This post is part of a series of posts entitled A Guide To Intellectual Property Protection. For a comprehensive list of articles contained in this series, click here.
Minn. Stat. § 325A.04 requires invention marketing services soliciting businesses in Minnesota to disclose how many individuals who have come to that service for help have made money on the invention after contracting for the service. This number is usually quite small, such as 1 out of 500 or 1,000 people. If the service refuses to provide you with this information or such information seems to be too good to be true, be skeptical and demand proof of their claims.
Among other states, California has a related provision (California Business and Professional Code 22370) which prohibits the activities of most typical invention marketing organizations.
The services typically offered by invention marketing services include patentability searches, patent application drafting and prosecution, direct mailings to businesses that might be interested in selling your invention, review of trade directories and census documents to determine the potential market for your invention, presenting a written description of your invention at trade shows, and furnishing their client with the names of potential manufacturers. Generally, patentability searches and patent applications prepared by the services tend to be of reasonable quality. However, the value of the other services offered is questionable. It is strongly recommended that an inventor contemplating using such services carefully review what he or she is getting for his or her investment, as well as the usefulness of the information and services received.
A better alternative to employing invention marketing services (and, in many cases, to immediately filing a patent application) is for the inventor to utilize the money that would have been spent on those services to directly contact and meet with potential marketers of the invention. In practice, this is the most successful strategy for independent inventors with limited financial resources. A patent may bring economic benefit to the patent owner by the outright sale of the patent, licensing the patent to others, or by commercially exploiting the patented invention itself. In order for the independent inventor to attempt either the sale or licensing of the patent, he or she must first identify the potential buyers/licensees. Once a potential buyer is located, one must then place a value on the patent. If the product covered by the patent has not yet been commercially produced, it may be quite difficult to determine accurately the value of the patent. Therefore, the patent owner may wish to license the patent and obtain a royalty on the future commercial exploitation of the patent. The specific terms of each individual license would have to be negotiated with the licensee. A typical license agreement might include a lump sum payment to be made immediately upon the licensing of the patent, as well as a royalty to be paid for each patented product produced. A license may be exclusive, granting all the patent rights to a single licensee. Alternatively, a license may be nonexclusive, so that the patent owner may license several different licensees. The length of the license can be for any term agreeable between the parties, not to exceed the life of the patent.