Taking an Invention From Idea to the Store Shelf: Building a better mousetrap may be the easy part. After that comes patent, production and marketing, and missteps along the way can be costly

August 23, 2013

Taking an Invention From Idea to the Store Shelf


EVERY once in a while, my family will toss around ideas for potential inventions. Like my son’s ultimate alarm clock, which wakes you up, tells you the weather and makes tea and toast. None of us have ever gotten past the talking phase. But a lot of other people have. Last year, the United States Patent and Trademark Office reported that 1.5 million patent applications were pending, compared with around 269,000 in 1992. And the office issued around 270,000 patents in 2012, about 160,000 more than two decades before. It’s very easy to believe that a multimillion-dollar invention is just a twist of a screwdriver away. Listen to the seductive radio and television ads that promise to help your invention fly off the shelves. Watch reality television shows like “Shark Tank,” where contestants vie to get businesses to invest in their idea.While they all portray making millions off your invention as easy, it’s not, said Mark Reyland, executive director of the United Inventors Association of America, a nonprofit education organization. “It’s a business of failure.” That doesn’t mean you won’t be the next Thomas Edison, who was granted around a thousand United States patents. But just bring a little caution and a lot of skepticism to the table.

First, do some preliminary research. Google allows you to research patents at google.com/patents. You can also look at the United States Patent and Trademark Office site to see if your crazy idea has already been patented.

If it looks as if you have a unique product, file a provisional patent application with the patent office. That costs $65 to $260, depending on how many pages your patent needs, and is far simpler to do on your own than filing a formal patent claim.

A provisional patent application is good for one year and essentially protects you from someone else claiming your invention. So you have time to develop and see if there’s a market for it before going through the more onerous full patenting process.

That’s what Micaéla Birmingham of Brooklyn did when she came up with the idea of a sun shade for her baby’s stroller, fashioned out of a dish towel in her kitchen.

“That’s the great thing about a provisional patent,” said Ms. Birmingham, an urban planner. “It gives you a chance to get it off the ground.”

Filing a patent, including the necessary research, can easily run $4,000 to $10,000 — or more, said Michael Neustel, a patent lawyer in Fargo, N.D.

Do you need a lawyer? While you can make your way through the complicated and time-consuming process yourself, the patent office strongly suggests using one.

“This is not an area where people should do it themselves,” said Jonathan Putnam, a New York patent lawyer. “You need to understand prior patents and prior inventions. You need to explain how you’ve advanced the product. You need a dedicated adviser who has only your interest at heart.”

Patent agents are another option — they don’t have a law degree, but, like a patent lawyer, must pass an exam administered by the United State Patent and Trademark Office.

Ms. Birmingham said she used a friend who was a patent lawyer, spent about $5,000 on legal and filing fees and just recently received the patent for CityShade — two years after filing. The average wait between filing and receiving a patent is 29 months, according to the patent office.

While the patent was pending, she got her Web site, citymum.com, up and running and has sold 2,500 covers at $68 each ($78 for organic cotton).

The high cost of such lawyers is one reason companies advertise free or inexpensive invention help. But those services might just end up costing you more than you planned.

Nancy Tedeschi found that out. She came up with the idea of a snap-on screw to repair eyeglasses when the earpieces come off.

She filed a provisional patent application by herself and started manufacturing SnapIt Screw. But then she discovered that “the invention was the easy part,” she said. “Marketing and getting it out is horrible.”

Ms. Tedeschi, who owned a title insurance company for 25 years, paid $10,000 to a company that promised to help get her product sold by major retailers. The company took her money but did nothing, and she received a refund only after threatening to sue.

She signed up with another company to help patent and commercialize her screw repair kit, paying a few thousand dollars. She received a binder outlining how the company planned to manufacture and market the screw, and then the company requested more money. Ms. Tedeschi declined.

Finally, she took matters in her own hands, hired a patent agent recommended by a friend and paid $250,000 to patent her product in the United States and 51 other countries.

She got her $3.88 repair kit in some stores. But it wasn’t until she read about an invention contest run by Walmart, where consumers could vote for their favorite product, that things took off.

“I had a screw costume made,” Ms. Tedeschi said, who lives in Florida and Washington State. “My assistant and I flew to New York and walked through Times Square handing out samples urging people to vote for me. I was on the morning talk shows.”

She was one of three winners — out of 5,000 contestants.

Ms. Tedeschi, who said she had earned more than $2 million in profit, laments the lack of trustworthy advice available to the neophyte.

“There’s no place for an independent inventor to go to safely get help with the innovation process,” she said. “It’s like a foreign language.”

Just to show how tough it can be to make a go of your product, InventHelp, a company that heavily advertises to would-be inventors, volunteered its results. A two-year agreement costs from $800 to $10,000, depending on how detailed the marketing plan is. Between 2010 and 2012, 141 InventHelp clients received licensing deals from retailers, said Nicole Lininger, a company spokeswoman. That’s 3 percent of 4,671 clients.

Twenty-two of those, or 0.5 percent, have made more money than they spent on InventHelp’s services.

InventHelp, like many other companies, also offers to refer clients to low-cost patent lawyers. Mr. Neustel, who also runs the Web site inventorfraud.com, said inventors ought to be wary of that offer too.

Some of those companies make a deal with their patent lawyers to charge a very low fee in exchange for referring a large volume of work, he said. “So they’re going over hundreds of applicants at a time, which can result in poorly written applications that fail.”

The patent office offers tips on spotting companies that are out to defraud inventors; one bit of advice is to ignore sales pitches from people who want money upfront. Also, be wary if the offer is for a free kit. The company will most likely then ask for money for an invention evaluation. And more money for a report. And then more money.

Harden yourself against sweet words that your idea is a “surefire hit.” It’s understandable that inventors would so easily be persuaded to send money to someone who lauds their invention, Mr. Neustel said. “It’s their baby.”

As Mr. Reyland of the United Inventors Association said, the trick is to make one invention pay for another. “Don’t rush to cash out your 401(k) to finance your creation. That’s hope wrapped in adrenaline.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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