Author Topic: Any mustachian inventors?  (Read 3559 times)

EconDiva

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Any mustachian inventors?
« on: April 22, 2014, 07:14:23 AM »
Any mustachian patent holders or rights to a product they license for royalties?

huadpe

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Re: Any mustachian inventors?
« Reply #1 on: April 22, 2014, 07:29:16 AM »
Not myself, but I work at a patent law firm targeted to small inventors.  If you are considering applying for a patent on something, keep in mind this is a very risky and expensive venture.  You need to know the market you're entering well and have a clear reason why your invention is better than what exists and how you can sell it to the public.

EconDiva

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Re: Any mustachian inventors?
« Reply #2 on: April 22, 2014, 08:40:54 AM »
Not myself, but I work at a patent law firm targeted to small inventors.  If you are considering applying for a patent on something, keep in mind this is a very risky and expensive venture.  You need to know the market you're entering well and have a clear reason why your invention is better than what exists and how you can sell it to the public.

Because of the risk, time and capital involved I'm not interested in patenting/producing anything on my own, but rather just licensing an idea.  I was thinking of filing a PPA, then creating a sell sheet, and if manufacturers are interested, I'd accept licensing the idea provided the contract accounts for the manufacturer paying for the patent in my name.

I have like a dozen ideas at any given point in time, so I figured why not just start with 1 or 2 and see if there's any interest, and if not, move on to the others.  I hope this makes sense.  Sound feasible at all....?  Or am I too much of a dreamer lol?

arebelspy

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Re: Any mustachian inventors?
« Reply #3 on: April 22, 2014, 09:02:39 AM »
I own some patents, and have a few more going through the process.  No royalties as of yet.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
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EconDiva

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Re: Any mustachian inventors?
« Reply #4 on: April 22, 2014, 09:08:23 AM »
I own some patents, and have a few more going through the process.  No royalties as of yet.

How long before you think the royalties start coming in?  Do you plan on producing and selling the product(s) yourself?

arebelspy

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Re: Any mustachian inventors?
« Reply #5 on: April 22, 2014, 09:43:44 AM »
I own some patents, and have a few more going through the process.  No royalties as of yet.

How long before you think the royalties start coming in?  Do you plan on producing and selling the product(s) yourself?

Difficult to say.  Could be a few months, could be a few years, or never.

Yes, we are actively marketing and promoting.

Earlier (brief) discussion on patents here: http://forum.mrmoneymustache.com/ask-a-mustachian/patenting-an-invention/
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Tyler

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Re: Any mustachian inventors?
« Reply #6 on: April 22, 2014, 02:27:14 PM »
Because of the risk, time and capital involved I'm not interested in patenting/producing anything on my own, but rather just licensing an idea.  I was thinking of filing a PPA, then creating a sell sheet, and if manufacturers are interested, I'd accept licensing the idea provided the contract accounts for the manufacturer paying for the patent in my name.

I have like a dozen ideas at any given point in time, so I figured why not just start with 1 or 2 and see if there's any interest, and if not, move on to the others.  I hope this makes sense.  Sound feasible at all....?  Or am I too much of a dreamer lol?

I hate credential listing, but I feel it's important for the conversation.  So allow me a few sentences.  I work in product development, and have both worked for name-brand product companies you've heard of and also led a team that designed new products directly for a retailer in-house brand.  I've actually been asked to participate in meetings with buyers and executives listening to pitches from people with patented products, and know how the company discusses them afterwards.  And I have many patents through my employers and understand a bit about when they are valuable and when they are not.  So I have a bit of an "insider" perspective.  And I'm not a lawyer, so please don't consider this legal advice.

Short story -- the likelihood of you licensing nothing more than an idea to another company and making money on it is very close to zero.

First, a patent is only as good as the money you are willing to spend defending it.  If a large company with billions in revenue and huge legal teams infringes on your patent, it is up to you to sue them.  And that takes a lot of time and money.

Second, patents are often not that difficult to design around.  Some companies have engineering teams dedicated solely to copying successful products while designing around limiting patents.  They sometimes then patent the workarounds, which weakens yours even further. 

Third, when dealing with new ideas, product companies naturally prefer to minimize risk.  If it's your idea, even if they like it that doesn't mean they're going to spend lots of money developing and selling it only to find out it's a market flop.  Ideas are cheap.  If you show no inclination to bring the product to market yourself using your own money, the likelihood of getting them excited about doing it is very small.  You've already shown you aren't confident it will succeed, and it's your idea!

Fourth, often the companies most likely to be capable of making your product a success will not talk to you for legal reasons.  Large companies are going to get sued by someone no matter what they do.  So most believe they'd be crazy to open themselves to unnecessary liability by letting some inventor in the door who will later claim they stole his idea.  Some even go so far as to not even worry about doing patent searches for their own new ideas, as they let the lawyers sort out any problems that arise and ignorance helps somewhat limit punitive liability.

Fifth, the corollary to #4 is that someone who will talk to you may not be trustworthy.  They either don't do this type of thing often enough to know how it will bite them, or they are actively looking to steal good ideas.  Even with an NDA, see #2.  There are definitely good, ethical companies out there to offset the bad ones, but the trick is knowing who is who ahead of time. 

And finally, beware launching an idea on Kickstarter without being fully committed to bring it to market.  I've seen that ruin the reputations of a few people.



« Last Edit: April 22, 2014, 03:00:21 PM by Tyler »

huadpe

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Re: Any mustachian inventors?
« Reply #7 on: April 22, 2014, 07:49:11 PM »
I second pretty much everything Tyler said above.  The only caveat I'd add is that with #5, the people who will talk to you are usually trying to con you out of your money for low-value high-margin marketing services, and couldn't give a damn about stealing the idea.

As to the legal side.*  Unfortunately a self-prepared provisional application won't do you much good if you're trying to license.  A provisional application doesn't define the scope of the invention specifically enough so that they know what it is they're licensing.  Patent claim drafting is really tough, and if you don't have well drafted (or any) claims, you don't have much leg to stand on as far as the legal value of your protection.  Also, if it hasn't been properly searched, the priority date you're holding with the provisional may be useless and you won't know it.  Last thing is that it takes time to have a non-provisional application (the real one) prepared.  If you push it off til 11 months from filing while you try to license it to get an attorney or agent to do the non-provisional, you're gonna pay though the nose or lose your priority date.

*I am not yet a patent attorney or agent.  This is not legal advice.

Emilyngh

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Re: Any mustachian inventors?
« Reply #8 on: April 22, 2014, 08:57:12 PM »
I have a patent.

Why?

spoonman

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Re: Any mustachian inventors?
« Reply #9 on: April 22, 2014, 09:19:49 PM »
I have one patent right now, and four sitting in the US patent office right now.  I do it mostly for the prestige, but I've also gotten some nice incentive bonuses.  I also do it because my stuff has been put on fielded systems.  I don't think I will ever see royalties, but I think I'll get some more bonuses.