Many inventors have a technical background in engineering, the sciences or IT. Their experience in marketing, sales, and general management are usually limited. And engaging in these functions takes the inventor away from what is usually his or her highest and best use: developing the next generation IP.
Without a prior successful startup on their CV, inventors find it difficult to raise capital from angel investors and venture capital firms. Investors are looking for entrepreneurs which can execute. In the words of one angel, there are many good ideas, but few who can execute on them.
Even if you do raise capital, stronger competitors are in a position to infringe on your IP without consequences due to your limited financial strength. Patent litigation averages about $7million. And about half the time, you’ll lose.
Licensing avoids the operating risk, financial risk and the time delays of converting your IP to cash. You are left to dedicate your time to your next invention, and leave the other aspects to us and your licensees.
• evaluate your IP ⇒ Legal: • ensure that no other IP is infringed on in the sale of the product. • ensure all regulatory, safety and other areas are addressed. ⇒ Technical: ensure that the product is feasible to produce • conduct strategic marketing ⇒ segment the market and identify the target markets ⇒ establish that demand exists for your product, and estimate price and quantity ⇒ benchmark your product against existing competitors’ products ⇒ estimate manufacturing cost and per unit profitability • identify likely licensees of your IP • market the IP to potential licensees • benchmark your IP against existing licenses for comparable products to establish a license fee range • negotiate license agreements. • monitor the licensee’s sales to ensure that you are receiving fees for all units agreed to.
– Licensing permits an IP owner to sell his property over time and share in the profits, while avoiding the time delay of raising capital and incurring, the operating risk, financial risk, and litigation risk.
– Your license can be exclusive or limited by industry, application, time, units, or virtually any conceivable parameter. You can also require minimum quality specifications and impose other limitations.