Getting Your Invention Idea In The Door Without a Patent

However, for those smaller manufacturers who are interested in seeing inventions, submitting your invention under the premise of confidentiality without them actually having to sign an agreement helps to bridge the gap and lets some progress happen, especially for those executives who are liability or written contract adverse. This tends to be the case early in a relationship, especially when they don’t know you yet, and when they are not even sure whether they want to proceed with the invention at all. 

Granted there is inherent risk associated with this method of submitting to a company, however it is my belief that the advantages of potential progress far out weigh the small chance of plagiarism.  Further, I generally revert to this procedure especially when the invention is in a small enough niche market that there is likely not justification for any type of lawsuit concerning it. Thirdly, I tend to do this with companies that I have already pre-qualified, had some experience with, and/or have talked to the executive and so forth. This is not to suggest that it is 100 percent safe to submit to a company just because I have spoken with someone in the company.  Lastly, I do not use this procedure if the premature public disclosure of the invention is an issue for either US or foreign patent filing. The inventor/client must always make the final decision as to how lenient they want to be with their submission policy.

If the potential market in the next 10 years for the invention were over $50 million in retail sales, then the inventor may want to be a little more conservative regarding their procedure for submission to a potential manufacturer.  I use this as a arbitrary figure for the sake of example.  If the total market were worth $50 million retail, then the manufacturing company that you license may gross $25 million.  If the inventor were to receive a 5 percent royalty then this would amount to $1,250,000 over a ten-year period, or $125,000 per year, minus whatever commissions you paid for negotiation of the license.

Therefore the net income to the inventor may be in the range of $100,000 per year.  When you consider that it costs a minimum of $20,000-30,000 for due diligence to get a patent opinion of scope and validity prior to even determining if you have a potential lawsuit against another company, it would be highly inefficient and not a prudent financial move to consider a lawsuit because the potential reward would not sufficiently offset the cost for bringing the lawsuit. 

As such, there has to be quite a bit at stake, such as $100’s of millions before even considering going into the litigation realm.  If litigation is not a reasonable alternative, then the next best thing is to make sure you are working with a company that is trustworthy, based on their track record and previous treatment of inventors. 

Nothing is written in stone so at some point the inventor has to take a leap of faith and hopefully companies have been pre-qualified enough that this leap is being made into the hands of a good company.  This also emphasizes the need for the pre-qualification and interviewing at places like trade shows, during in-field market research, and with interviews with executives in the company and people in the industry.