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. 



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