Business Wire:
1. Incomplete Research. Patent holders often believe that asking a few of their friends and family members what they think of their inventions is sufficient research. While this may be a convenient start, it is simply not enough. Good market research for patent holders includes an assessment of the market size, examination of industry trends, analysis of the competition, feedback from the channel, and identification of the target market (potential licensees). Feedback from the channel (frequently retail) is often overlooked by inventors. Although retailers rarely license product patents, their endorsement makes it much easier to license them to manufacturers.
2. Misunderstanding the Patent Process. Inexperienced inventors often think that getting a patent automatically makes the money start rolling in. A patent is only a legal right to prevent or exclude others from making, using, selling, offering to sell or importing the claimed invention. A product must be licensed, manufactured, made available to the public and purchased by the consumer before you see any money. And the steps involved are complicated.
3. Lack of Prototype. It’s very difficult to sell something you can’t see or touch. Many inventors think their rough sketches or handmade product models are enough to sell their product to a potential licensee or manufacturer. Many inventors, however, are not designers or engineers. Licensers and manufacturers are much more likely to act on product ideas they can see, handle and understand, and that actually “work.” They also are much more likely to respond to something that is well designed and that will attract the consumer’s eye. That’s why it is very important to show a prototype that is easy to use, practical and good looking.
4. Lack of Good Marketing Material. Inventors only get one chance to make a first impression. Unfortunately, it is very difficult to change someone’s mind if that impression is negative. Oftentimes, patent holders go the cheap route, spending next to nothing on marketing material. If the marketing material is unprofessional, it is unlikely that the invention will ever get licensed – no matter how revolutionary it may be.
5. Skipping the Tradeshows. Tradeshows are hard work and can be tedious, not to mention very expensive to attend. However, they are 100% necessary in getting a product the proper exposure; it’s possible to meet all the key people in a product category in a matter of days. It’s important to hit every tradeshow in an invention’s product category and hold meetings with manufacturers at the show. It’s also very helpful to have a booth, where a product can be presented to buyers who walk the tradeshow floor.
6. Fear of the Phone. When trying to secure a licensing or manufacturing deal, it’s important to not leave any stone unturned. Telemarketing can certainly be uncomfortable. However, an aggressive phone campaign is an essential part of getting a product in front of the right audience. Persistence, a great script and a good phone personality are all essential.
7. Inadequate Relationships. Building trust with manufacturers takes time, and there really is no shortcut. Unfortunately, inventors often have a transaction mentality; manufacturers can sense that and are quickly turned off by it. On the other hand, inventors are often not given sufficient time and attention to build a proper relationship. To engage the manufacturer frequently enough, but not too frequently, requires a keen sense of timing. Manufacturers expect to meet with inventors to develop a relationship that will make them feel comfortable about investing in a licensing arrangement.
8. Poor Negotiation. Negotiations begin when a manufacturer is interested in licensing a patent. The majority of inventors think they are good at negotiating. But the sad truth is, most are not. Good negotiation requires properly structuring the deal, knowing what to ask for, knowing when to give in, and maintaining the proper pace. If negotiations are not handled properly, inventors can lose millions and millions of dollars. Although you can learn negotiating skills from a book, these techniques often take years of practice to master.
9. Taking a DIY Approach. Many inventors initially try to do everything themselves. But obviously, taking a product to market is not a do-it-yourself project. Taking on the job of a licensing manager, salesperson, engineer, marketer and designer is too much for one person. It’s much more effective to have a team of professionals working for you.
10. Quitting Prematurely. Getting a product licensed usually requires speaking with a large number of companies, even if the market research is of high quality. Most companies will reject the product, and the majority of inventors will get discouraged and give up. Sometimes, a patent can be pitched to more than 100 companies before it gets licensed. Persistence and determination are critical.
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