If anyone is going to get into DRTV on their own, I really hope that you talk directly with at least one other inventor or entrepenuer that was succesful working with the DRTM company. You’ll probably find that to be very easy if you use their referal list. You’ll probably find it very difficult to find one on your own. Those guys are great salespeople when it comes to selling you, not so great at selling product. If anyone is going down that path, shoot me an email, I’ll tell you what I experienced.

Scott

You guys are getting into the weeds here – the premise is simple. If you license a product to a manufacturer it’s likely going to be exclusive. If for some reason it’s not, you should think really hard about the people you are doing business with because they are not very good business people.

That being said, if it isn’t an exclusive contract then sure, you have the right to continue selling the product outside of that contract. However, you are unlikely to find another company that will take the product because they simply won’t want to compete with DR. So that leaves you developing it and taking it to market – bad idea – you could never get the sales traction needed to make your money back. It sounds good, but the math never works out.

As for working with DR? ….it’s a rough neighborhood to play in. You need to make sure you know what you are doing when you sign a deal. A great example of that is “Test Minimums” most inventors don’t know that you can put a test minimum in your contract (normally between $10,000 and $25,000) to cover the opportunity loss you experience in the 6 months the company will have control during development and testing. The reason you do that is because as an exclusive contract you have to walk away from potentially better offers during that test period. If you don’t know these things the DR company is never going to tell you…..

There are many facets of DR – and lately there is no shortage of companies claiming to be “DR Companies” the fact is they are companies that provide services to the DR industry, but not companies who can actually get a product to market on their own. In reality there are only about 10 companies in the DR space that can get a product to market – and out of those 10, 75% of the market is controlled by about 4 companies.

You have to know who you are dealing with, and what they can actually do…don’t be afraid to ask the hard questions, and if they don’t want to answer then walk away.

Mark

I agree with Roger; helping the DRTV company promote their sales for your product would definitely be the easiest route to take!

However, Karen you also bring up some interesting questions; let’s pretend you are willing to risk some $$$ from your royalty checks and outsource manufacturing and sell into different distribution channels than your DRTV company does. Obviously, there is more risk this way, but also greater reward.

If you see that your DRTV company is doing well with “StackMates” you might not need to risk much in advertising $$$ yourself, and at the same time keep 100% of the profits from sales coming from your own distribution channels plus keep receiving the 2% – 5% royalty from your DRTV company.

a) I’m guessing you would have to make “StackMates” (molds/materials) the same exact way your DRTV company does; right?

b) Also, you should still be able to use the same “StackMates” name; right?

Thank you,

olimits7

You would want to make it differently so that it does not impede the current model and also to give it your own flair. On the subject of media, look for your local PBS station, or local cable channel, local radio shows (like we have a automotive question answer show locally) they all need material to fill time slots. It is free and they rerun those shows a lot as fillers when needed.
Don’t forget your local papers. They love to promote local talent. You can also go to the stores selling them in your area and contact the manager about doing a little meet the Inventor type promo. It helps bring in more customers to them and helps promote your product. This is somthing the local paper would do a piece on.
There are all sorts of ways of getting media attention that does not cost money. Look for local or nearby cities that have kitchen speciallty shops and do the same promo meet and greet at those locations. Contact local colleges and speak to the business classes on bringing a product to market/licensing, etc. I have been contacted by several colleges in my state to speak to their classes.
You were creative enough to come up with this idea, use that same out of the box thinking on marketing.

http://www.rogerbrown.net

100% agree Roger and that’s what I’m doing…social media promotion, cards/emails to friends…all I can in the little spare time I have to support the product under the name Stack Mates. I would never have had the capital myself for molds/distribution/advertising so I’m happy and hoping they succeed in a big way! Their success would be my success and praying for retail.

However, just to know the “rules”..if I or someone else were to make it/manufacturer it (since it is non-exclusive license)…could it be made the same exact way (even go as far as using the same tooling) or you would need to manufacture somehow differently? Are there any rules here?

A lot depends on your contract with the DRTV. Most of those companies start out on TV and once they see the reaction to it go to retail sales. So your Stackmates could end up in stores through that avenue. Look at Snuggies. They are now in department stores everywhere.
Depending on the sales through the DRTV it might be in your best interest to ride that out and look for avenues to help promote their sales versus sinking tons of money into making a knockoff of your own product.

http://www.rogerbrown.net

To piggy back on the question, I guess however you would need to do everything again on your own right…
So to take StackMates as an example. It’s licensed to a DRTV company (non-exclusive agreement) if I now wanted to make on my own I would need to make my own molds, trademark my own product name, make my own marketing materials etc., correct?

Part 2: Assuming the answer is yes, which I’m 99.9% sure it is…would my molds/product need to made differently than StackMates? Or since I’m the patent owner could I make the exact same product under a different name? Same dimensions, same molds, etc.?

PS I personally wouldn’t do this because I think it hurts the DRTV companies efforts, but good to know if the tests don’t do well and the DRTV company pulls out of contract…How different, if at all, would another version need to be?

Good Question NJ. Thanks for helping Roger.

Yes,can license your product to a company and then start your own business based on that product, but you need to be very careful how you structure your license agreement to make it work. You need to have a non-exclusive with the company and make sure the contract does not have a non-compete clause in it. You can even have an exclusive with a company and still start your own business selling the product as long as the exclusive states that the company has exclusive rights to a certain market and you are going to sell your product in a different noncompeting market.
For example lets say you license your product exclusively to a company that deals soley with the toy industry and only sells to businesses that sell toys. You start your business and you are only selling the same product to businesses that sells only golfing equipment. Neither business competes with the others consumer base.
Another example would be the company sells your product to the consumer only and you start your business selling only to the military. Those would be noncompeting industries.
It can be done you just need to be specific in your agreements and each party has to agree to those restrictions.

http://www.rogerbrown.net

Unless you have manufacturing experience I wouldn’t get into that. Licensees might be distributors and they seek out manufacturers. Manufacturing is far from glamorous and to make 50% profit means that you are efficient at what you’re doing. Just getting set up in tooling can cost a fortune if you need to source that from other manufacturers.

oh and also if they pay for NPA for you, you are still the inventor, the owner unless you ASSIGN your patent to them. Again I am not a lawyer and whatever I know if just from me reading stuff.

Sorry if this is a repeat – I didn’t have time to read all the response (i have to run after my little toddler :D).

If I understand this correctly, and my knowledge is theoretical – from book, etc… A licensing agreement can be exclusive or non-exclusive. A party who you sign exclusive agreement with is the only party who can make your product/idea. If your licensing agreement is non-exclusive, then I don’t see why you cannot also make a product yourself.

I hope this help and please others correct me if I am wrong. Thanks!

Thanks for the reply, Jayme…

I found this article that talks about “co-inventors” in more detail…I found the article very interesting!

http://www.inventionconvention.com/ncio/special...

olimits7

Even if they tweek your idea slightly, they will be listed as co inventors and then have rights. Paying fees does not grant rights.

Shawn – Yes, that’s a good way to look at it too…I have some ideas that I feel the same way about and others that I don’t mind sharing!

Jayme – Sorry, I should have been more specific…

What I meant to say, if the manufacturer/invention submission company is interested in my product idea would they pay for the “non-provisional” to get my “provisional patent application” issued as a patent?

And if they do pay for the patent (non-provisional) would I still retain the rights to the patent since I filed for the “provisional patent application” first, or would the rights then get transferred to the manufacturer/invention submission company since they paid for it?

Thank you,

olimits7

Your provisional patent application will never issue, either it will expire or you will file a non provisional that claims benefit from the provisional filing date.

No problem. That is why most of us are here we have great ideas and no money.
Manufacuring an idea yourself typically yeilds around 50% profit, but you incure all the risk. Licensing will get you around 2-7% but the company you license to takes the risk. I have several ideas that are close to my heart that I would not share. This site allows you to come up with ideas that your not married to that might someday afford you the opportunity to pursue your own ideas. Good luck my friend.

Hi Jayme,

If I have “provisional patent application” filed, and if then a manufacturer is interested in my product idea and they pay for the patent to be “issued”; would the manufacturer still own the rights to the patent even if I had a “provisional patent application” filed?

Thank you,

olimits7

Hi Shawn,
Hi Shawn,

Thank you for your quick reply!

Yes, that is the main question…either “invest in my idea myself” or “find someone else who believes enough in my idea”! Lately, I’ve been leaning towards “finding someone who believes enough in my idea”, but I don’t think I will ever find anyone who is as passionate in my idea as I am. :-)

However, I thought I read online that if another company has a different set of distribution channels that they use; that I might be able to license to multiple companies instead of just one. I’ll have to look into this more…

Thank you,

olimits7

If there is a patent issued and you are trying to license it, you can do a non exclusive license or a covenant not to sue. From your previous post it sounded like you were trying to contact manufacturers because you could not afford to get a patent on your own. If you work with a manufacturer to further develop the idea they will likely require an assignment. In this case you will be a named inventor but the company would own the patent itself if one were to issue. Also, keep in mind that anyone who contributes to the product development will be named as a co-inventor and can make any agreement without the consent of the other inventors.

Hey New Jersey,
I think it would be very difficult to find a company that would agree to those terms. The reason people typically licence products is because they do not have the capital to produce the product themselves. It goes back to the old adage it takes money to make money. The only instance I can think of where you manufacture and licence at the same time is when you receive a patent and there are “knock offs” that you decide to licence the idea to rather than sue them for infringement. Sadly, it usually comes down to investing in the idea yourself or finding someone else who believes enough in your idea to invest in it, they usually they want a significant cut for taking the risk.