My grandmother used to call this “tough love” and I know it’s not what many of you want to hear but here it goes…. Most of you will lose money filing a patent (i.e. you will spend more money filing a patent than you will ever recover in income from your patent). As someone who makes their living writing and filing patents for people, this is not an easy post for me to write but the truth needs to come out (no matter how hard it is to hear).
About 10 years ago the US Federal Trade Commission investigated invention promotion firms that specialize in working with inventors like you to license their ideas and found that less than 1% of inventors working with these companies actually made a profit licensing their inventions (source). Let that sink in for a bit. For every 100 people that they worked with only 1 (or less) made money. During my 18 years of working with patents I can confirm the accuracy these dismal numbers. Making money from your patent is extremely challenging. Far too often people think their idea and their patent is their personal lottery ticket to success. All they have to do is find someone to pay them big money for it and they will be financially free. Sadly, getting a patent is usually the easiest and most straight forward part of the entire process and many soon find out that actually trying to find someone to buy or license your patent is extremely difficult.
Although many fail, some do succeed. This post is not meant to be all doom and gloom. I have worked with many successful companies and inventors in the past who have gone on to create a business or sell and license their patents. What sets these winners apart from the rest of the pack? There is no secret formula but I have observed a few things that seem to increase the chances of success. In no particular order they are:
Engaging and connected people. I have seen great ideas go nowhere and questionable ideas raise millions based on the type of people behind them. Passionate, organized, and engaging people who know how to sell themselves and sell their invention to others seem to do best. More importantly, inventors who have some type of connection to their potential customers have a better shot at success. For example, I worked with an inventor who works with oil and gas pipeline companies during his “day job” so when his new patent for an invention to help pipeline workers came out he already had the connections in place to pitch his idea.
Solving a real problem. Your invention should solve a problem, but what may be a problem to you may not be a problem to others. Inventors who have spent the time and energy to actually do market and customer-based research to quantify the problem will have an advantage here. Along these lines I am a big believer in the Lean Launch Pad model which helps address this.
Consumer Products are hard: We all want to create the next Instagram or hot kids toy because the market is huge (100's of millions of customers) but that is also the hardest market to get into. In my experience inventions that solve a “business” need or challenge are a lot easier as the pool of potential customers (i.e. businesses) are a lot smaller and they often have more money to spend on implementing new products and services.
Hopefully you found this post helpful and not too scary. Patents are good and valuable tools (see “the business case for a patent”) but they must be used correctly and you should know the risks and costs going into it.
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