Why licensing your invention can be easier than venturing on your own


There are most of the influencing factors that inventors should consider to resolve the confusion and make a decision about whether to venture or to license their inventions. The answer depends on the interest of the inventor himself: what his strengths are, Where his passions lie, what his resources are frankly his ready to take risks. Let's take a look about venturing and licensing your invention so you can easily determine Why licensing your invention can be easier than venturing on your own

Defining licensing your invention:

License is legal permission to the owner of a certain right such as a patent or copyright (licensor) can grant permission to another party (licensee) to commercially use this invention for a specific purpose and period. In exchange for payment, the inventor would receive “royalty” which is calculated as per the percentage of the sales. Licensing allows the inventor to shift all the costs and risks to the licensee because established business and companies' brand image helps to boost the product’s chance of success. 

Advantages of licensing

  • A license allows another party to utilize your invention during a certain period. It reduces costs to acquire new technologies, without having to develop their own.
  • Licensing allows inventors will not need to incur the costs of producing, developing, marketing, packaging, or selling your invention.
  • The inventor would receive royalties, in terms of a one-time payment or periodic payments but the Profits from the invention is based on the costs and risks that it is undertaking
  • Licensing your invention can be used to access opportunities of new markets that are not easily accessible. 

Disadvantages of licensing:

  • You may lose control over your product, including promotion, packaging, and selling. The risk of poor quality management may damage your brand or product reputation. 
  • It might be possible that you will lose your expected royalty payment because most of the licensee fails to effectively commercialize and sell your invention in the market. 
  • The risk of poor strategy execution may cause damage to your product sale or success it affects your portion of the sales profits.


Defining venturing your invention:

Venturing your invention means building your own business. Most of the inventors get excited to run their own successful and profitable venture but this process requires the inventor to have a good amount of capital and a well strategic plan on how to develop, manufacture and market their invention. This means that you have to manage and take responsibility for all aspects of a product-based business. Manufacturing, packaging, importing, inventory management, shipping, warehousing, marketing, distribution, and sales to retail stores online and other channels.

Advantages of manufacturing:

  • Since royalties tend to be quite limited, some inventors will be tempted to take control of manufacturing and marketing an invention. 
  • Inventors may also enjoy the process of running a profitable business, and they may appreciate the ability to retain control over their creation. 
  • Running a successful venture is such a time-consuming process so the inventor has limited time for new inventions but when your invention proves profitable, then the investor can easily make more money.

Disadvantages of manufacturing:

  • However, building your own business involves substantial risks and investment requirements.
  • It might be possible that your invention fails to grab the opportunities of a competitive market
  • Manufacturing your invention requires hard work for making your invention a successful venture.
  • It’s quite difficult to find trustable and skilled people to work with your venture.

Choosing between licensing and manufacturing an invention:

Some extremely complicated inventions need substantial resources to manufacture and market them effectively. This kind of invention may prefer to license or assign the invention, rather than assuming the costs of manufacturing and marketing it. Because licensing your invention can be easier than venturing on your own. This process facilitates them to focus on improving their inventions or creating experiments for new inventions. 



Comments

Post a Comment

Popular posts from this blog

How to write a patent application in 9 steps?

One of the most basic things in a patent agent life is how to draft a patent application. This is also very useful for investors or whosoever is likely to have invention as well as in every field. Write a quality content patent application that describes the invention clearly. Writing an application for patent is not as easy as people think. You need to focus on every detail of your invention which describes the invention at its full. The patent process for obtaining protection involves different steps we have summed the whole process in just 9 steps: 1.  Title of the Invention: The title of the invention should be on the top of the page and should have a brief and accurate description of your invention. You should keep in mind while writing the brief that does not include “a” “an” and “the” and also make sure not to use words like “new”, “improved”, because these words are not acceptable by the USPTO. 2. Acknowledge to related applications: For applications that hav...
Read more

Detail Guide to Intellectual Property Protection

The probability of acquiring a patent for invention you’ve created is an interesting one. However, for many inventors, the method might also seem complicated, and maybe even scaring. If you’re doubtful of what steps you should take to shield your work, there is a process which will help you and is easy to understand. Discover what kind of intellectual property (IP) protection you require There are different types of IP protection which includes patents, trademarks, copyrights and trade secrets. So it’s vital to understand what type(s) of intellectual property protection the inventor must apply to their invention before moving ahead. Assess if your invention is patentable. An invention must be unique, non-obvious and beneficial to be qualified to receive patent protection. A patent search is an indispensable step in managing patentability, and the inventor can get started using the United States Patent and Trademark Office (USPTO) website. Ascertain what type of inte...
Read more

Strategies to search a patent- Save your time!

The USPTO website designs out a 7-step guide for running a preparatory patent search using their tools and tools of their European partner, the EPO. Their recommended program directs on patent classification searches. Their guidance helps you brainstorm sessions to search within USPTO website to manage your proposed patents potential Cooperative Patent Classification and then guide you in the use of multiple databases to search a patent and patent applications that force legally cover your idea. 7 Step Strategy to Search a Patent Step 1: Begin by brainstorming precise terms that explain your invention. Work behind the problem it resolves and how it’s done. Try to create a record of terms, other people would practice describing their mission and composition. Step 2: Later Use these terms to get some related Cooperative Patent Classification patents. If you enter “CPC Scheme [plus keywords(s) describing invention]” into the search box you should work to find relevant invention...
Read more