C3 Patent and Intellectual Property Law

Sep062010 | Steve O'Donnell

Turning an invention into money

Although there are some people that want patents just to fill up their résumé, most want their invention to become a money making machine, many inventions don’t. How does someone turn an invention into money?

First things first, if you don’t have some sort of protection for your invention or you’re just asking to be ripped off. Patents would be the most obvious route to protect an invention, but copyright, trademark, and trade secrets might also be relevant. This is the time to contact an intellectual property attorney and get an opinion on structuring a protection scheme.

When people call me, one of the first things I ask is what they’re going to do with a patent. Patent’s aren’t cheap or easy to get, and before someone starts throwing money at me I want to have at least some indication that they’re planning ahead and have a shot at recouping their investment. I lose more clients that way than I can care to think about.

First, many people seem to think that once they have a patent that companies will find it and search them out with a briefcase full of cash. I guess that could happen, but it sure doesn’t happen often.

There are basically three or four ways of turning an invention into money. Each has their strengths and weaknesses and which is the best will depend on the specific facts of the invention and the inventor: do it all yourself, license or sell the invention, or troll.

Most first time inventors want to do it all themselves. In other words, they want to start cranking out their widget in their basement, or pay a manufacturer to make it for them, and promote/sell it themselves. There are huge benefits to that. Obviously, all the profit goes to the inventor. However, if the inventor does not have the background or bankroll to commercialize a new product, the chances of success aren’t the best.

Another route is to either assign or license the inventor to an established company. The advantage are that the other company already has the infrastructure to commercialize the invention; on the downside, the inventor will likely only get a small fraction of profits.

If those fail to excite you, trolling has become popular. In a nutshell, what you do is get a patent and sit on it while waiting for someone to infringe it. If that happens, you wait until their product has taken off and then you sue them. It’s not a particularly popular option, and there are grumblings about how Congress might make that a less attractive option economically, but it is still an option.

What makes the most sense for a particular invention and a particular inventor is going to depend on a lot of factors, and it’s never too early in the process to think about these issues.

Call or email me for an individualized analysis of your intellectual property and your options.