including businesses based on inventions. The greatest benefit which successful small businesses return to their owners is typically not the yearly cash flow. Rather, the greatest benefit which most small businesses return to their owners is the money the owners receive when they sell their respective businesses. And the amount of the sales price money is largely dependent on the profit left in the business after all expenses are paid, including paying the owner a reasonable salary/wage if he/she manages the business, or otherwise works in the business. If there are no profits left at the end of the year, what you have is a "job", not a business, and a potential "buyer" of the "business" will pay only a corresponding price, namely not much. The certainty of finding a buyer for a profitable operating business can be taken to an even higher level if the inventor presents the prospective licensee or business buyer with a business plan, or an invention management plan, based on the results of the inventor's own successful market launch. Assuming successful market launch by the inventor, finding desirable licensees to fill market segments which the inventor will not reach is a reasonable expectation. The key is to present prospective licensees with a realistic management plan, which shows realistic expectation of a good profit; and to then be able to defend that management plan. Without that management plan, prospective licensees are left to reach their own conclusions without the benefit of the best available data. How do you get to the point where the business generates a profit? You develop a management plan which predicts a profit, and you work the plan. This is simple to say, but hard to do. If changes need to be made in the plan at a later date, and they will, you make those changes keeping in mind that any time you compromise profits, you are also reducing the "sale price" value of the business, jeopardizing the viability of the business as an ongoing business. The management plan must always be thoroughly reviewed by a third party professional who has no family relationship to the inventor. A typical such third party professional is the inventor's banker and/or accountant. Ideally, both the banker and the accountant are provided with copies of the management plan and their advice and feed-back are solicited. Overall, the management plan provides the primary tool which a licensee
company can use in deciding whether to investigate the invention further.
More information on business plans...
A Patent? Let's look at the question of whether you need or want a patent. Simply stated, a patent gives you the right to prevent others from taking commercial advantage of the invention. So the critical question asks whether you care if someone else begins making, selling, or using your invention without getting your permission. Restated, is it ok with you if someone else makes money off of your invention, without sharing the profits with you? If you don't care, then you don't need a patent. If you do care, then you need to consider getting patent protection. The next question is whether you will have a patent attorney do the patent work for you, or do the work yourself. In principle, the process looks fairly simple. You describe what your invention is, how to make and use it, and state your claims as to what you think is patentably novel about your invention. You send your application to the US Patent Office. The Patent Office officials look at your application, and grant your patent. It doesn't work that way! The process described above is generally true, but the reality of the process is that it is much more difficult than that to get the Patent Office officials to agree to grant the patent. And even if you do get that far, any time you attempt to enforce your patent rights, you can be sure your opponent will hire the best legal minds they can find, who will try to show the court that your patent is invalid and/or that they do not infringe your patent. Given that imbalance of expertise, between you being the one who obtains the patent, and your opponent's specially trained and experienced attorneys who seek to negate your patent rights - the probability of the inventor winning in court is fairly slim. So you need to hire a qualified patent attorney to assist you in securing the patent rights. Find the patent attorney the same way you find other members of the
management team. You ask, and ask, and ask. You interview, slim down
the field, and then make the best decision you can make, based on the
best information you can gather. Look at patents the attorney has done.
Do your best to judge the quality of the workmanship. Look for patents
which address generally the same types of technologies as your invention.
For example, if you find that the patent attorney has done only electronic
inventions and your invention is mechanical, that attorney may not be
a good fit. But if he has done several mechanical cases, and your invention
is mechanical, his technical skills may be a good fit. In general, in
a patent attorney, look for experience, matching technical skills, and
a compatible personality.
The Management Team. Earlier we alluded to the thought that the inventor will need to engage the help of other people in developing the invention into a full-fledged successful business. Why is that? How many people does the inventor need to involve? How should they be selected? The most important concept the inventor needs to grasp is that developing the invention, any invention, requires a variety of skills which is greater than what any one person can fulfill. The first permanent member of the management team, is the business attorney . The inventor needs to realize that, whether he starts his own business or licenses or sells the invention, he will need the services of a good business attorney. He will also need the services of an experienced accountant. And he almost always needs the services of an experienced banker. The only time he doesn't need a banker is if the business will never amount to much. Well, that is contrary to the inventor's expectations. So let's just say that the inventor needs a business banker as a member of the management team. If he expects to have exclusive rights to the invention, whether to
start his own business or to licensing an existing business, he will
need the services of a patent attorney . If he is thinking about starting
his own business, he should consider engaging, at least part-time, the
services of an experienced business executive who can at least guide
him through the various aspects of running a business. Congratulations on getting this far. We invite you to contact us at iplaw@wilhelmlaw.com, or call us at 920-831-0100 to speak with one of our attorneys. We will discuss your need for legal representation - and our suitability to represent you.Return to the News/Views page
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