Wednesday 25 August 2010
Think you can sell your idea?
One major difference between research sector-based innovation and inventor-based innovation is that in the former, the intellectual property position is reasonably certain. However, with 'inventor'-based innovation, the typical lack of any process equivalent to a literature review reduces the certainty that there is anything unique about the product, idea, or service being developed.
The cost of acquiring intellectual property rights is substantial – the AIC’s rule of thumb is that patent costs can run to in excess of $20,000 per country and we speak with a lot of inventors who are surprised when they hear this. Needless to say, internationally patenting an invention is 'a rich man's sport' and it is not a coincidence that those most active in patenting are typically large companies that are very well funded.
Commonly, inventors tell us when they call the AIC that they want to 'sell their idea'. We advise them that although this happens occasionally, it's so rare that building a strategy around selling an idea is not advisable. Licensing can be one mechanism to make an idea more tradeable, but before you license a product or service, you will need to ensure you have a legal right to license. Thus, the patent must first be issued, and not only in provisional or application phase. The second piece of advice we provide (aside from the usual commercial advice around making sure there is a sufficient market at a sufficient price to justify proceeding), is that you will need to proceed to 'design for manufacture' (i.e. design for mass production) in order to engage with large companies. Large companies will rarely do 'engineering' for an inventor.
For example, we extracted the following excerpt from a Proctor and Gamble ‘invitation to submit’. It states:
- You must have defensible IP (trade secrets are fine of course, but usually patents);
- You must be able to show a pre-production product and produce a specification.
In summary, if you think you can sell an idea, perhaps you should think again and the following content from Modewena Rees-Mogg of the UK Angel information source www.angelnews.co.uk demonstrates this further through its example of open innovation in large organisations.
Open innovation is becoming an essential part of business development in the western world as it enables innovative young companies to engage with large corporates who can become their customers, partners, owners or even suppliers.
P&G, for example, leads its open innovation initiative through its FutureWorks team which creates and develops ideas and partnerships and seeks to find external solutions to internal needs. A current example is regarding the need for a laundry pre-treater product or device. P&G are seeking ‘simple market ready devices, delivery systems, packages, and/or cleaning articles, requiring limited development that can be used for cleaning of stains on garments via pre-treatment prior to laundering’.
However, P&G are very clear about what they are looking for (i.e. market ready solutions requiring limited development) and what they are not looking for (i.e. conceptual solutions or product ideas with no IP protection). The full criteria for this particular need is outlined here.
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