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Helping Hand

Selling Your Inventions
Got a great idea you’d like to pitch to a manufacturer? Here’s what you should know.

by Geoffrey Parnass

Many people in the window coverings industry, at one time or another, develop an idea for a new or improved product. They then wonder how to go about developing the product and seeing if others are interested in manufacturing it.

At one major U.S. window coverings manufacturer, where I served as vice president and general counsel for seven years, we often received ideas for new products from independent inventors. One of my duties was to oversee the process by which these inventions were reviewed. In this capacity I was able to see what worked, and what didn’t work as inventors tried to get a large company interested in their inventions. In this article I would like to share some observations that may help inventors improve their chances of acceptance with any large manufacturer.

CATCH THEIR ATTENTION

First of all, an inventor must have a prototype of the invention that clearly demonstrates the key features of the product. Drawings are useful, but are not as convincing as a real example of the product. The prototype should be durable and able to withstand a fair amount of handling while it is inspected.

Second, be sure to research the novelty of the product. Inventors will only waste their time if they propose something that has already been invented by someone else.

Third, look at the invention critically from the manufacturer’s standpoint. Is the invention a new product or a new extension of an existing line? Or is the invention just a minor improvement to an existing product? Most manufacturers have in-house staffs that develop improvements to existing products. To catch a manufacturer’s attention, the invention usually has to be a new product or a new extension of an existing product line.

Fourth, and again looking at the matter from the manufacturer’s point of view, how profitable will the product be? This is often a function of volume, or the number of units that potentially can be sold. Remember, a company is more likely to be interested in devoting time and resources to a product that has the potential for substantial volume and profits.

Finally, an inventor should take steps to protect the intellectual property associated with the invention before showing it to the manufacturer. Sometimes a manufacturer will sign a confidentiality agreement or agree not to use an invention that is privately disclosed to it and, of course, proper business ethics would support this. But increasingly, companies are putting the burden of protecting intellectual property on the inventor. As a practical matter, this means the inventor must file a patent application covering the invention before showing it to any manufacturer.

BE PROTECTED

Most companies will not be interested in an invention at all unless it is can be patented. Patent protection is the best way to ensure that someone else doesn’t copy the product after it is launched. Patent protection also puts the inventor in the strongest position to demand a high royalty from the manufacturer.

A patent is much like an agreement between an inventor and the United States government. The government gives the inventor exclusive ownership of the invention for a period of time in exchange for disclosing the invention to the public. When the patent expires, the invention is freely available for use by the public. The inventor benefits by having the exclusive right to use the invention for a period of time and the American people benefit by the disclosure and ultimate ownership of the invention.

A utility patent protects the useful or functional aspects of an innovation. The legal rights awarded to an inventor are spelled out in a formal document issued by the United States Patent and Trademark Office. In addition to sections describing the invention and the way it has solved problems hitherto unsolved, the patent document spells out the exact protection of the invention in the same way that a deed describes the metes and bounds of a piece of land.

A patent is only awarded to inventions that are novel and not obvious to one skilled in the art. An invention is not novel if it is already known, or the invention was already patented or appeared in a printed publication before the date of invention. The rules on novelty are quite technical and it is very important to conduct a thorough search of the prior art before filing an application.

An invention must not be “obvious” to someone skilled in the relevant technical field in view of current knowledge in the field. An invention may be novel, but if it is an obvious variation of known technology, it will not receive a patent. To make this assessment, the patent office or the court (if the patent is challenged) must image a hypothetical person skilled in the relevant art, and ask whether the invention would have been obvious to that person. This assessment is very fact intensive and open to dispute, and the requirement is responsible for a good deal of litigation.

Finally, a patent must disclose in clear and complete terms how one with ordinary skill in the technology field would make and use the invention. This is part of the bargain with the federal government. If the disclosure is incomplete or too obscure, the patent will be denied or invalidated by a court.

PATENT RIGHTS

The owner of a patent has the right to exclude others from making, using or selling the invention. There is no requirement that the patent owner actually use the invention in order to exclude others. As with a piece of land, the owner can elect to let it sit fallow and still keep others from trespassing. But unlike land, the patent gives the owner the right to keep others from producing products that are “equivalent” to the invention. This keeps others from making a trivial change to an invention just to avoid infringement. A product is considered equivalent if it performs substantially the same function, in substantially the same way, to achieve substantially the same result as the invention.

Patents issued today are granted a 20-year period of protection from the date the application is filed with the federal government. The owner must pay maintenance fees to keep the patent in force. If someone infringes a patent, the owner can sue in federal court and obtain an injunction, monetary damages and an award of attorneys’ fees.

It is not necessary that the patent be issued before disclosing an invention to a manufacturer. All that is necessary is that the patent application be filed with the Patent and Trademark Office. Once the patent is granted, protection will extend back to the date the application was filed. The same point should be made about showing an invention at a trade show. It is always best to file the patent application before the show.

A final observation about selling inventions to large companies: try to get a strong inside sponsor for the invention. Big companies are nothing more than collections of strong-willed people, each with his or her own agenda. The chances of convincing a company to license a new invention will substantially improve if it is co-sponsored by an influential executive.