Welcome to our inventing FAQs.
Here you can find answers to the very basic questions about inventing and bringing your ideas to market.
Click a question below to see the answer.
Do I need a signed NDA before I show my idea to someone?
The subject of nondisclosure agreements is unfortunately complicated. It’s not immediately clear that an NDA will guarantee the protection of your product idea in the long run.
We recommend that you file a provisional patent application before you show your product to anyone. Don’t rely on an NDA, because publicly disclosing your invention prior to securing the protection of a patent pending status can hurt your chances of receiving a patent and you run the risk of having to prove your ownership in court.
An NDA can be very helpful when you have an idea that cannot be protected with traditional intellectual property or if you have trade secrets.
Most vendors helping with your projects will sign an NDA. Please make sure if you’re working with any contract manufacturer, vendor, or designer, that your NDA includes work for hire language. This language will make sure there isn’t any coownership of new developments. It’s better to have an attorney draw it up than to try to modify documents that you find on the Internet, as you need to make sure that the NDA truly covers your innovation and your needs.
Most potential licensees will not sign your NDA. They will want you to sign theirs. In that event, we strongly suggest you have an attorney review the document. Never sign an agreement before reading it. Sometimes, a document will be titled “nondisclosure agreement” or “confidentiality agreement”, but the actual terms of the contract establish the opposite.
What is an NDA?
NDA stands for Non-Disclosure Agreement. It is also known as a Confidentially Agreement (CA), Confidential Disclosure Agreement (CDA), or Proprietary Information agreement (PIA)
These agreements are legal contracts between at least two parties who want to share confidential material, knowledge, or information with one another, but wish to restrict access to and by third parties.
This type of contract usually specifies the information to be guarded and the conditions under which the parties agree not to disclose it. An NDA creates a confidential relationship between the parties to protect confidential and proprietary information, which includes non-public business information and trade secrets.
There are three general types of NDA:
- Unilateral: sometimes referred to as a one-way NDA, this involves two parties, where only one party, i.e. the disclosing party, anticipates disclosing certain information to the other party, the receiving party, and requires that the information be protected from further disclosure.
- Bilateral: sometimes referred to as a mutual NDA or a two way NDA, this involves two parties where both parties anticipate disclosing information to one another that each intends to protect from further disclosure.
- Multilateral: this involves three or more parties, where at least one of the parties anticipates disclosing information to the other parties and requires that the information be protected from further disclosure by everyone else.
We recommend that you file the PPA before you share your product idea with anyone.
I found a product that’s similar to my idea, what should I do now?
Actually finding a similar product to yours can be a good thing. It means there is a market for this type of idea. But you must determine if you have a point difference and that is marketable and something that can potentially he protected.
When you discover similar prior art, you can design around the patent and use what you find to write yours differently, especially if the patent isn’t very strong. You will need to narrow down how your innovation differs and why it deserves to be patented.
On the other hand, you can contact the inventor to try to license the idea from him or her, if the patent hasn’t expired or you could just walk away right then and there.
We can almost guarantee you will find a similar product idea. Good ideas don’t emerge out of thin air. They improve upon what’s come before them. If you have any doubts we highly recommend working with a good patent attorney to determine what your next steps should be.
What can I do to determine if I have a marketable idea?
The way inventors feel about an idea has a habit of overriding critical analysis. Many inventors charge ahead blindly, not really understanding what makes some ideas more challenging to market than others. Simple ideas take less time, money, and work to bring to market. So it’s no surprise more often than not, simple ideas are the most successful ideas.
Is your new product idea worth investing in? Take the following into consideration to help you make an evaluation. If it passes, move forward with it. But if it doesn’t, you might be better off abandoning or seriously altering it. Ask yourself the following
- Does your idea solve a problem? Can you identify the problem your idea solves in a sentence? Can you describe how your idea will solve that problem? Who will your solution help? How many people could it help? Will these people pay to have the problem solved? Not all product innovations solve problems, but many of them do. Maybe you’ve thought up a unique, interesting idea. But is it really relevant? If you cannot concisely identify how your idea is useful or beneficial, there’s a good chance it might not be very compelling. Consumers have an abundance of choices. Why would someone choose your product idea over another?
- Is manufacturing your idea going to be complicated or straightforward? Remember, the first two questions a potential licensee is going to ask you are, “How can we make it?” and “For how much?” First and foremost, does the technology needed to manufacture your idea exist today? If new technology is needed to manufacture your idea, potential licensees/investors are going to be turned off by that. So, take a look around. Do products similar to your idea exist? If so, that’s a good sign. If your idea is more technical, you’ll need to do more research.
- Does your idea have a wow factor? How is your concept going to stick out? Think about the type of person who would buy it in a store. What are they going to be intrigued by? What about it sizzles?
- Is your idea easily understood? When you try explaining your idea to other people, do they get it? Ideas that are too new, different, or complicated may require educating consumers about how they work and why they’re beneficial. Because education campaigns are so expensive, ideas like these are risky.
- Does it have mass appeal or is it a niche market idea (which appeals only to a very small and specific group of people)? Who buys similar product and what do they pay for them? Is there enough demand for it to be mass produced?
- Is it patentable? Some industries care about patents. Others don’t. Benefits sell ideas, not patents. In most cases, just the perception that an idea is patentable is enough to get you where you need to be, but you should still be aware of the landscape before talking to investors or to potential licensees. We also recommend looking on the Internet and visiting stores for similar products. Before you start is very important to study the marketplace. By looking at similar products you can determine if your product idea has a point difference worth pursuing and get an idea for its potential target audience and price.
How important is doing a patent search? Can I do this myself?
Doing a patent search is extremely important before you spend time, energy, and money trying to commercialize your product idea. You have to gain an understanding the patent landscape before you begin. You might find a similar idea/invention, at which point you can decide to redesign, find a work-around, or abandon your project. With a little time and education, you can actually do this on your own, but you may also hire professional patents searching firms to provide results.
Patent searches are more of an art than a science. It’s nearly impossible to find all prior art relating to your idea/invention, because there is too much of it. Over time, you develop a sense for what’s important. You can find information at the USPTO website on how you can become proficient in doing this.
What is a provisional patent application (PPA)?
Provisional patent applications (PPAs) were introduced into USPTO practice in 1994. as a means to make it easier for independent inventors and small companies to obtain protection for their ideas, enabling them to market their ideas more securely without large capital expenditures. Please note a PPA is not a patent, and does not guarantee or even result in a patent. A PPA it’s just an application which gives you the priority filing date for the protection of your idea if a patent is granted. It also allows you to use a “patent pending” mark on any presentation or communication related to your idea, or even on a product that may come as a result of it.
Several countries including China, Japan, the United Kingdom, Australia, and the United States offer provisional patent applications. In the United States, you can only file a PPA for a utility patent. The PPA is in force for 12 months, after which you can either let it expire or file for a non-provisional applicatrion. The USPTO allows the inventor with a PPA to obtain a priority date, a patent pending designation, and the corresponding filing number. Filing a PPA is much simpler, faster, and less expensive than filing a regular non-provisional patent application. Correspondingly, it offers less protection – up to one year, instead of 20.
Filing the PPA has several advantages over filing a non-provisional patent application:
- The filing fee is only $65 – if you make less than a $150,000 per year and you have less than 10 approved patents so you qualify as a micro entity.
- The application is simple enough that you can do it without an attorney (although you can certainly have one help you if you want).
- A PPA does it require the formal documentation that a regular non-provisional application does. You can submit simple drawings and even photographs of a rough mark up.
- You have the same legal protection as you would under a regular patent application.
- It is in force for a period of 12 months, which should be plenty of time to design and refine your idea, find a manufacturer, and test the market.
- You can include the “patent pending” notice on documents, drawings; sell sheets, and prototypes you present to potential manufactures, vendors, and customers.
- As long as the patent is pending, no potential competitor can access your application. In fact, the USPTO does not even read your PPA unless you either file a regular non-provisional application or someone disputes your rights to the idea.
- You can file multiple provisional patent applications as you work out and design within the 12 month period of time, before consolidating them all into a single non-provisional patent application.
- A PPA establishes the official patent filing date for your idea. Should you choose to file a regular non-provisional patent application at the end of the 12 month period, the filing date of your PPA becomes the filing date of your regular patent. Assuming your regular patent gets issued, you have effectively extended the life of your ownership from 20 years to 21!
Here’s a short and simple checklist what you will need to have prepared for filing a provisional patent application.
- Drawings and/or sketches and/or chart of your idea.
- Description of your invention.
- Provisional application form PTO/SB/16
When your application is ready, it can be easily and quickly filed online at the USPTO website, in which case you will need to use your credit card to make pay the filing fee.
You may also print out your documents, including the filing fee in the form of a certified check or money order made out to the director of the US patent and trademark office. Then you may mail everything to the following address:
Commissioner for patents,
PO Box 1450.
Alexandra, VA. 22313-1450.
Detailed information about preparing and submitting provisional patent applications may be obtained at the USPTO website.
Here are a few pitfalls to watch out for when filing a provisional patent application:
- If sketches or drawings do not show your idea clearly and if the written description is not detailed and precise enough, it may be hard or impossible to defend ownership of the idea, if it ever comes to litigation with a competitor in court.
- USPTO regulations state that if a PPA is not converted into a non-provisional application before expiration of the 12 month period, chances of patenting this idea maybe lost altogether.
Why would a company pay me for my idea? Wouldn’t companies just steal ideas from inventors?
In today’s world companies have to innovate to stay competitive, so they’re always looking for good ideas and it is in their interest to be in good standing with inventors.
I’m sure you’ve heard stories about company stealing ideas, and yes! It has happened. But this is not the norm. That being said, it’s very important to do your homework on any company that you are working with to make sure they are inventor-friendly. Here are some things you can do to proect yourself from unscrupulous actors:
- Find companies that are willing to accept outside submissions.
- When reaching out to them, make sure you ask about their process to find out how do they work with outside product developers/inventors. Clear procedures are usually a good sign.
- Get recommendations from other inventors about the companies that are inventor-friendly.
- Google anyone’s name then complaints or lawsuits. It’s up to you to do your homework. There will be many situations where companies will have worked on a project similar to yours.
We recommend finding good companies and submitting effective marketing materials that show the benefits of your idea. If they ask for additional information, then that would be a good time to ask for an NDA. Typically they will not sign yours, so you’ll need to review and sign theirs. Make sure to read all the fine print, and if there is something you don’t understand, have a patent attorney look at it.
What is a patent?
A patent is a legal property right granted to the person or entity who designs, invents, or cultivates a new and original product, process, technology, or service, any of which can be assigned a monetary value. A patent holder is granted the ability to make, sell, and use the idea for a specified period of time, while excluding others from doing so. During that time, the patent holder may sell (assign) the right to another person or entity so they can manufacture, sell, or use the idea.
Patents are issued by a governing agency of the country in which the patent application is filed, and they are enforceable only within the country. In the United States patents for inventions that meet statutory criteria are granted by the United States Patent and Trademark Office (USPTO). The patent system is designed to encourage inventions that are unique and useful to society. Congress was given the power to grant patents in the constitution, and the federal statutes and rules govern Patents.
The USPTO issues three types of patents:
- Design patent. This type of patent can be obtained for a reproducible change in the decorative appearance, configuration, ornamental design, or shape of a utilitarian item. Design patents are typically less expensive than utility patents and they are issued much faster.
- Utility patents. Any useful apparatus, machine, manufactured item, or composition of matter can be covered by a utility patent. The ideas of most inventors fall under this category. Utility patents can also be granted for software programs and mathematical algorithms used in software programs (abstract mechanical algorithms cannot be patented).
- Plant patents. Any new species of plant which can be produced sexually (with seeds) or asexually (without seeds) is eligible for protection under this type of patent.
Some ideas might benefit from more than one type of patent, usually both utility patent and a design patent.
Do I need a patent?
Sometimes you do and sometimes you don’t. There’s no cookie cutter answer.
Having intellectual property can definitely have an advantage. Products that are patented have a higher perceived value in the marketplace, because having a patent can stop –or at least discourage– others from copying your product.
Filing a non-provisional patent application can cost anywhere between $10,000 and $25,000. We highly recommend that you to investigate the possibility of filing a provisional patent application which is easier to do and more affordable. Filing a provisional patent application can cost $65-$265. You can file it and draft it yourself, hire a patent attorney, or hire a patent agent.
A PPA does not require a claims section, which greatly simplifies the process. Please note that if you plan on filing internationally, typically one claim will be required, and we highly recommend having professional help for any claim construction. A provisional patent application gives you one year to test the market, for the duration of which you have “patent pending” status. During that that time, you can determine if have a marketable product before spending large amounts money on a non-provisional patent application. Form our experience, most licensing agreements only require that you have a well written provisional patent application.
What’s required to license a product idea?
In most situations all you need is a good sell sheet explaining the benefits of your product, including a photograph, picture or drawing of your idea, and a few features along with your contact information.
In today’s internet age a one minute video is also a great sales tool. Your one minute video should dedicate 15 seconds to stating the problem and then 45 seconds explaining how your product offers a solution. (Please see examples of sell sheets and one minute video).
Typically, companies want to see you as the owner of your idea and they may require you to have filed at least a Provisional Patent Application. Some industries may need to see that you have filed a copyright or trademark that has value as well. Doubtless, there will be companies that require an approved patent as prerequisite to review your product submission.
After they review your sell sheet or video, if they are interested they will most likely ask to see a prototype, as well as documentation of any IP protection you have. At this point we recommend that you ask to sign an NDA. In most situations, you will also be asked to sign one drafted by the company.
Please read any document/contract/NDA to fully understand what you’re committing yourself too. It’s always best to have a good patent attorney review all legally binding documents before affixing your signature to them.
How do I find companies that are looking for ideas to license?
Today, many companies have embraced “open innovation.” There’s simply no reason for them not to. Companies that want to stay competitive understand that great ideas can come from anywhere—and anyone. They’ve realized they can’t hire every creative person out there. Open innovation is thriving worldwide because it makes good business sense: At the same time that companies are able to lower their internal R&D costs, they increase their chances of finding that next great idea. As a result, some companies have established procedures in place for reviewing outside product submissions. Submitting your ideas to these companies should be a straightforward experience. Other companies may have less experience reviewing outside product submissions, but that doesn’t mean they aren’t open to it. You’ll find them in all industries, but especially toys, hardware, kitchen and household, novelty gifts, back-to-school, music, as seen on TV, among others.
These companies want and need your product idea submissions and finding them is fairly straightforward. Visit stores to examine the products being sold there. Find the aisle where your product idea would be sold. What companies are producing these products? These are your potential licensees. You can use the internet in the same way. But make sure to reach out to them and ask them about their policies regarding outside products omissions. Always read the fine print. There will be many companies that have not really embraced open innovation. That’s perfectly fine, because you can just go to the ones which have. You only need to do your homework on any company you work with: Type in their names into the google search bar, and then type in “complaints” to learn more.
What is licensing?
There are different kinds of licenses. Essentially, and especially for the purposes of inventors like yourself, licensing is the renting of an idea. When you license your idea out, you give a company with established resources the privilege of bringing your intellectual property to market in exchange for compensation to you in the form of royalties. You’re temporarily yielding to the company the rights to sell, market, and manufacture your idea for a given time and in a certain territory, usually in exchange for a percentage of the price. The terms under which you extend this privilege differ, because no two licensing agreements are the same. Royalty rates are negotiable, but generally fall between three (3) and ten (10) percent, and they are paid out per unit sold each quarter. If you consider the great volumes that large companies are capable of supplying, the royalties can add up fast.
Essentially, when you choose to license and idea, you tap into the boundless finances and massive infrastructure that large companies have. You get them to manufacture, sell, market, and –best of all–distribute your innovation. In other words, if they supply 20,000 stores, then your product can be in 20,000 stores! More and more inventors are looking at licensing as the best way to commercialize their product ideas, while minimizing the financial risk and the amount of work it takes.
What to do when you have a new idea for a product or service and you want to take it to market?
The first step is to educate yourself. And we highly recommend you find your local inventors group. Your local inventors group typically holds meetings once a month to help educate you to the process of commercializing your ideas. Please take a look at our map to find the nearest one to you.
But for now take a deep breath. It seems extremely daunting but it can’t be done. Historically what is been taught is that in order to launch a product or service you need to start a business. It’s called venturing. It definitely has its pros and cons which we will discuss later. The other option is to license your product or service for royalties. These two methods are completely different from one another and require a different set of skills, time, experience and investment.
- Manufacturing and marketing your own invention: This typically means that you’re starting a business. You will have to design, prototype, manufacture, warehouse, fund, market, distribute, and invoice your new product or service. You will have to wear many different hats. Most individuals don’t realize the amount of money, time, and experience it takes to successfully run a business. We will provide some handy links to get you started. We highly recommend that you take the time to educate yourself on the total process which includes writing a business plan and establishing a supply chain. It’s an extremely exciting and worthwhile goal, but at the same time there are many risks associated with bringing a product to market on your own. Pro tip: Having to purchase your order or showing demand from customers is a great way to eliminate the unknown in regards…will people purchase it. You will hear many success stories but there’s also many Failures were people end up having inventory in their home office or garage they cannot sell.
- Licensing your idea for royalties: to license your idea out is to give a company the rights to sell market and manufacture your product idea or service for an established period of time. The advantage is that they do all the heavy lifting in order to market and distribute wour product. Usually, this requires a good idea that has “perceived ownership” in the form of a utility patent, a design patent, a provisional patent application, a trademark, or a copyright; It could even include a trade secret. There’s very little financial risk involved, but in many situations you will need to build a prototype and generate good marketing materials explaining the benefit of your product or service. Licensing is becoming extremely popular, given that companies are increasingly accepting ideas from independent product developers and inventors. This model is called open innovation.