Flying Pig Designs LLC
Patent & Sell Your Ideas for Profit
Wouldn’t it be great if there was a career path where you could use your creativity and resourcefulness to generate livable income, all without leaving the comfort of your home? Well, I have good news. There is a way.
Most people don’t think of themselves as inventors, but have you ever had that idea you just knew everybody would want? From little kids to grandma and grandpa, everyone has ideas that can bring in cash. The best part is that you don’t need a million-dollar idea to make a very livable wage. Million-dollar ideas are hard and rare (that’s why they are million-dollar ideas!), but you can achieve that same dream by coming up with far easier ideas, just more of them. For example, let’s say you want to make $100K before taxes. If you could come up with 5 ideas that make $20k, you just hit your goal!
Now for a little reality check. What do you need to do to hit that $20k mark? Well, that depends. A horrible thing to hear, I know, but how much of the revenue you will pocket depends upon how you sold your product. Did you license it? Sell it direct? Have another company sell it through a partnership or joint venture? Personally, I tend toward licensing as it grants me the most flexibility over time while providing a very solid return on investment, and will be the focus of this article. A typical licensee will see anywhere from 2% to 8% of the “pre-retail” cost of their product, depending on their product and industry, and can add up very quickly on a high volume product. For example, if you received a 5% royalty for your gadget, sold 20,000 units at $20 each before the store adds their profit margin to the cost, you would have your $20k! Now, if you were to have sold directly, you could have pocketed more of the profits, but you would have a larger investment as well (e.g. store, website, etc). While licensing may not work for every idea, if you have enough marketable ideas, you can make it work for you.
Basically, successful inventing is a numbers game. You just need to have a plan for how to get there. Step 1 is to conduct a pre-flight check to make sure your aircraft (your idea) is sound, you know your destination (value proposition), and the weather is clear and sunny. Next, you will start your engines and take off in Step 2, testing your assumptions and constructing a prototype. Finally, you’ll bring your idea safely out of the sky and land the deal in Step 3. And of course, if you need a flight instructor Flying Pig Designs is here to help.
STEP 1: Pre-Flight Check
Know the Weather
Before a pilot takes off they look up the weather en-route to their destination. Are there any storm clouds that require rerouting? Any expected wind shear or other anomalies that could lead to problems? Similarly, knowing your market is key and where you should start for brainstorming your idea. Do some research by heading down to the local store and looking for some of the brands with products that are close to your idea. The internet is great for basic research, but you will obtain much more information at the store. Without being pushy, talk up the Sales staff, the folks shopping in the store, the person behind the register. What products are selling and why? Look around the store. How are they packaged? How are they displayed on the shelves? What colors are used? What price do they sell for? Are there unmet needs you can find? You need to know the players and trends in the market, as well as the product lines already there before you can determine how you can compliment them.
Flight Challenge: Go to your nearest electronics store and shop around. Talk to sales staff, customers, anyone you can find and see if you can identify at least 3 unmet needs.
Know Your Aircraft
Prior to getting a license and stepping into a plane, a pilot has to do ground school. In ground school, you learn not only the physics of flying, but the parts of the aircraft. You learn why a plane flies and what you need to do to control it. Like these critical aspects of flying, it is crucial that you understand how anyone that touches your product will use it. The Use Case as it is referred to in industry, describes how a user will interact with your product from unboxing to throwing away (or better yet recycling). Once you have identified your user’s unmet need, start mapping out how a user would actually use your product. What steps are needed? Why are they doing them? What could go wrong? You don’t need to be completely exhaustive, but the more complete understanding you have the better.
Flight Challenge: Pick one of the unmet needs you identified and try to map out the entire Use Case. Did you learn anything new or unexpected from doing this?
Know Your Destination
New inventors can sometimes forget their destination. And no, it’s not to get rich. You need to provide value to the customer. The money will follow. Look at your Use case. How do you provide true, black and white, crystal clear value to the customer? This is the Value Proposition of your product. If you have truly identified an unmet need, this should be easy to state in a simple sentence or Benefit Statement. If not, it is time to go back and look at the weather report. After you have identified your Benefit Statement, it is time to start thinking about your Sell Sheet. A Sell Sheet is a one page document that states the product features and why a customer should buy or license your idea. It is too early to finalize you sell sheet, but keeping it in mind will make this step easier in the future.
Flight Challenge: Google some Sell Sheet examples. Which ones speak to you? Why? Try to sketch out a couple ideas of your own. Let it sit overnight and look at it again. Do you feel pursuaded to buy? Why or why not? If not, is there a simple change you can make to change that?
Inspect Your Aircraft
When a pilot inspects their aircraft prior to take off, they are looking for any signs of damage that could cause problems in the future. Likewise, you want to take steps today to prevent problems. Now, I am not a lawyer and I’m not giving legal advice, but there are a number of ways to take steps to prevent any damage to your product, income, and reputation. First and foremost is the use of a Non-Disclosure Agreement or NDA. These are useful prior to protecting your idea in a more formal way, like a Patent or Trademark. I use NDAs when talking about my idea during User Testing or getting quotes, which we’ll talk about later. Honestly, once a patent is in place, an NDA seems to cause more problems than it’s worth. Some companies will still want them, which is fine. Read them, carefully, and sign them only after you have understood what you have read. If there are any items of concern, talk with a contract attorney who has worked with inventors and small companies in the past. A good resource for finding an attorney is the United Inventors Association of America and other local inventors, such as the Rocky Mountain Inventors Association.
Once you have reached the point where Intellectual Property protection is warranted, it is time to consider three main ways to do so: Trademark, Copyright, and Patents. At this point, I would recommend talking to a patent attorney or agent, as there are other options as well, and quite literally entire books are written on the subject. Two of my favorites are Patent Pending in 24 Hours and Patent, Copyright, and Trademark: An Intellectual Property Desk Reference. However, these three are the most common and you should be familiar with them. Another great resource is the United States Patent and Trademark Office.
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Trademarks are often implemented when a word, logo, phrase, or similar item needs protection. If your product has a phrase or logo that is at the heart of what makes it special, this may be the way for you. Typical fees are upwards of $375. At a basic level, copyright protects the form and manner an idea is presented. For example, you couldn’t create a product that uses Bugs Bunny without permission. However, copyright protection doesn’t prevent the use of a generic anthropomorphic rabbit. Lastly, patents. These are everyone’s “favorite” and widely used. However, there are a number of available types of patents that can protect your idea without necessarily breaking the bank. Below is a list of some of the popular patent types and some information about them:
| Patent Type | What it does | What it doesn’t do | Cost |
| Utility | Protects your listed claims for 20 years | Prevent others from designing around your patent | $10,000-$30000+ |
| Design | Protects the “ornamental” design of a product | Prevent others from designing around your patent | <$1500 |
| Provisional Patent | Starts the protection period and allows “patent pending” | Doesn’t actually provide any true protection until patent filed | $130 for small entity, <$3000 if filing through attorney |
| International | Protects your claims in country of filing for varying terms | Patent only valid in country where filed | Varies |
If the above protections won’t work or don’t seem suitable, you can always do nothing. Well, sort of. The use of NDAs and Trade Secrets are perfectly valid options, but require you to be a bit more careful. Please speak with a lawyer more about specifics, as this can get complicated quickly.
Regardless of which avenue you pursue, I highly recommend keeping an inventor’s notebook. While the US Patent System has moved to a first to file system, which regards the first person to file a patent application (go PPA!) as the inventor, keeping a detailed and neatly organized record of your invention serves a number of functions, in addition to keeping you organized. Two primary reasons would be to look professional to a potential licensing company and have a paper trail during a patent infringement case. Failing to have good records could cost more than your patent! Again, I would suggest talking to a patent attorney or agent about the above options to get the most up to date information and discuss the best course of action. Sensing a theme?
Flight Challenge: Talk to a knowledgeable patent attorney or agent. Which 1 or 2 protections seem most pertinent to your product?
STEP 2: Takeoff
Grab the Controls
At last, the pre-flight check is over and it’s time to fly. Grab the controls, start the engine, and let’s go! Prototype time. This is really where the rubber meets the road. The research phase is over, now it’s time to make it work. The good news is that companies don’t expect you to spend millions to get there. They understand that you have a limited budget. However, it does have to work. This is where the Looks-like/Works-like prototype comes in. A Looks-like prototype shows what the product will look like when it hits store shelves, while a Works-like prototype demonstrates the functionality. Ideally, these prototypes will be the same. However, in some limited cases they may be different and still successfully land you that deal of your dreams. However, while they need to look and function as close to a final product as possible, they can be fudged a little too. Pay no attention to the man behind the curtain. If foam and spray paint get you there, great. I have built prototypes using plastic shells with Lego mechanisms. Legos worked great. Legos are a marvelous piece of Engineering. After all, think of how many millions of Legos there are in the world and they all have to fit together!
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If you don’t have the skills or equipment to complete a prototype, never fear! The same goes for your Sell Sheet. There are a wide array of companies available that can complete that prototype for you. Yes, it will cost a bit more, but it will be worth it to have a quality prototype. Furthermore, those folks can usually provide production volume quoting as well, a very valuable piece of information when approaching potential licensees. That being said, there are a number of pitfalls to avoid when looking for a quality company:
- Make sure they have been around awhile and are using well-maintained (think clean) and up to date equipment. This usually signifies that they are funded well and value quality.
- Look for previous experience working with inventors and small companies. Are they willing to get you design feedback? Do they communicate well or do you have to pull information out of them? See if you can get references or case studies and contact them. Don’t be afraid to ask questions and if you’re not comfortable with their answer, maybe it’s time to move on.
- Do they just prototype or just do high-volume production? For an early inventor, companies that prototype will be more valuable. However, if there is a path to production, your licensees will probably see value there. I would recommend avoiding companies that only do Production, as this requires more expensive manufacturing processes, longer lead times, and can be difficult to make changes.
- Visit whenever possible. Sometimes phone, email, and their website are your only options, but there is no equivalent to seeing your vendor in person.
Flight Challenge: Identify 3 potential manufacturers, sign your NDAs, and get some quotes. Does this cost match what your Users say they will pay? Don’t forget to add the retail markup.
Watch Your Instruments
How do you know your going the right way if you don’t periodically check your gauges? The best way to do that with a product is verifying your product with real customers. That’s right, take that prototype out of the house and give it to a handful of users in your target market. Show them your Sell Sheet. Do they understand it? Can they work the device? Are there any issues with the device, packaging, etc? Don’t coach them. Give them a task or two and let them play. Now is your chance to test your assumptions. At a minimum, test with 5 people, more is better, but limit it to 30. After 5, you should start to see some trends. Would they be willing to buy it? If so, for how much? If not, why not? If you need some more information on user testing, Rocket Surgery MAde Easy by Stephen Krug is a wonderful book. I highly recommend it. If everything looks good, it’s time to move on to the next step. The patent!
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Up to now, it has been up to your NDA and Trade secrets to protect your idea, but it is time to bring out the big(ger) guns, the Provisional Patent or the PPA. The PPA allows you to start the protection timeline without a huge investment. However, just because the PPA costs less, it doesn’t mean you should lower the quality. The claims are the heart of your patent, whether it is a PPA, Design, or Utility patent and they need to be good and inclusive. Patent Pending in 24 Hours is a great resource, in addition to your patent attorney. Now that your patent is in place, you have a solid prototype, and a powerful sell sheet, it’s time to land!
Flight Challenge: Read Patent Pending in 24 Hours. No, seriously.
STEP 3: Landing
Prep for Landing
Everything is in place, now who are you going to call? No, not the Ghostbusters. You need a refined list of companies where your product will fit seamlessly with their product line. This is where your market research will really pay off. What 15-20 companies are out there where your product fits like a glove? Not sort of fits. Fits exactly. Companies don’t like to take risks. You need to have a compelling case ready to go when the door opens.
In my experience, getting the door open is the hardest part. LinkedIn and other social media is your friend. Use your network. Cold Call. Don’t be a pest. Don’t send links, or attachments. Just a quick 4-5 line email stating your name, that you have a product you would like to show to someone at their company, and ask who you should talk to about it. If they are open to it, then send in your sell sheet and mention you have a prototype and production quotes ready. Once you have done that, move on to the next company on your list. After about 4-5 companies, see if you are getting any feedback. If not, review your marketing materials. Do they look professional, compelling, and easily understood? Be brutally honest with yourself. Adjust as necessary. If you’ve made adjustments and exhausted your entire list with no takers, it may be time to throw in the towel. Before you do, take a look at the Top 6 Mistakes Inventors Make. Is there something you can correct and try again?
On the other hand, if a company has taken the bait, it’s time to talk Term Sheet. This is typically a one page document outlining the main points of what is required to be in the contract. Don’t be greedy. Be patient. Be creative. This will probably take a few rounds of back and forth. Your goal should be to ensure that both parties are happy with the outcome. Have a lawyer review the term sheet and contract. If everything goes to plan, and the contract is sound, sign and date it, and start thinking about your next (million-dollar?) idea.
Conclusion
Thanks for reading the Flying Pig Flight Manual. Our 1-2-3 Flight Plan is a tried and true method for developing, protecting, and licensing your idea for profit. Remember, this is just a primer on the wonderful world of inventing. As long as you do your homework, think it through, and remember to hold high quality standards, you’ll have no problem safely landing your flying pig! It happens to inventors around the world every day. It could happen to you too!
Please feel free to contact us with any questions or comments: keir.hart@flyingpigdesignsllc.com. And of course, please comment and share if you like this article!