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How to prevent manufacturer from selling invention or how to track sales

How to prevent manufacturer from selling invention or how to track sales

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  #1  
Old 04-04-18, 12:28 PM
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How to prevent manufacturer from selling invention or how to track sales

I have an invention and I built a prototype.
I don't have the means to get a patent.
I'm going to take it to a domestic manufacturer to a inquire about manufacturing costs.
Since the manufacturer is in the same space, I want to ensure they don't take my idea and market it themselves.
At the same time, if we enter a licensing agreement allowing them to do so, how would I know how many units were sold and hence what my royalty sum would be?

As far as the first part, I was going to ask an NDA be signed and the presentation/meeting be held via skype and I'd record the proceedings in the background, would this be sufficient to protect me in case the manufacturer starts making/selling it on their own (or a recorded WebEx)?

As far as the second part, the licensing, I have no idea how sales are tracked, they could tell me "we only sold 10 units the whole year", how would I know if they sold 10,000?
 
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  #2  
Old 04-04-18, 01:03 PM
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Michael -

You have an idea that may be patented. To protect yourself, you should not divulge the unique properties that make it valuable. If you do not, it can be considered "public domain" information.

If so, go to a patent attorney to get advice on where to go with the general information on the idea and your idea of the some of the applications. A patent is necessary before you consider giving the production rights to a manufacturer that has noting to gain until there is a market and a demand.

Do not go to someone that is just close to you and near a manufacturer. Avoid an attorney that knows a specific manufacturer.

You must protect yourself by going beyond a "unique" idea and determine the future of the idea/concept.

Getting a patent is relatively easy, but getting a good, solid patent that has value. Often applying for a patent provides ammunition to the more knowledgeable people that can take a good basic idea and improve on it and collect the royalties.

Getting a patent can be easy, but marketing an idea and protecting yourself from smarter, more aggressive people that are willing to out-promote you and have the means to do so. In the end it takes a lot of work and time to make money from your concept.

The minute someone has a competitive idea, the need for your money and time on your behalf starts.

The best thing to do is a patent search on the unique properties og your idea and the possible applications. - You can do this yourself.

Dick
 
  #3  
Old 04-04-18, 08:55 PM
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Getting a patent may be easy but it's way beyond the budget
 
  #4  
Old 04-05-18, 04:10 AM
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Without a patent, you dont own anything. That idea is anyone's idea.

You cant give rights to something you dont own. Without a patent, you dont own it. Once you show it to someone, its fair game & nothing you can do about it. The patent is the "rights".

Back years ago, you could get all the facts of the idea together with an accurate drawing, put it in an envelope, go to the post office & send it to yourself via registered mail. When you get it... never, ever open it. That was your proof that it was your idea on that date. Today, that doesnt work.
Later, it was struck down in court as... but you dont own it. Its fair game, until someone gets a patent on it & legally owns it. Until then, its anyone's idea. Just because you have the info in a sealed envelope dont mean it was your idea but that wasnt the point. The point is, you need to own a patent, which gives you the rights to that product. Without a patent, you own an envelope full of papers. Period.

Owning/getting a patent is an expensive project. Putting a check in the mail & getting back a patent may be easy but its expensive. You need to have a legal description & drawings describing your idea specifically. Then there has to be a patent search to ensure that there are no other patents that your idea will infringe on... the list goes on & on. This aint something that you can do yourself. This is a serious thing & requires a patent attorney to get you through the process.

In addition to getting the patent, you have to renew the patent every few years to retain the patent rights. That can be in the hundreds or thousands of dollars to renew the licence/patent.

In order to get a patent into production or before any manufacturer will even remotely consider investing into production of the product, they have to have marketing research done to ensure the product will sell or will be profitable. They will hire a marketing firm to determain if in fact there is a market for it, what its worth (what people will pay for it), How many people will buy it & for how long ( seasonal, duration, life expectancy etc, etc). If you think they are just going to take your word for it, your... well, never mind. Now just for noting, if you want to pay for all the equipment, employees & material to manufacture this thing, we may have a different story, but since you dont have the budget to pay for a patent, I am assuming you having a few hundred thousand or more on hand for experimental production, is out of the question.

This aint something that you can just dream up & wake up tomorrow morning to a big bank account. You need the big bank account first, then start your dream project/idea. Either a big bank account or good credit.

And, stay away from those invention assistance gimmicks. If you think that George Forman went through Invent Help to get his Foreman Grill to the market, your... well, never mind. Stay away from companies like that & get yourself a good reputable patent attorney.
 
  #5  
Old 04-05-18, 04:24 AM
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Sorry, I didnt answer all of your question. As for tracking production. Your attorney will have guidelines in the contract to prevent this. Once production has begun, if you feel they are skimming you on production, go to your attorney, if he feels you have a legit argument, he will apply to a judge for a warrant, if granted, he will send in an auditor of his choosing to audit production.
 
  #6  
Old 04-05-18, 04:38 AM
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Your only defense is a patent. But... a patent is only as good as you are willing to defend it. There are no "patent police". You must do everything. It is up to you to find those infringing on your patent and it is up to you to prosecute them. And from personal experience I can say I no longer bother with patents for most items. Unless the item is going to be such a revenue generator to offset all that is needed to defend a patent it's just not worth it. For most products I now just get them out there and sell them and make my money before anyone else can copy or profit from the idea. Then by the time someone copies the idea I have the market largely saturated and it's sales are on a downward trend so there is relatively little lost to copy cats.

As for insuring that the production quantity reported to you is accurate. That also is for you to monitor and police. I have a patent and a manufacturer was licensed. Reports and royalties came through for several years. Then one year I visited a factory and noticed more of my product in one location than the manufacturer had claimed for the entire years production. So, off to a lawyer and negotiations bla... bla... bla... to try and get the royalties due to me. It was a major headache and expense.
 
  #7  
Old 04-05-18, 10:17 AM
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This is quite bleak. But thanks.
I guess the only answer is to produce under the radar until the big boys "squash you like the cockroach that you are"
 
  #8  
Old 04-05-18, 10:42 AM
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If your idea is marketable then it is worth the effort and expense to patent it. If not any manufacturer you approach is going to tell you to take a hike as soon as they find out you don't own the idea. If it's a really good idea they will then apply for the patent themselves.

My wife had an idea a few years ago and we started the application process. We didn't get past the search though. We paid $600 for the search and a bit more for drawings. I think the application would have cost less than $5000. That doesn't seem like a huge expense if the idea is worth it.
 
  #9  
Old 04-05-18, 12:16 PM
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If your idea is worth it, then don't try to patent or own it. SELL IT! Get whatever money you can and let it go.

I'm betting if a search was done your idea is already out there in a similar form. Very little is new. Even if an idea is unique it may be that no manufacture would want it for several reasons. It may cost too much to tool up. Alternatives may the do the job just as well. An other brand with similar value may be so well entrenched in the market that it's not worth the effort. And if the idea is that unique and great, advertising the heck out of it is the only way to market it to success. But that is very expensive and return may take awhile. That is why a company may not want it. There are literately thousands of great inventions that never make it to the consumer due to such things as I mentioned.

I don't mean to be a downer or discourage your genius, but the hard facts should be known now before you jump in. On the other hand there are those who made millions with a very simple idea. Think "Pet Rocks".!
 
  #10  
Old 04-05-18, 12:21 PM
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Originally Posted by Norm201 View Post
If your idea is worth it, then don't try to patent or own it. SELL IT! Get whatever money you can and let it go.
How would I go about selling the idea?

Also, if I were to just manufacture this myself, how would I prove that it was my idea first so as part of the sell I could claim "original", "first", etc?
 
  #11  
Old 04-05-18, 12:42 PM
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Start by GOOGLING "I Have An Invention". There are several companies that will take an idea and market it for you. That's what those late night TV adverting programs do. In fact there was a weekly show (several over the years) just about those people like yourself that had ideas and wanted to market them. You first step is to research and the place to start is Google.

Also, if I were to just manufacture this myself, how would I prove that it was my idea first so as part of the sell I could claim "original", "first", etc?

Just do it and say it since as far as you know no one else is marketing it. And if they try and claim they were first , prove it!
 
  #12  
Old 04-05-18, 01:31 PM
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Originally Posted by Norm201 View Post
There are several companies that will take an idea and market it for you.
What about Dixie2012's warning: "And, stay away from those invention assistance gimmicks", how do I best discern those from companies that will take and idea and market it for you?
 
  #13  
Old 04-05-18, 01:42 PM
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I agree with Dixie. But they do provide a service. It's risk and a gamble. Lots of research is needed. No quick answers. We have given you a path to follow, but you must walk it. Good luck.
 
  #14  
Old 04-05-18, 08:43 PM
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Thank you, much appreciated
 
  #15  
Old 04-06-18, 10:11 AM
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Something else to consider, even with a well-written patent, NDA, and whatever other legal documentation, other companies can still easily steal your idea and manufacture and sell it.

With the patent, you can of course sue and potentially win, but again, you need the time and money to go after them. And even more time and money if they are international.

Look at how many iPhone knockoffs there are, even with Apple having a nearly unlimited supply of lawyers!

Don't let this dissuade you though, if you have a good idea, go for it! Understand the risks, and realize, something is better than nothing!
 
  #16  
Old 04-06-18, 12:41 PM
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One more thing. If you do this on your own, add the words Patent Pending. It does not need to be actual fact, but it might dissuade someone from stealing or coping your idea.
 
  #17  
Old 04-06-18, 03:58 PM
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One thing not mentioned...you really need to do a patent search. Just because you haven't seen something doesn't mean someone else hasn't thought of it and patented it before. To paraphrase the old saying, there's very little new under the sun. The last thing you'd want is for someone to come after you after 2 yrs of selling the things and demand 50% or more of any profit and hit you with a cease and desist.

Companies file patents on things they have no intention of ever building and selling just for these situations.
 
  #18  
Old 04-17-18, 08:31 PM
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Contrary to what Norm201 said, do NOT mark anything as "patent pending" unless you actually have a provisional or non-provisional patent application filed (perhaps that is what Norm201 meant by saying "if you do this on your own"?). Google "35 USC 292" to see the federal statute that applies to false marking.

Obtaining a patent can be a VERY expensive process, but it can sometimes be a bit cheaper than you may think. You should speak only to a registered patent attorney (or a registered patent agent). You can find them (us) on the US patent office's website, and you can search by zip code, etc. Every single one of them (us) that is listed has passed the Patent Bar exam and has a science background; registered patent attorneys have also passed the bar exam of at least one state (registered patent agents have not passed a state bar exam).

Most patent attorneys will give you an initial consult at no charge. It may be worthwhile to see if you can speak to a patent attorney for a bit. Until you do, you should NOT discuss or disclose your idea to anyone (there are some exceptions in patent law that will protect you, but its better to just keep the info to yourself for now). If you have disclosed the info, then a 1 year clock is running - you should speak to a patent attorney SOON.

Hope this helps!
 
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