Licensing a Product Without a Patent
Licensing a product without a patent can be done if you know how to do it correctly.3 min read
Licensing a product without a patent can be done if you know how to do it correctly. One approach is to get a provisional patent, where you'll pay a specific fee and complete a form. When you show it to possible buyers, you'll put the words "patent pending" on the item. You won't have to go through a complicated process of getting a patent this way and are still able to protect the invention from potential competitors who might steal your idea.
Another way to sell a product without needing to get a patent is to work with an invention submission company. There are many companies out there that offer help to inventors for a fee. A variety of services are offered, and some help you just get a patent while others will help you with possible sales. You'll want to check that the company has a strong track record before agreeing to sign with them.
You can also submit your idea online, as various websites have programs and contests that let you send in your idea for customers who might need them. If your idea ends up being picked, you'll pay a fee to the customer. While there is a fee, you'll be able to get more creative and profit off it as well.
An additional option is to go to a company to sell your idea to. While you won't be the one making the product, you'll sell the idea that the business will then market efficiently. If you do this method, you'll need to have the business sign a document that states you were the one who gave them the idea or has a provisional patent. This will keep you protected if the company wants to sell the idea later down the road.
Steps to License a Product
There are several steps to take when you want to license a product. First, you'll need a physical product that you can show. While you can get a quality drawing with a confidentiality agreement or NDA, a real item is preferred since it's more impressive and will help your sales. Second, get your product protected with a patent pending. You can still have a company interested in your product without one, but you'll decrease your position's value significantly. Having a strong position is preferred over having a weak position.
Third, once your product or idea is evaluated, you'll want an executive summary for your presentation. This should be high-quality so it's convincing.
What Are the Typical Categories That Should Be Included in an Executive Summary?
There are 10 normal categories that should be covered. There should be solid research that's done on them and a summary should include the following:
Show what the competitive advantage is of the product compared to current ones on the market.
- What the price is compared to the competition.
- How it will take the market share from competitors.
- If it will be less expensive to ship than competitors' products.
- What is the size compared to the competition?
- Will there be a higher profit margin for the retailer and buyer?
- What's the predicted volume of sales each year?
- What's the ease of manufacturing and how much will it cost?
- Is the quality higher or the same?
- What's the shipping information and lead times?
Advantages of Licensing Ideas
Licensing ideas you have is a good way to work with other businesses, create relationships, and make a profit all at once. Entrepreneurs often build their wealth and success on their ability to find employees who have unique ideas that stand out. However, many leaders and innovators don't know what to do once they have an idea. Companies are starting to understand that great ideas can result from anyone and anywhere. They know that any collaboration benefits outweigh what the potential risks are.
Due to this, they've started looking at ideas that are produced outside their company. Licensing ideas are a good way to improve the company by giving it a secondary stream of revenue. This also creates strong relationships with other players in the industry that are mutually beneficial.