Registering Product/business idea?
Discussion
Hi
My father & I have come up with a unique product we would like to either build & sell ourselves or sell the idea to a company who would then build & sell it - (either buy idea off us or share of profits -is this viable?)
What would be the next step in approaching people to build a prototype or registeringthe idea so that they dont take our idea and not give us a penny?
yours replies will be greatly appreciated
Andy
My father & I have come up with a unique product we would like to either build & sell ourselves or sell the idea to a company who would then build & sell it - (either buy idea off us or share of profits -is this viable?)
What would be the next step in approaching people to build a prototype or registeringthe idea so that they dont take our idea and not give us a penny?
yours replies will be greatly appreciated
Andy
Get the thing patented first and foremost.
Once you've done that there are various options. I recently set up a deal whereby the inventor sold the "rights to manufacture and sell the product" to an appropriate company. We agreed an initial payment (lump sum), got the partner to commit to minimum sales & marketing investment, and then the inventor took a monthly retainer plus 5% royalties on all products sold above a certain number of units (calculated quarterly). The beauty of this deal is that the inventor never lost ownership of the IPR - we simply sold the rights to sell and make it. If the partner doesn't perform, and sales fall, we can find another partner.
Once you've done that there are various options. I recently set up a deal whereby the inventor sold the "rights to manufacture and sell the product" to an appropriate company. We agreed an initial payment (lump sum), got the partner to commit to minimum sales & marketing investment, and then the inventor took a monthly retainer plus 5% royalties on all products sold above a certain number of units (calculated quarterly). The beauty of this deal is that the inventor never lost ownership of the IPR - we simply sold the rights to sell and make it. If the partner doesn't perform, and sales fall, we can find another partner.
srebbe64 is right - get the protection by getting the patent application in and then look for someone who will develop and sell the product on a licence basis.
The advantages of the licencing arrangement start with retaining ownership but also allow geographic distinction - one partner in Europe, another in North America etc
If someone wants to buy outright then there is a risk element so they chip the price. Think where Mr Dyson would be now if he had sold the idea for a lump sum.
The catch with licencing is that some large companies don't operate that way and practice varies across industries. You might find your market place just doesn't do it.
It is also more complex to do a licensing deal and that means more set up costs in terms of legal and accounting. The most important element is auditting so that you can be sure you get your piece of the pie. The crucial point is whether you get a share before costs or after - and get a really good lawyer.
The advantages of the licencing arrangement start with retaining ownership but also allow geographic distinction - one partner in Europe, another in North America etc
If someone wants to buy outright then there is a risk element so they chip the price. Think where Mr Dyson would be now if he had sold the idea for a lump sum.
The catch with licencing is that some large companies don't operate that way and practice varies across industries. You might find your market place just doesn't do it.
It is also more complex to do a licensing deal and that means more set up costs in terms of legal and accounting. The most important element is auditting so that you can be sure you get your piece of the pie. The crucial point is whether you get a share before costs or after - and get a really good lawyer.
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