Trademark Assignment!
Dear Kenny,
Thank you very much for helping me sell my trademark. It was clear from the start that you knew exactly what you were doing. Not many companies can boast that they got their client five times more than the original offer. FIVE TIMES MORE!! Wow. All I can say is you exceeded my expectations and I look forward to working with you again.
Thanks,
Todd White
Suit Concierge
816-217-4387
Hmmm…That’s a good question!
Hmmm….That’s a good question!
By: Kenny Durham, President at Innovators Warehouse
Early in my career I had a sales call with a potential licensee. The call was going great. The licensee recognized the value in my client’s intellectual property. He was talking to me about how he saw the patents developing into a full line of products. We spoke of how his current distribution was perfect for the yet to be developed product. I was encouraged about the opportunity and I was feeling pretty good about the hours and hours of work it took to get ready for this one call. .
A 16 page product prospectus – dripping with great graphics, photos of the prototypes, graphs and charts, awesome financials, formal market research, competitive product analysis, and superbly written text. My ducks were in a row and quacking – I nailed it. I made a case for my client’s project that Perry Mason couldn’t poke a hole in.
Then the rubber met the road. The prospective licensee asked the Magic question, “What did I want for the patent?”
I went into my normal pitch about how my client understood that licensees typically take most of the risk and therefore they deserve to make the lion share of the profits. I pointed out how my client knew the rewards he would receive in the form of royalties would be based on how often the ultimate product judge and jury, consumers, felt inclined to purchase this soon to be product. I hate to brag but boy was I on a roll. I hit it all. I had convinced the licensee I had a great product. I made sure he knew my client would be easy to work with but that he was also aware of what standard industry financial terms should look like. Then I get the curveball question.
“But if I didn’t want to license the patent, how much would you sell the patents for outright?”
I wasn’t ready for that one. It hadn’t occurred to me that buying these unproven patents outright was even being considered. First of all I was so busy selling my plan I forgot to consider that someone else may take another path to commercialization. To me licensing almost always makes the most sense however what makes sense to me doesn’t always matter.
Unfortunately I didn’t have an answer. All I could come up with was that we hadn’t considered that option yet because we knew that typically the best way to maximize the value of a patent was through sharing in the long term success of it rather than just a onetime payment. Especially for a consumer product patent who hadn’t proven itself in any way.
The conversation did get interesting from there though. The licensee was probing trying to figure out about how much my client had invested in the product. Once the buyer felt like he had a good grasp of the number he then pitched out that he might be interested in buying the patent for roughly five times what my client had spent to date.
In most worlds this would be a slam dunk. If you bought a car two years ago and could turn it around for five times what you purchased it for you would do back flips. Take a house for example, or a dog, a skateboard, or a company, anything really.
But for some reason it doesn’t seem nearly as attractive when we are speaking about patents. Why is that? Why don’t we treat technology transfer like other industries? Why do we treat creations of the mind so differently? Everyone wants a million dollars for their IP. It makes me question what would happen if we all treated real estate the same way. “I know the market value of my house today is 100k however I want you to pay me 500k because it will surely increase in value over the next twenty years.” If you made five times your money by putting it in the bank you would jump for joy.
I guess what I’m saying is – First, treat your Intellectual property like a business. Don’t be so emotionally attached to it. There is a very good chance that you could miss out on a great business opportunity if you can’t figure out how to separate yourself. Second, listen to your potential licensee or buyer. Don’t get so caught up in being proud of your work that you overlook key points that will help you put a deal together.
The customer usually tells you how to sell to them, if you just take the time to listen.
In addition to being a huge supporter of the UIA and the inventor community – Kenny Durham is the CEO of Innovators Warehouse and one of the most successful product deal makers in the industry.
Posted by Mark Reyland at 8:46 AM http://inventoropinion.blogspot.com/2011/02/hmmmthats-good-question.html
If you would like to learn more on how Innovators Warehouse can assist you with your commercialization efforts, please visit www.innovatorswarehouse.com/free-inventors-kit/ and let the IW Crew open the Warehouse doors for you!
Licensing Experience at its Best…
LICENSING EXPERIENCE AT ITS BEST…
I was first referred to Kenny Durham of Innovators Warehouse by Mark Reyland of United Inventors Association USA (www.uiausa.org). Mark described Kenny to be a very honest and professional person. I have since found that to be absolutely true!
As the owner of Around the Table games, I consulted with Kenny to help me prepare to search for a Licensee for my product line. Ironically, I was offered a licensing agreement about that same time. So my focus with Kenny shifted to that of consultant. Kenny’s experience negotiating agreements allowed him to offer numerous suggestions that helped me to draft a comprehensive agreement while protecting my best interests.
I have found Kenny and the staff at Innovators Warehouse to be the most knowledgeable, professional and motivated group of people to work with. I have since referred numerous other inventors to Innovators Warehouse.
Innovators Warehouse is the perfect resource for inventors!
Beth Daniels
Founder, Around the Table Games
If you would like to learn more on how Innovators Warehouse can assist you with your commercialization efforts, please visit www.innovatorswarehouse.com/free-inventors-kit/ and let the IW Crew open the Warehouse doors for you!
PGA Show 2011
Teeing Off Your Invention at PGA Show
The Professional Golfers Association Merchandise Show is right around the corner in sunny Orlando, Fla., January 27-29.
The PGA show is where anyone who’s anyone in the sports industry shows up to see the latest in new merchandise and new innovation for both the golf and golf support categories. From clubs, bags, and ball, to clothing, games, cleaning supplies, and even beverage products.
Fall Newsletter
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Innovators Warehouse | 931 SW Lemans Lane | Lees Summit | MO | 64131
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Client Spotlight
Startup Weekend
September Newsletter
Our September Newsletter is hot off the presses, to see it click here. We’d also like to say congrats to our friend Mark Reyland for becoming the new director of the UIA! Good things are sure to come!
Inventors Digest: Contingency Caution
When a Deal Seems too Good to Be True, It is
by Kenny Durham
[September 2010 issue of Inventors Digest]
I’m unsure who first said, “If an invention marketing company really believes your product is a moneymaker, it should work on a contingency basis.”
My guess is that it was either a desperate inventor grasping at one of the few options left, or an opportunistic invention marketing representative preying on said inventor.
More than likely, it was a combination of the two.
Some invention marketing companies often promise they won’t make money unless you make money on a licensing deal. Don’t believe it. These companies will charge you fees to produce template-like marketing materials of dubious value. The up-selling of more materials of even more dubious value is sure to follow. Meanwhile, you’ll likely end up waiting in vain.
Companies that perform evaluations based on contingency typically position themselves as having expertise across multiple industries. This should be your first red flag. Few companies have the resources to be expert in a vast array of industries.
Inventors are vulnerable to the false promise of contingency deals because too often they’re seeking validation. They’re dying for a so-called expert to confirm they have a valuable idea and that they haven’t wasted time and money.
Yet the words “evaluation” and “contingency,” when used in the same paragraph, should send inventors running.
The truth is, if inventors followed common sense steps to commercialization, they already would have gained confidence and wouldn’t need reassurance from opportunists.
The U.S. Patent and Trademark Office reports between 1-3 percent of all patents issued will be commercially successful. The success rate of some invention marketing companies runs about .001 percent. Yep – about one in 1,000.
Inventors often think invention marketing companies function or ought to function like real estate agents, who agree to sell a home for a percentage of the selling price. The agent is an expert in the real estate industry and well-versed in the nuances of the local market. In real estate, everything has a value – 100 percent of real estate property will eventually sell, it’s just a matter of price.
And this is where a lot of inventors end up acting out of desperation. Unlike a real estate agent, who’s an expert in the housing market, invention marketing companies are likely not experts in your industry.
People spend lifetimes becoming experts in a particular subject area. And how can they know each particular industry well enough to judge whether a product or idea has potential?
When it comes to intellectual property, it’s difficult to determine value because much of the time none exists. This is intellectual property, after all, a novel idea, a potentially revolutionary product that right now has nothing but a patent to back up its promise.
American enterprise universally accepts the notion that marketing plays a pivotal role in the success of products and services.
More than $285 billion dollars are spent annually in the U.S. on advertising. McDonald’s alone spent $2 billion on advertising in 2008.
The fact is advertising works. Its success can be measured through return on investment, market share and various other marketing metrics. It’s understood and embraced by every successful business enterprise, whether a sole proprietor or multi-billion dollar corporation.
If McDonald’s operated within the basic marketing tenets of the intellectual property industry, the fast food giant would have ad agencies lined up around the block begging for its business on a contingency basis.
Imagine if McDonald’s marketing executives sent out a request for proposals, promising the selected marketing agency 10 percent of all McDonald’s revenue following a particular promotion or ad campaign, whether or not the sales were a direct result of the agency’s work.
There’s no way McDonald’s would entertain such an offer. It just doesn’t make sense.
What’s an inventor to do? Like the invention marketer who works on contingency, the lone inventor can’t be expected to be an expert in all phases of product development. It generally takes a team.
“Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work,” said legendary football coach Vince Lombardi.
Focus on what you do best, and hire a creative marketing team to do for you what they do best.
I understand that sometimes inventors believe they have no choice. The patent process is exhausting and can take a heavy financial and emotional toll.
For these individuals, a contingency deal may be their last option. And so at the final crucial moment, they give away control of their product in exchange for magic beans.
Countless times I hear patent owners say something like, “I’m not greedy; I don’t mind sharing. If they get it done for me then I don’t mind giving them 10,000 times more money than they deserve.”
That’s the sound of the desperate. And every time I hear it, I’m thankful that Thomas Edison or Henry Ford didn’t think that way.
Want to commercialize your idea?
Five common-sense first steps
Step 1. Start with a Big Idea
Innovation starts with a big idea of something you can do better, faster or cheaper than the way it has been done before. But it takes more than just a big idea. Here’s what Thomas Edison had to say on the subject:
“What’s The Value of An Idea? Zero. Ideas that are implemented and become new products and services are very valuable. The value of an idea lies in the using of it.”
Step 2. Do Your Homework
Do your own market research. Make sure someone else hasn’t already had your idea. If your idea is pioneering, try to be realistic about why no one has tried it before.
If it has been tried but is no longer on the market, find out why. Conduct a Web search and a patent search. Google Patents is a good place to start. Consider things like ease of manufacturing, production cost, distribution issues and financial commitment. But most important, think about how your invention will make life better for others.
Step 3. Build Your Plan
Construct a plan. Ask yourself if you possess the financing and skill to see your plan to fruition. If not, locate helpful resources. Inventors groups are a good place to start.
Step 4. Own your Idea
File for a patent, copyright, trademark or whatever intellectual property protection is appropriate. At this stage, you likely will have to hire a patent attorney.
Step 5. Treat Your Idea as a Business
Do what successful businesspeople do – concentrate on the things you do well and build a team to fill in your gaps. Focus on the financial bottom line, keeping costs as low as possible.
Design Competition
Click the link for all the details!
http://pbskids.org/designsquad/contest/index.html
