It is hard to make money with an invention without having exclusive rights since you don’t have legal recourse to stop other people from selling and making the same product. Of course, you can still make money from your invention but not exclusive rights. As a patent attorney with a Columbia Business School MBA, I was fortunate enough to join a startup that went public. Since then, I have helped many clients with monetization strategies and can help startups identify potential revenue streams and maximize the value of their intellectual property (IP) assets.
If you protect your IP, there are many ways to make income. Furthermore, you can also stop third parties from selling and making your product or their product bearing your name or your brand. To make more money with an invention, you will need to use IP rights.
Recent research shows that companies who secure their IP rights generate more revenue. Of course,the fact that you have an exclusive right does not guarantee any profits. You have many other factors to consider when protecting your intellectual property. No one will pay you money simply because you have filed a patent application. Income can only be generated if the product or method is really good and valuable.
Table of content
How to make money with your invention
Steps to Making Your Invention Idea Into a Product
How to make money with your invention
There are three basic ways to make money with your invention. You can either sell your patent rights. Your invention can be licensed. You can produce, market, and sell your invention yourself.
Selling the IP Asset
This involves selling your intellectual Property (patent, copyright, or trademark) and permanently transferring ownership to another person or company for an agreed-upon amount. By doing so, you will lose all future commercial opportunities, including royalties.
License your invention
Licensing is a way to retain your original invention but to rent the rights to use, make, or sell it. One party can be granted an exclusive license or a non-exclusive license to more than one party. The license can be given for a set period of time. In exchange for the rights, you can either charge a flat fee or collect a royalty fee per unit, or you can combine both.
Not to be overlooked, royalties make up a smaller percentage than most inventors think they should. For first-time inventors, it is often less than three percent. This should not surprise you as the licensing party is taking financial risks, and it can be quite an undertaking to market, distribute, advertise, and manufacture any product.
Make and Sell the inventive Products or Services
This path will provide you with the greatest returns, but it is not easy to manufacture, market, promote, and distribute your intellectual property. Entrepreneurs will need to raise capital for serious businesses. Commercializing patented products or services involves bringing them to market and making them available to customers. This process typically involves several steps:
- Develop a business plan: Develop a detailed plan that outlines the market opportunity, target customers, marketing and sales strategies, and financial projections for the product or service.
- Obtain funding: Secure the necessary funding to develop and bring the product or service to market. This can include seeking investment from venture capitalists, angel investors, or crowdfunding.
- Build a team: Assemble a team of experts with the necessary skills and experience to develop and commercialize the product or service. This can include engineers, product managers, marketers, and salespeople.
- Develop and test the product or service: Use the funding and team to develop and test the product or service. This can include conducting market research, creating prototypes, and testing the product or service with potential customers.
- Launch the product or service: Once the product or service is developed and tested, launch it to the market. This can include creating a website, developing marketing materials, and building relationships with potential customers and partners.
- Monitor the market: Continuously monitor the market to identify any new opportunities or challenges. Make adjustments to the product or service as needed.
- Protect and enforce IP rights: Protect and enforce the IP rights for the patented products or services, such as patents, trademarks, and copyrights.
It’s important to note that commercializing a patented product or service can be a complex and time-consuming process that may require specialized knowledge and experience in areas such as product development, marketing, and IP law. Therefore, it’s advisable to seek the help of experts in these areas to guide you through the process.
patent attorney who understand monetization strategies
Most lawyers are not business people, so if you want to make money from your inventions, you need to find the business savvy patent attorneys.
Patent attorneys who understand monetization strategies can provide significant advantages for digital health startups. They can help startups identify potential revenue streams and maximize the value of their intellectual property (IP) assets. Some of the advantages of having patent attorneys who understand monetization strategies include:
- Identifying revenue streams: Patent attorneys who understand monetization strategies can help digital health startups identify potential revenue streams for their products, such as licensing, sales, and royalties. They can also help them evaluate the potential revenue from each revenue stream and choose the most profitable options.
- Maximizing IP value: Patent attorneys who understand monetization strategies can help digital health startups develop a comprehensive IP strategy that maximizes the value of their IP assets. This can include identifying and protecting key IP assets, such as patents, trademarks, and trade secrets, and developing a strategy to monetize them.
- Licensing and partnering: Patent attorneys who understand monetization strategies can help digital health startups identify potential partners and licensees and negotiate licensing agreements that are favorable to the startup.
- Patent assertion: Patent attorneys who understand monetization strategies can help digital health startups assert their patents to generate revenue through licensing or litigation.
- Enforcing IP rights: Patent attorneys who understand monetization strategies can help digital health startups enforce their IP rights against infringers, which can generate revenue through settlements, license agreements, and court judgments.
In summary, having patent attorneys who understand monetization strategies can provide digital health startups with a significant advantage in terms of identifying revenue streams, maximizing IP value, licensing and partnering, patent assertion, and enforcing IP rights. This can help them to generate revenue and maximize the value of their IP assets.
Steps to Turn Your Inventive Idea Into a Product
You have an idea. Before you tell everyone about it, make sure you protect your idea. You can market the invention by yourself or license it to another company. The best way to make money and ensure that no one steals your idea is to file an application for a patent or design. Here are steps to follow to make your idea a product:
Step 1: Document it
Having an idea is simply not enough. You need proof that you actually came up with the invention ideas. You should write down all information that you can find about your invention. This includes how it works and what you will do to market it. This is the first step in patenting and protecting your idea. You should consider free tools to prepare and file provisional patent applications such as at www.inventiv.org or if you prefer lawyers to do the work, you can contact us.
The “poor man’s patent” is something you may have heard of. This involves writing down your idea and sending it to yourself in sealed envelopes so that you have proof of the invention’s conception. This is not reliable and will likely not hold up in court and you should file a provisional application instead.
While the advent of the AIA has made the inventor’s notebook outdated, you may still want to write down your ideas in an inventor’s notebook for brainstorming purposes and for documentation. This journal will serve as your guide throughout the invention process. You can also collect your notes into logical batches and submit them as a series of provisional patent applications.
STEP 2: Do Your Market Research
Throughout the product’s life cycle. Your idea will need to be viewed from both a legal and business perspective. You are better prepared than you think!
When it comes to finding out if your idea is already being used, you can’t do enough research. You don’t want to spend money protecting an invention that has already been filed for patent or similar products. An initial patentability search is crucial.
It is important to also research the market in which your product will be sold. It doesn’t matter if you think the market is ready for your invention. Only a small number of patent inventions have ever been commercially successful. The potential of any product will be determined by proper research and planning.
Before you spend time and money on patenting your invention, it is important to do the necessary research to find out if it will succeed. You can use surveys, and Google trend search to identify your competitors and their products.
Once you are certain that there is a market, it is time to start manufacturing the product. In order to maintain a competitive retail price, it is important that you ensure the product can be manufactured at a reasonable cost.
STEP 3: Make a prototype
Next, create a prototype. What is a prototype? A prototype is a simplified model of your invention that shows its features. This is used to show the design of your invention to potential licensees or investors.
We don’t recommend that you file a patent before making a prototype. Before you actually build your invention, you will never know how it will work. A prototype can help you identify flaws and identify missing features. If you want to patent your idea before verifying these features, it may be too late.
STEP 4: patent the design
The third step is to file a Utility Patent or Design Patent in order to protect your product. Patents will protect the item’s functionality or the process or product from which it was developed. The design will only protect the visual features of the product.
You can draft and file your patent or design application by yourself. The filed documents are legal documents, and we recommend hiring a patent attorney if you want to get it right the first time.
If an invention is extremely valuable, someone will attempt to infringe it. If your patent application was not professionally prepared, a competitor might be able to find loopholes in it and exploit them. It is advisable to seek legal aid as soon as possible to avoid future headaches.
STEP 5: Market your inventive products or services
Finally, it’s time to bring your product to market.
A Business Plan is a must-have. This will include details about how you will make money, manufacturing details, how it will sell, and more.
You will have to decide whether to manufacture the product and then sell it yourself or license it to another company. You will need to negotiate license agreements and royalty fees if you decide to license the product. It can be daunting and professional help is recommended. It is easier to have your product manufactured and sold by someone else than it is to set up and run a business. You could make more money or have a steady income stream.
Packaging and branding are also important. You can get noticed with a catchy brand name and attractive packaging. Trademarks are a way to protect your brand and logo. Trade marks can add value to your business. They are tangible assets that can be sold, licensed, or assigned to others.
It is important to remember that although creating a product from scratch can be a tedious process, the rewards will be worth it tto bring your vision into reality. The process will be hugely rewarding from a personal development perspective. So, while there is no guarantee that you will get rich from your ideas, you should go out and give it your best.
We end with a quote from Edison: “One might think that the money value of an invention constitutes its reward to the man who loves his work. But speaking for myself, I can honestly say this is not so…I continue to find my greatest pleasure, and so my reward, in the work that precedes what the world calls success.”
Now go find your success!