You’ve invented something patentable but you’re not sure of what you should do with it. What are your options for making money? This article will provide information on how you can make your invention marketable, including manufacturing and IP licensing.
The first step is to examine your invention in depth, and familiarize yourself with the areas it might use in. Market research is vital!
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Google is a great source to do this. Look up the top companies and emerging players operating in the market of your invention, and study the products and services they offer. Blogs, online business magazines as well as online business magazines are all excellent sources of information. Also, make sure you are aware of the latest technologies and will be hitting your markets of choice in the near future. This is because you discover a product that violates your invention, and you could file an IP infringement lawsuit against the maker. Your technology could be utilized to enhance the performance of a product that is already in use. This could lead to IP licensing opportunities.
It is essential to consider the customer’s viewpoint in order to be successful. Read customers’ feedbacks on social media, online shopping sites as well as the official websites of companies, and online blogs. Find out what issues customers face with current products and help to find solutions. This way you will be able to create your own brand and create your own fan following. Here, you can also inform your customers about upcoming products and business plans.
Let’s take an illustration. A device that is electronic is sold by a business. It has an early issue with heat-up. Fortunately, you developed a special chip, which will solve the issue. The only thing you need to do is to search for reviews on the internet that customers have posted regarding the problem and tell them that you’ve invented a solution for this. It is possible to build trust with an audience of customers and it will become easy for you to promote your products.
If you do market research comprehensively you will win half the game. The next step is studying market analysis reports and an individual developing an IP monetization strategy for your invention. Two options are offered:
Patent licensing is just as renting a house to a tenant. You retain ownership of your IP rights, but allow others to make and sell your products for a specific time. The licensing agreement could be made between individuals or companies. The IP owner is called the licensor while the licensee is the one who is granted permission to use patent-protected technologies to sell manufacturing, distributing, or using them.
As an IP holder, you have the right set conditions and terms in the licensing agreement. The agreement could include an amount fixed for future sales or a percentage of the royalties per unit.
It is difficult to know the amount you could make as an inventor through licensing your patent to other people. It’s based on the valuation of patents that is affected by several variables. This includes:
- The market’s size in its entirety and its growth rate
- Number of customers that have a patent expire
- Customers make purchases
- Costs and taxes related to product development
- Profits per year for the manufacturer
There are two types of IP licensing two types of IP licensing: exclusive and non-exclusive. In the case of exclusive licensing, one licensee is granted exclusive rights to develop and market the invention (usually, exclusive license agreement are done with start-ups, helping them grow in the marketplace). Non-exclusive licensing on the other hand, allows multiple licensees to access the patent-pending technology at the same at the same time. This allows IP to be used to its maximum potential.
Producing on your own
The royalties that an inventor receives through IP licensing are usually between 2and 10 percent of the total revenue. Consider making your own products, and then selling them.
According to a research conducted by Ed Zimmer and Ron Westrum more than half the inventors who decided to manufacture and market on their own claim to have been successful.
You should be proficient in the world of business to be a successful businessperson. Personality traits are also essential.
- Salesperson:All entrepreneurs have one common goal i.e. To sell their products to the maximum amount of customers. Thus, you should have characteristics of a salesperson telling people about your products and convincing them to be included in the list of your paying customers as well.
- Risk taker:Sometimes, you have to get out of the crease to make six on the final ball to win the game. However, there’s the possibility of a run-out however, you have no other options. Also, you must be willing to taking risks in order to expand your business. While you may be facing bankruptcy or other financial difficulties, there are fair chances that you will return to the table for another chance.
- InnovatorInnovation is a crucial tool for business growth. You must be an expert in this field. Offering people something fresh and enhancing products and services with the latest technologies help attracting new customers and keeping existing ones.
- Manager: You should have managerial skills and be able to lead an entire team. It is essential to comprehend the fact that employees are core elements of a business; and they will aid in increasing sales in the event that they are focused and inspired.
Patent licensing and manufacturing are two choices to introduce an invention into the marketplace. It is hard to decide which one is more suitable. Both have advantages and disadvantages, and it is your choice to decide depending on your individual preferences.
The goal you are aiming for must be crystal clear. If you are looking to start your own business , or receive royalties by allowing someone make use of your IP rights.
However, the ROI is higher when you opt for manufacturing, but you’ll need a lot of money to set up a company. If you don’t have enough money to start a business, IP licensing is the best way to go.
Manufacturing or licensing, what do you think is best option for IP commercialization?
Scintillation Research and Analytics is a leading IP services firm based in Mohali, PB, and it specializes in intellectual property search, IP licensing, prosecution, and market research.
Scintillation’s patent reports are different from other IP companies because they include detailed market information such as trends in the market as well as competitor analysis and need analysis. Thus, clients can have greater understanding of their target markets and their customer’s needs and, as a result, develop exclusive IP strategies.