So, you have an invention that has been patented, but you don’t know what you should do next? What are your options for making money? This article will provide information on how you can get your idea to market with manufacturing, as well as IP licensing.
The first step is to study your invention in depth, and familiarize yourself with the areas it might have applications in. Research on market research is crucial!
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Google is an excellent resource to do this. You can look up the most successful companies and emerging players in your target market and evaluate all of their offerings and services. Business magazines, blogs as well as online business magazines are all excellent sources of information. Additionally, you should be aware of the technologies that are trending and are likely to be a hit for your target markets in the near future. There may be products that infringe your technology and can bring an IP infringement lawsuit against the maker. Your technology may be used to enhance the performance of a product that is already in use. This could result in IP licensing opportunities.
It is essential to think from the customer’s point of view if you want to succeed. Pay attention to the opinions of customers on social mediaplatforms, corporate websites, ecommerce websites blogs, and other platforms online. Help customers discover solutions to their concerns with current products by analysing the feedback of customers. You can build your brand and build your own fan base through doing this. You can also inform your customers about upcoming product launches and business plans.
Let’s take an instance. A company is selling an electronic device, which is experiencing an early heat-up issue. Fortunately, you developed a special chip, which can solve this problem. What you have to do is search for reviews on the internet of customers who have written about the issue, and then inform them that you’ve come up with a solution for this. You can establish trust with a group of customers, thus, it will become easy for you to market your product.
Market research is just half the fight. The next step is to research market analysis reports as well as an individual developing an IP monetization strategy for your invention. There can be two options:
Patent licensing is similar to renting a home to a tenant. You retain the ownership of your IP rights, and at the same time permit someone to make and sell products for a certain time. A licensing agreement can be made between businesses or individuals. The IP owner is called licensor and the licensee is the one who is granted permission to use patented technologies for sale or manufacture and/or use of the same.
As an IP owner, you are entitled to the right set terms and conditions in the license agreement. The terms could comprise a set amount of future sales or a part of the royalty per unit.
However, it’s difficult to tell what is the total amount you can earn as an inventor license your patent to others. The amount depends on valuation of your patent. This is affected by many variables. These include:
- Market size in total and the growth rate
- Amount of customers who are not in the patent’s life
- Purchases made by customers
- Costs and taxes related to product development
- The manufacturer earns an annual profit
There are two types of IP licensing that are exclusive and non-exclusive. In exclusive licensing, one licensee got exclusive rights to develop and sell an invention (usually exclusive license agreements is done by start-ups which help them to grow in the marketplace). However, non-exclusive licensing allows multiple licensees to utilize the patent-pending technologies simultaneously, thus utilizing the IP to its full potential.
Producing on your own
The royalties an inventor gets through IP licensing are usually between 2% and 10% of total revenues. If you think “why do I have to take a small slice from the pie, when I deserves the whole part” You should opt to manufacturing and selling your products for yourself.
According to a research conducted by Ed Zimmer and Ron Westrum More than half of the inventors who decided to produce and sell their own claims to be successful.
You need to be knowledgeable about the business world to become an effective businessperson. Furthermore, you need to have these traits of a person:
- Salesperson:All entrepreneurs have one common aim i.e. to sell their product to the greatest number of customers. Thus, you should have characteristics of a salesperson informing people about your product and convincing them to be included into your list of paying customers, too.
- Risk it:You may have to get out of the crease to score six points with the last ball. This is how you take the lead in the game. There’s always the chance of being unable to finish the game but that’s not an option. It is also important to be open to taking risks in order to grow your business. Even if you are struggling with financial or other difficulties, there are fair chances of returning for a second round.
- InnovatorInnovation is an essential instrument for growth of businesses. You should be an expert in this field. By providing people with new and innovative products and upgrading services and products with most recent technologies helps in attracting new customers as well as keeping the existing customers.
- Manager:You should possess managerial skills and know how to manage a team. It is important to grasp the reality that employees are the most important elements of a business; and they can aid in increasing sales in the event that they are focused and motivated.
There are two methods to put an invention on the market either through manufacturing or licensing. It is, however, difficult to decide which is the better option. Each has its own advantages and disadvantages. It’s your decision to choose which is best for your needs.
Thus, your goal should be very clear. You can set up your own company, or allow someone else to utilize your IP rights.
But, the return on investment is higher when you opt for manufacturing, but you’ll need a lot of money to start a business. If you don’t have enough funds, IP licensing is the right way for you to take.
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 firms because they provide extensive market information, including market trends, competitor analysis and customer need analysis. Clients can gain a better understanding of their clients’ requirements and markets of choice, and can therefore develop distinctive strategies for IP.