Got an idea that could make you rich?
Have you pitched your idea to large corporations in order to expand your R&D? What precautions have you taken to protect your IP? Talk back here.
From Anika Binnendijk, New York, NY There's actually a pretty cool new organization, The Spirus Group (www.spirusgroup.com) that provides a team of professionals for individuals who want to execute a business idea without leaving their current jobs… it's a good way to take care of some of these IP issues and get ideas jump started.
From Brian Javeline, Pompano Beach, FL My product is MyOnlineToolbox.com, an internet platform for contractors in home repair and remodeling. I have pitched my product to the senior teams of the largest players in our industry with a confidentiality agreement with some of them, and without a confidentiality agreement with others. Our presentation changes based on what the large corporation is willing to agree to, but we never pass on the opportunity to meet. A start-up company should never worry about the larger company stealing the idea. Most of the larger companies (GE excluded) can not go fast enough when it comes to innovation and enthusiasm that a startup can bring. The larger companies can easily partner or buy the idea (and you to join them) if it has a shot since time is their enemy, not the money. The key thing an entreprenuer should remember is to never rely on the 800lb guirella in your industry since they can take a lot of time to make decisions. You go in, make your pitch, update them from time-to-time, and move on. They will call you if they are interested, and by then you will have further evolved.
From Gumby I prefer to have a legal attorney that also wants to act as a partner with me on my idea. This will make everything smooth for me. Lawyers are already rich enough to finance production of my idea or find someone to pitch in as well. I think I would get my legal money worth that way. The big reason any idea no matter how good it is never took off is product liability. manufacturers prefer to stick to the old ideas and cutting costs on them…
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30 years I've been an American Inventor, and what I don't know about the process can be written in large type on my thumbnail. What I can say now, is that it's getting worse, not better. The 'Economy of Scale' is working against us.
Patent protection, costly to obtain, is almost useless in practice. Originally, the US government gave Patents in exchange for the knowledge becoming public domain after a period of time during which the government agreed to provide protection for the inventor. That was changed and now, the patent holder must proactively protect their own rights in court, with no assistance from the government. Failure to do so results in forfeiture of rights. Accommodating this requirement is impossible, let alone expensive, when you're faced with thirty foreign infringers, or a firm so large that it can and does support many staff lawyers.
Pitching your idea to large corporations is a mistake on the face of it. You'll never get a thing from an idea. My rule of thumb on what you'll get?
0-1% of profits for 'Idea'
0-2% of profits for 'Blueprint'
1-10% for Patent
10-30% for patented product in market
30-50% for Trade Secret
One of the most important stories in American Invention involves the guy who invented the 'weed-eater', the string cutter in use today everywhere. Before he could even go into production of his patented product, many overseas firms were on the market. (Asian firms in particular maintain entire staffs whose job it is to scrutinize every patent filed for new products to copy) After suing several, in sequence, he went under, and receives NOTHING from the literally millions of units sold each year.
You want to play in this game? Either you have lots of legal beagle chums to cover yer butt, or you are a very charitable person who solely has the good of others in mind. There's only one case that I know of, where you can do very well. I refer to 'Trade Secrets' where no one can reproduce what you have achieved without your assistance. Whereas patenting your idea merely serves to provide the details to competitors, who, in turn, make a lot of lawyers rich, maintaining a trade secret assures you of whatever return the market decides your idea is worth.
Oh, and for those of you that don't know, 'designs' should be copyrighted, not patented, for maximum protection. Thanks largely to the lobbying efforts of a firm I'll refer to as the 'Mouse House', a doodle on a napkin is better protected, with no further effort, than a product on which a patent has been obtained.
Sorry, Muncaster, but you're dreaming. Whereas a Copyright action would be significantly enhanced by such an method, Patents require immediate filing with the USPTO and protection and precedence is established at that time, by that act. Think of it this way. Copyright protects the 'look' or 'content' and Patents protect 'function' or 'method'. They are extremely different processes providing totally different 'protections'. (It's difficult and expensive to get a patent. It's very easy and nearly free to get Copyright.)
Frankly, FSB would do well to include an annual summary/checklist/flowchart of what to do if you have an 'idea'. (With an awful lot of paths leading to "forget it!")
Please note: There are many 'risks' involved in taking your idea to large corporation. WAY too many to list here, and I've been through most of them. A short version would highlight 'Fine Print' in the contracts (assuming you get that far), outright theft (can you afford to meet them in court?), passovers (a prospect hands your idea to a different company or friends), variants and fractionals, reverse engineering, foreign implementations, submarining (if you don't know what that is, you don't know enough to play), and all the various forms of 'shelving'.
Lastly, for a short missive intended to convey so much in such a tiny space, a dire warning for the many of you who don't this either: Making your product is gonna cost maybe 1% of 'selling' your product, so go back to your spreadsheets and make the necessary changes. Don't forget to put more than you can generate in profits under 'Legal Protection' and several times that under 'marketing'.