Frequently Asked Questions Page 2

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The main difference between “selling your invention” and “licensing your invention” is in the transfer or rights. When you sell your invention, you transfer rights of ownership. Licensing is like “renting” your patent rights or invention, which allows you to retain the ownership of your invention.

After a company expresses initial interest in an invention, they will do their homework before proceeding with a license agreement negotiation. This typically involves working with us to gather additional information, beyond what was listed on the Invention Portfolio Dashboard. Once we have interest in your invention, we will contact you to share the fact that we have interest, and to see what additional information you can provide as the company reviews the invention further.

Most companies only offer feedback if they are interested in a product. They typically do not offer feedback if they do not have interest. Some companies can take 12+ weeks to complete their review process and won’t offer feedback until that process is completed. In some instances, companies tell us upfront that they will be in contact if there is interest and ask that we not follow-up and allow the review procedure to take its course.

If we do receive any feedback or interest in your product, we will directly contact you.

While it is possible for more than one company to license a product, it is unlikely. If a company is going to put forth the time, effort, and money to develop a new product idea they typically want to avoid the chance of competition from other companies and so will require exclusivity.

There is no set timeframe for reviews because each company operates its own internal review processes differently. Some US companies review daily while others may review weekly or monthly. InventorAssist™ monitors and encourages US companies to be diligent with reviews and decisions to ensure that you will have a result within a reasonable time.

There may be several reasons for companies declining your product, including one or more of the following:

  • Your idea is not new or innovative, or the innovation idea is not compelling enough to overtake existing products.

  • Sometimes they carry too much inventory and want to sell their own stuff first.

  • Sometimes they have cash flow problems and do not have enough money to develop and market a new product.

  • Sometimes the market is in a recession. Say for example the company’s retail sales is 20 % down. They must then focus on selling existing stock and do not want to take on new products.

  • The innovation may be too technical or in an industry they don’t specialize in.

  • Companies are looking for products with the clear potential to do significant revenue. Some items, while great ideas, are too niche or low cost to add up to enough income to justify their involvement.

  • Products that are not capable of being sold through typical retail channels may create distribution challenges which the company may wish to avoid.

  • Sometimes a company is of the opinion that your idea will not sell to consumers in significant numbers, to justify its investment.

Yes, you may manufacture and market your product anywhere in the world, including South Africa. You should just keep us informed of your progress so that your exploits do not jeopardize your prospects of landing a lucrative deal with a global company.

Yes, you are welcome to market your idea and if you find a company on your own, we do not collect any royalties from you.

Licensing is how inventors make money from their ideas. Starting a company to make and sell a product is taking on the journey of becoming an entrepreneur, and is a lifestyle choice that is much more life-altering than licensing. While it is true that you can potentially make more money as an entrepreneur, it is also true that you will invest much more time and money to find out. There are many advantages to licensing.

You do! We would offer our suggestions, but ultimately you must agree to the deal and have final say on what you will agree to. We will discuss in advance of each negotiation our target terms, and consult with you at each interval to make sure we are on the same page.

Yes. We will manage and facilitate this process and will include the inventor throughout the negotiations.

First, it is important to keep a level head and to be patient. Licensing a product is a challenging process and it takes time. Some products may take several years before it licenses and earns the first royalty cheque. Some inventions license in a few weeks and others may take a few years. Our process is designed as an ongoing marketing program that offers your invention continued opportunities as long as we have your portfolio dashboard active.

This is most definitely NOT a get rich quick game. Most new inventors vastly underestimate how long it will take to get a return on their investment. It usually takes several years from idea to market. Getting to market isn’t the end of the journey, either. It takes time for distribution to grow and markets to develop.

Furthermore, please keep in mind that there is no way to predict or guarantee that your idea or any idea for that matter, will succeed. Ultimately, it is the manufacturer or product company that makes the decision on whether to pursue your invention or not. And, they could have many different reasons for or against licensing your invention. Our goal is to give your invention as many opportunities to succeed as possible. When you profit, we profit!

Your intellectual property, comprising of your new and Innovative idea, your Sketches, CAD drawings, Images, Videos and prototypes are protected in the following manner:

  1. We sign a Non-Disclosure Agreement (NDA) with you;

  2. Copyright in your Descriptions, Sketches, Drawings, Images and Videos follows automatically.

  3. The US or global company that licenses your idea will most probably register a non-provisional (final) patent in the USA in your name, without any cost to you.

  • If you don’t have a patent pending, you show up less serious to potential licensees, who are now wondering what they are paying for

  • What is being licensed, is your innovation evidenced by the patent.

You don’t want to rush into the patent process. You should wait until you have a compelling prototype to make sure you are patenting the right invention. Feel free to submit to InventiorAssist without a patent pending and we will let you know when you are ready for one.

No we don’t. We can refer you to some we have worked with in South Africa and the United States. We have lots of experience navigating the process if you are just getting started. We can lead you through this expensive and confusing process. In this process, we do not act as a lawyer but rather as a business concern representing you.

Your provisional patent application is valid for 12 months from the filing date. Once you near the end of this 12-month period, you will need to decide your next step.

Once your provisional patent application expires, you will no longer be considered patent-pending and your invention will no longer be protected. Some inventors move on to file a non-provisional (Utility) patent application before expiration of their provisional application, which will give them final and complete patent protection. Others decide to abandon the invention due to lack of interest during the provisional period. This is a personal choice that each inventor must face.

Inventor-Assist does not prepare or file Utility Non-Provisional (final) patent applications; therefore, if you have any questions regarding this type of filing, please contact a patent attorney or patent agent. If you need a referral, feel free to contact us and we will be able to provide contact information for a reputable patent firm.

It is not possible to extend or re-file or renew the same provisional application. We strongly suggest that you contact us once you near the expiration date of your provisional patent application, so that we can give you guidance as to your options.

A typical royalty percentage in a license agreement is between 3% – 7% of gross sales, depending on the idea, the industry and other factors. You can do the math: a million dollar product would yield US $ 50 000 (about R 1m) on a 5% royalty. On this amount, a commission for your agent will be deducted. Most products never create a million dollars wholesale, and for any that do that is a great victory. Some products, of course, do much more than that, and 5% of US $ 5 000 000 is a nice royalty, especially considering it is passive income paid in US dollars. Caution, however: many inventors overestimate the likelihood and scale of their idea’s success. Inventing is a high risk, high reward game, and many stars have to align to create a win. But should you land a TV – marketing contract or license a mass appeal idea, you can earn a fortune.

We actually don’t think they are. A well-run manufacturing business might make a bottom line profit of 10% – 15% after the cost of goods sold, sales commissions, warehousing, freight, administrative staff, etc. An inventor receiving a 5% royalty is making ½ to ⅓ what the licensee, who is taking ALL the risk, is making. In fact, these royalty figures are a very good deal for the inventor and a true win / win situation. The companies are willing to be so generous because they need more great ideas!

We work as your licensing agent on a contingency basis which means we only get paid if you make money. You are responsible for your own expenses like product development, patents and the cost of submissions to companies. Of course we can assist you with all of the above.

There are no hidden or upfront costs.

Your registration and membership of InventorAssist™ are free of charge.

We do not charge you for the assessment and evaluation of your new idea.

We do not charge you for any advice given or consultancy fees.

There are no monthly fees or any retainer.

To develop your product on your behalf, we employ service providers and graphic designers if and when required, subject to your approval. We provide quotations for the different stages of development. You are free to do your own development of your product, but in doing so, you have to comply with regulatory and statutory requirements in the USA, as well as the prerequisites of the USA companies. Fear not: we will guide you step by step all the way!

Once a contract has been concluded between you and an approved company, there are no further development, manufacturing, marketing of patenting costs, which will all be provided by the US company manufacturing and marketing your idea.

However, InventorAssist will be entitled to a commission of 30 % of all royalties or equity received by the inventor (our client). Your portion of the royalties (70%) may still be very substantial, taking into account global markets and payment in US Dollars.

Only if you make money, will we make money!

This depends on the deal. Usually, the inventor covers provisional patenting costs, and once a license is in place, the licensee (the company) takes on all additional development, distributing, advertising and marketing costs. Almost invariably it can be negotiated that the licensee (the company) handles non-provisional (final) patenting costs as well. InventorAssist is never responsible for any expenses unless explicitly agreed on in advance.

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