While I agree that learning to search and building your own version of a prototype, if you can, is a good exercise for every inventor, I believe that you will reach a point when you do need a professional to take another look. Why?

1. Most inventors see their inventions too narrowly.
2. There is a time value for your time. It takes days to do a good search. Most inventors have a day job. For the dollars spent on the search, your time is more valuable.
3. All of the business decisions you will make are based on what comes back in the search report. Because of that, you need a good professional search.
4. A good search includes a USPTO search, international search, and a product search. A good USPTO search is done by classification not by keywords. Most inventors only do a keyword search.
5. If paying $500 for a search makes you “cranky”, you probably don’t have the resources to be a successful inventor.
6. You have to have the international search done as part of a comprehensive search because if your invention has been done anywhere in the world at any time in history, you will not be granted a U.S. patent. It doesn’t matter if you are planning to sell internationally or not.

Do as much as you can yourself. But when you eventually get sick of searching (as you undoubtedly will), it’s time to have a professional take another look.

1.  Just like there are good car mechanics and bad mechanics, there are good attorneys and bad attorneys.  Check around when you are considering hiring one; don’t just go to the first one who pops up online.

2.  Remember that attorneys specialize in specific practices.   You don’t ask an OB/GYN to do brain surgery so don’t ask a transactional attorney to do your patent.

3.  Once you decide who to use, remember that your attorney is “work for hire” not your business partner.  YOU negotiate the “guts” of the deal NOT your attorney.   Your attorney gets it down on paper.

4.  A “good” deal is one that is balanced.   I recently had a client use an attorney I had encountered with another client.  The attorney told the client that she was very conservative in her suggestions when negotiating an agreement.  This is not unusual.  Attorneys generally start with an agreement heavily tipped to the client’s favor.  However, the other side is also starting with an agreement tipped heavily in their favor.  Translated—that means billable time to you.  By the time the other party pushes back and you finally get to a “balanced agreement”, you have hours of additional billable time.  Your attorney makes his/her money on you whether you succeed or not.  Consequently, YOU have to see the balance if you want a deal.  It is your attorney’s job to inform you of the issues and dangers.  It is your job to make the business decisions.

I will discuss “balance” in another blog.

Once you decide what you want to get done, you can determine a timeline and deadlines for the various steps you need to take.  One way to help set timeframes is to find a professional tradeshow.  The tradeshow becomes the deadline.  Now decide that you need to get done to attend the national level tradeshow and start filling in your timeline.

If you are just getting started, set aside some time every week to work on your invention.  Do as much of your own searching as you can.  Then do your best to build your version of a prototype.  We have seen great prototypes out of duct tape, cardboard, pipe cleaners and legos.   If you can’t build your own prototype, don’t worry about it yet.  DON’T hire and engineer to do drawings yet.  That time will come.

The first thing you spend money on is a professional search.  Use SearchQuest Patents (www.searchquestpatents.com ) for your search.  It is the only search company we know of that includes the international search for a flat rate.    I have other posts that discuss patent searches that you can read.  The search is the most important step you will take.

You will be surprised how easy it is to put off working on your invention.  Before you know it, we will be celebrating another New Year.  Make sure you can look back at 2013 with accomplishments that make a difference.

I recently had a client very disappointed that he didn’t have a “deal” done in a matter of months.  He had no product manufactured to sell which creates a huge hurdle.  It’s not impossible to get a deal, but it does take longer.

I always make sure that I explain the possible timeframes and obstacles for various products.  Since as a licensing agent, I don’t get paid until the inventor gets paid, I have to be very aware of timeframes.  The hardest part is when the inventor “forgets” what we discussed in the beginning and goes back to believing in unreachable goals.

Bottomline:  Timeframes are hard to pinpoint.  Don’t be unrealistic.  The more you do for your product, the easier it is to license.   The less you are able to do, the more challenging it is to get a deal and it takes MORE time.

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I know that I have talked about this before but it is time to do a reminder about what is realistic in this economy. I recently “fired” a client because he had expectations that were beyond reasonable.We had a firm licensing offer: a royalty offer of 5% for the life of the patent.  Unfortunately, the client believed that he should have been offered a $2.5 million buyout.  There was no way that we were going to reach any compromise. Faulty reasoning:

1. Not every home in America is going to want one.  Unless you invented the toilet, not EVERY home is going to have one of anything.
2. A product with issued IP is not a “company” with a book of business.
3. Expecting to be paid up front for your sweat equity is a thing of the past.
4. The invention is good but not a game changer for the industry.

A licensing agreement is a way that you partner with the company that is going to manufacture, market and sell for you.  In essence, you are sharing the risk with them.  While a buyout does happen on rare occasions, you have to be objective about your invention and your expectations.

Here are some points to help determine royalty percentages:

1. What market share do you have todate?  This does NOT mean how much you fantasize about getting in the future.  It means how many have you actually sold.
2. How strong is your intellectual property?
3. Is your invention a “game changer” for the industry?
4. Can you cross into multiple industries?

A good licensing agreement is 5% to 7% (sometimes 10%) for the life of the patent.  If you are offered less than 3%, you should figure out why.  There are many companies out there that will charge you up front and pay a very low percentage.

There is a balance between being too greedy and being too desperate.  Get help and ask questions.

Good Luck.

A couple of things to keep in mind if you are considering using a licensing agent:

1.     If you enter an arrangement with an agent because he/she is tough and will really look out for your interest, doesn’t it make sense that the agent will be tough when negotiating his/her own agreement with you?

2.     If you try to cheat your agent at the last minute, do you really think the new company that is considering licensing your product is going to trust you?  A good agent isn’t going to tell the licensee what you have done;  he/she doesn’t need to say a thing.  Licensing agents and licensees frequently have ongoing working relationships, so when the agent suddenly is not part of the conversation any longer, the licensee connects the dots.  Your impulse to stiff your licensing agent to save a couple of bucks is just bad business; it will certainly lead to fall-out with your agent and, quite possibly, tank the deal and your reputation.

I work hard for my clients and I don’t get paid until they get paid.  It isn’t unusual to spend two or more years getting a deal done.  When you have an agreement with a licensing agent and he or she has already done the heavily-lifiting for you (whether it’s a mere introduction to the right licensee or crossing the “I’s” and dotting the “T’s” on the definitive licensing agreement), trying to re-negotiate your deal with your agent at the last minute, is very bad karma indeed.