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Finally, A Licensing Offer – Question though…
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J Madden
jmadden99

I’ve been working on pitches for about a year now, and as time goes on my pitches have gotten better, much thanks to this forum and mentors like Roger Brown. I’ve finally had some success and have received word that a royalty agreement will be delivered to me once everyone returns after the holidays.

The company I am working with likes my idea, but feels it needs to be cleaned up from a design perspective, which I understand as I am not an engineer and my idea is mechanical in nature. They’ve indicated that they would like to include the person who redesigns the idea on the patent along with myself. Which I am fine with as well.

My question(s): Does anyone here have experience with this type of agreement? Any advice would be much appreciated. E.g. Should I have a joint ownership agreement as well as the licensing agreement and what are some of the things to watch out for.

I did a search on this forum and could not find the answers I seek, so sorry if this topic has come up and been discussed, please post a link if this is the case.

Thanks
Jeff

posted December 23, 2009 05:15 (
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Jason Garcia
citizen

First off…Congrats Jeff!

I am by far no expert, but do remember Stephen Key from InventRight having a radio broadcast that mentions something about any changes and improvements to your idea and how to deal with it.

Not sure which broadcast…probably “Contracts and More”. Here’s the link http://www.inventright.com/btr.shtml

Also give them a call, they helped me out when I was stuck and needed advice.

Good luck and let us know how it goes so we can all enjoy and learn from your experience.

Jason

posted December 23, 2009 05:43 (
)
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Mark Reyland
markreyland

Jeff,

Congratulations on your offer.

I would suggest that you consult your patent lawyer on the nuances of co-inventor status on a patent – In a nutshell that’s what they are asking for. US patent law allows the equal ownership of patent rights to EACH inventor listed on the patent. That means if they are listed, they can develop anything to do with that patent independent of you….it’s not 50/50 it’s 100/100 so once they are on it they are free to do what they like with it. That’s not always a bad thing – just be aware that’s the way patent ownership works. Of course if the patent is assigned to a company then the company, not the inventors have the rights to it.

It’s great to be in a deal – but normally unless they add material value to the design I would try to keep them off the patent. However, if you work with them, and they do add “material value” (normally in the way of function) to your design, they have a right to co-inventor status and there is little you can do about it.

In the end it’s a catch 22 – so make sure any deal you have with them is reviewed by legal counsel.

Good luck with your deal, and again – congratulations!

Mark

posted December 23, 2009 07:16 (
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Ron Komorowski
rjlinnovations

Jeff…sorry to be hard on you but sometimes that is what one needs. Why didn’t you hand them a COMPLETE mechanical working invention??? You could have consulted with PILES of engineers for FREE to get a complete invention. That is what inventors groups are for and this forum.

That is the BIG problem with people with multiple ideas…not saying you…they are not complete.

If you have the chance, offer for your engineering buddy to help complete the invention. Come here and seek a design or industrial engineer. I have a handful at all times within reach for consultation. Patent agents are also good sometimes at engineering and can help you develop the invention with tips through your patent application. Use your patent person too….as much as you can use that YOU bring in so you have control.

What happens if this guy they want you to partner up with shapes, bends, twists the concept into something that is different enough to deserve just one claim in a patent therefor maybe becoming a new invention and no longer your original idea? Should they keep you in the contract just so you are not in upset for a week or two?

Jeff, just try to be prepared as much as you can be. I have engineers and other creatives that I ALWAYS consult. It may be unavoidable with this company, they may just want it this way…and maybe this will allow you to work hands on within the company and start a WONDERFUL relationship with the company. My manufacturer the employees have become my good friends as well as the owner. They would NEVER hurt me.

Just be careful…and do as much as you can. I may have a couple engineers you may confide in that you can trust. They understand secrecy and have great respect for people developing products, they are glad to assist in a project…for one thing in return…you may some day assist them too if they need….we all work together.

I would consult an engineer, quickly get someone to do CHEAP CAD drawings for you and before you meet again, say listen…I’ve been doing some more thinking and I propose these ideas (you present cad drawings that come closer to complete engineered idea)…They then can’t claim they helped finish the idea if you presented the final touches that the engineer would have come up with….BUT…maybe you have a complex mechanical product so you cannot avoid having an engineer help you for a long period of time so rightly so, the engineer and company are entitled to a little more. GOOD LUCK!

Ron Komorowski
Inventor of Handi-Straps
www.handi-straps.com

posted December 23, 2009 07:47 (
)
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K J
kabuj

It’s important to remember that short of a formal agreement to the contrary…. EVERY co-inventor(s) of a patent has equal and separate TOTAL right of patent protection. As such, any co-inventor(s) has the right to INDEPENDENTLY make, market, license, sell promote or the like the invnetion with OR WITHOUT a co-inventor(s) consent or blessing. It is very important that you have a formal agreement(s) with your co-inventor(s) either separately or included in the licensing aggreement. Of course, it’s wise to seek legal counsel.

posted December 23, 2009 07:49 (
)
jmadden99's Avatar
J Madden
jmadden99

Thanks everyone for the taking the time to post your responses to my questions. My thinking was along the lines of what KJ suggested, which is to address the co-ownership within the licensing agreement.

Ron, Thanks for the “straight talk”, I am a firm believer in the no BS route. I will heed your advice and tap into some of my engineering contacts.

Jeff

posted December 23, 2009 09:20 (
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Roger Brown
rogerbrown
Insider Points

Jeff Congratulations!! Glad I could be of help. As I told you doing your homework defintely moves you forward. I look forward to seeing your product on the shelf next year.

http://www.rogerbrown.net

posted December 23, 2009 11:05 (
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