Manufacturing or licensing out the patent?

Licensing

Article written by : Pete Canalichio

An idea struck me regarding a heavy duty appliance which works well to replace a similar appliance but is something that has never been seen before. It made me ponder as to what would be a better strategy – manufacturing or licensing out the patent? In order to seek an appropriate answer, it is pertinent to do some introspection. The question arises – What is your calling or put in other words, what really drives your excitement? Does the answer lie in creating innovative ways, making the world better or do you prefer implementing great ideas? Having answered this question will definitely take you much closer to the strategy you should choose. Explaining it further, it can be said that when we work on things that we are passionate about, we ‘generate’ energy and having to complete tasks that we would prefer not to do ‘consumes’ energy. Now, the question that arises is that which of the two strategies you have inquired about excites you the most? It must be understood that if you draw your energy from implementing great ideas, you should pursue that strategy. On the other hand, if you would prefer to continue creating great ideas, you should consider selling or licensing your technology.

I must share with you that we get many solicitations from inventors asking us if we will help them license their technology. We customarily introduce them to our 8 step proprietary licensing process designed to maximize the commercialization of their technology. The check points are as follows – If your technology is robust; if it can be protected by one or more patents; and if it is a simple, yet elegant solution, then there likely will be at least one and possibly several businesses who would like to license the technology. Careful selection of businesses whose products are best suited to license your technology implies that they will want to invest in your technology, as it enhances their products. The situation puts you in a position of strength and vetting those businesses ensures that they possess the resources needed to commercialize your technology. When this happens, it further implies the pie getting bigger and everyone involved winning – the inventor licensing the technology, the manufacturer incorporating the technology and the consumers whose lives are improved by the new and better products in the market.

On several occasions, we have come across inquiring inventors commenting that for what we ask in compensation, they could build their own prototype! While this may hold true, building a prototype is only one small but important step in a long process for commercializing an invention.

Not just these points but there are many more steps needed to commercialize an invention than having a prototype wherein the first step is preparing a comprehensive business plan and the second is gaining access to resources in order to execute the plan.

Hope this helps!

The author is Pete Canalichio, Founder, Licensing Brands, Inc.