Patent sale

[duncan drennan]

I recently received a phone call from someone who is looking to sell a patent. I'm really not too sure what the options are in this regard - are there patent brokers? Would a business broker be interested in this sort of thing?

The patent is for a cable guide system for electric mowers called ezYmo. Apparently the system works really well and people like it, he just doesn't have the finances to do the advertising that he feels is necessary to make the product successful.

Does anyone have some ideas of who he could speak to? Any thoughts on what his options might be?

[Dave A]

To me the main trick is mow away from the power source.

If it's just the marketing budget that's a problem, try Verimark. They're into this gadgety stuff.

Another option is to find someone interested in producing it and just collect the royalties.

[Marq]

Don't know much about this area but I would say that one should keep the patent, but sell the idea and a limited type rights to say a lawnmower outfit. And then as Dave says collect the royalties.

[duncan drennan]

If it's just the marketing budget that's a problem, try Verimark. They're into this gadgety stuff.

I'll suggest that, it seems like a good idea.

Another option is to find someone interested in producing it and just collect the royalties.

Don't know much about this area but I would say that one should keep the patent, but sell the idea and a limited type rights to say a lawnmower outfit. And then as Dave says collect the royalties.

The challenge is actually finding someone interested in licensing/buying the idea - where do you look for buyers? Are there people who specialise in matching up interested parties?

What I found quite interesting is that the lawnmower companies are not really interested because they are more interested developing their petrol mower sales (because they require more after sale servicing....)

[AnthonyVZ]

It is not easy to "sell" a patent. It is easier (but still difficult) to license a patent. Since he has no money, I suggest that he approaches potential licensees and negotiates a license using the free licensing tool available at http://www.ideanav.co.za/wp-content/...t_nov_2011.pdf.

[Gfacius]

I have the same problem...

I have an excellent patented product with semi paid injection mould tooling with some ex-stock as well. The problem has been the advertising of the product but the few I have sold to small outlets and one big manufacturer went extremely quickly. I have since patented another two products that complement the first product but find it extremely difficult without proper finance to get into the market as I would've liked to.

Builders Warehouse wanted my product but fell apart when I couldn't come up with a plan (finance related obviously) to market the product in there countrywide stores...

I am now considering throwing in the towel and selling everything at a loss...
An investor would be a better option but it would have to be a sufficient amount for investment to really get the product out there on a massive scale. It just seems that certain companies out there are intent on stumping me as my product is superior to what is currently out there and the fact is who am I coming to their market with a patent?

I find it a shame as people would really benefit from the product. I have honestly been let down big time and very disappointed with how business is run in this country when a nobody comes along with a patent to protect their ideas in a market that is filled with "Big Fish" who will just gobble you up if you get in their way!

Sad, very very sad...

[Greig Whitton]

I have an excellent patented product with semi paid injection mould tooling with some ex-stock as well. The problem has been the advertising of the product but the few I have sold to small outlets and one big manufacturer went extremely quickly. I have since patented another two products that complement the first product but find it extremely difficult without proper finance to get into the market as I would've liked to.

Which financing options have you considered? It sounds like the sort of venture that would be too risky for banks (without a lot of personal collateral). Depending on the financing needed to market effectively, it might be worth approaching SEDA. An alternative would be enterprise development funding.

I have honestly been let down big time and very disappointed with how business is run in this country when a nobody comes along with a patent to protect their ideas in a market that is filled with "Big Fish" who will just gobble you up if you get in their way!

What, exactly, did you expect those "big fish" to do? Welcome you with open arms while you capture their market share with a superior product? Hostile commercial competition is par for the course anywhere in the world.

[Justloadit]

This is the nature of any product/business.
The cost of development is small when you start to compare it to the cost of marketing the item, and selling it.

All businesses started small at some point in their life, and persistence is what made it successful.

With my past experience in this realm, and having some success in the past, I have also have lots of products which would be good sellers if I only marketed them, but am in a similar situation.

The secret here is to take one product, and keep at it all the time. Start selling it to the small guys, forget the big fish, in time they will come to you. Get the regular 10 and 20 orders, this will grow into the thousands.

[BusFact]

The secret here is to take one product, and keep at it all the time. Start selling it to the small guys, forget the big fish, in time they will come to you. Get the regular 10 and 20 orders, this will grow into the thousands.

Not so sure I'd call it a secret , but this is certainly my view too. Start small first. If your whole model relies on some big chain store selling your product by the thousands, then you're on thin ice.

[adrianh]

A patent means absolutely nothing to a small business. Let's say you hold a patent on a YoYo and I produce one that is slightly different....what will you do?
Let's say I have money and a lawyer that knows how to waste time, what will you then do?
Ok, let's say I send my slightly modified version of your YoYo to China and get my buddy to bring in a sheetload of them and flood the market, what will you do?

You see, it means diddly squat because it is up to the patent holder to take me to court and prove that his patent has been infringed. Let's say you win in court...I've got no money, the product was copied in China and a third party brought it in and already flooded the market.

I agree with Justloadit, start slow and don't draw too much attention to yourself. Built a customer base and a reputation and keep developing your products. You may just one day have the cash to flood the market with your superior product.

[AndyD]

I was about to point out that this is a 5 year old thread but what the hell, it's still got merit.

....
The cost of development is small when you start to compare it to the cost of marketing the item, and selling it.....

Wise words indeed but not just the cost it's the work also.

It's amazing how many guys have invented something and just assume it will market itself and the customers will arrive at his garage or workshop and form a nice orderly queue whilst he tries to keep up with the demand that's organically growing exponentially in front of his very eyes.

As you say the cost and the hard work begins only once the product itself has been developed.

[Greig Whitton]

It's amazing how many guys have invented something and just assume it will market itself and the customers will arrive at his garage or workshop and form a nice orderly queue whilst he tries to keep up with the demand that's organically growing exponentially in front of his very eyes.

The classic "Field of Dreams" fallacy. All I have to do is build it and they will ... hey, where is everybody?!

[Justloadit]

I grapple regularly with this problem.
One thing I have learn't, is that nobody wants to be involved in the birth and upbringing of any product, they simply want to be there when it reaches adulthood, invest a Rand and then want to rack in the millions in return. You know what it aint gonna happen.

Start off by getting a good pamphlet on your product, short and sweet, stop the damn waffling!
I found the best is to do a list of pros and cons before writing the contents of the pamphlet.
Look at the competition, and see what your product competes and wins and what it loses in. Take all the good points, and place it under a heading 'Features and Benefits'
Keep the info short and sweet. Include some picks and basic description.
Avoid using words like the 'best in the world', 'only thing that works' and other cliches.
Use other pamphlets as examples for the content that you must place in yours.
Get pamphlets printed, but include a section where a distributor can place his details, and avoid placing all your details on the pamphlet in which it can circumvent a distributor, you should place your details with a stamp in the section where it says distributor. At this stage you can not be the sole provider to the market, you are going to need distributors, and the worst thing is to steel customers from your distributors, they will drop you like a hot cake. They do the work and get no benefit. Have a website, which can be placed on the pamphlet, and when you get inquiries, pass it on to your distributors, don't try and take the business all to yourself. A successful product is only as good as the distribution chain. Break it, and the product dies.

Then distribute the pamphlets where ever you can, with in the market of your product. Going to a street corner and giving pamphlets to motorists does not work, and wastes your money on the printed paper. You must target the market that will use the product, and get in there.
Maybe sponsor a program at school, or local sports day, or donate to a school but ensure that your name and product is prominently displayed.
Like an old marketer that I know use to say, "you got to wear the soles of your shoes to make it happen"

Good luck, the hard work is still to come.

[BusFact]

Yip I agree. The idea, the design and production of a product are often the most straight forward part of the whole process. The leg work is in the selling. It takes huge effort compared to the other parts of the process (with a few exceptions such as building a nuclear power station).

[Gfacius]

Which financing options have you considered? It sounds like the sort of venture that would be too risky for banks (without a lot of personal collateral).

I have been to the IDC but they explained that they have recently been burned by investing with somebody who patented a pool cleaner...

The problem is that there are many pool cleaners on the market and most of them get the same job done.

My product out classes anything in the market currently and saves the user time and frustrations and I suppose at the end of the day money too.
My problem is a little different in the sense that originally when it was still a prototype I offered it to the big boys in the market and at first looked keen but when I gave them all the figures of the tooling costs and the royalty fees they pushed me away. I regret this today and wish I had done it differently.

I must be honest here. I am not one for corporate meetings and a Marketing genius or no it all type of person. I consider myself too honest and somewhat of a dreamer. I think they saw me coming a mile away!

The fact still remains that they do control the market and I agree with most of the comments in this post. I know it takes hard work and that is what we intended to do when we were first stumped by the big boys. I then decided to start smaller and supplying smaller pool shops, Super Spars etc, even Builders have come back to me again since I first posted here.

The outlining problem in my case is not so much the type of product but at the moment can only be fitted to the most popular type of pool. Builders and many other suppliers want it to fit the other 3 main types as well first. So that falls back to finance as I just don't have the money to do another 3 injection mould tools and another two injection mould tools for the other two approved patents.

The cool thing is my patents allow me to do this for the older pool types as well, but doesn't help if no one wants to get involved financially to make it happen.

I guess I should keep trying to supply he smaller market on my own to try and create a "Demand" from the end user which ultimately should put pressure on the Big Boys that could very easily go big with this as they are already in all the pool shops and most chain stores.

I am now even renewing my patents at CIPC myself as I can no longer afford the attorneys annual renewal fees. It really feels like I'm taking one step forward and two steps back. I knew it was going to be an uphill battle to get in the Market but expected too much too soon which yes, put me off somewhat.
Unless I can magically arrange something with the Big Boys I don't think its going to fly as expected. The problem is that my tooling for this product is apparently way too expensive for these guy's to take over the manufacturing. They all say that they can build it for less. If I let them then I will be upsetting my Manufacturer who has helped me or part financed me for the existing tool and I still owe him about R120K so....its all about finance. I think if I had at least R500K I would then be able to complete the three products for all pools and still have change for some marketing.

Perseverance is the key to success I suppose...