May 24, 1998, Sunday
EARNING IT; A Five-Year Journey to a Better Mousetrap
By JOHN MILWARD
JERRY FREE, an installer of drywall, has lately been leading a crew in putting 230,000 square feet of it into a new hotel in Fishkill, N.Y. It is a bone-tiring task by any measure, but Mr. Free has the advantage of using the Speed Bead, a device for joining pieces of wallboard that he invented nearly five years ago -- and is just now being introduced commercially by United States Gypsum.
The company, a unit of the USG Corporation, giant of the construction supplies industry, sent him 40 boxes of the new product, an alternative to the industry's conventional corner bead. Catching first sight of the Speed Bead logo was a Walter Mittyish dream come true for Mr. Free, 42, a self-described ''old hippie'' who lives in Chichester, N.Y., in the Catskills. With the Speed Bead, he has not only reinvented how he does his job, but may also have found a new career as an inventor.
The odds against creating a successful invention are brutal: only 2 percent of all patents are ever licensed to major corporations, and only 1 of 100 patented products makes money. Interviews with experts in the invention field suggest that Mr. Free transcended these odds through not only a good idea, but luck, pluck and general smarts.
A corner bead is an angled metal strip used to create a smooth corner at the junction of two perpendicular pieces of wallboard. Typically, the corner bead is put into place using a ''Clinch-On,'' a tool that squeezes the bead in a way that creates sharp edges that cut into the gypsum.
Nails or screws are sometimes used to further secure the bead to the wall. Mr. Free did not like using the Clinch-On, which he found heavy and awkward, particularly when working in tight spaces.
One night in 1993, he went to sleep thinking about how to make a better Clinch-On, but woke up believing that the solution might be to improve the corner bead. An hour later, he had created one with built-in barbs that allowed it to be installed by hand.
The Speed Bead was born, but Mr. Free's work had just begun. ''The cliche about invention being 1 percent inspiration and 99 percent perspiration is absolutely true,'' he said.
Mr. Free's first stop was a patent library in Albany, where he, his wife, Pamm, and one of their two daughters, Michelle, spent two Saturdays examining about 150 patents. About 50 concerned building products related to the creation of corners.
''My idea was so simple that I couldn't believe that it hadn't been done,'' Mr. Free said. ''And if it had been done, why hadn't I seen it?''
Mr. Free then approached Thomas W. Crucet, a lawyer in Phoenicia, N.Y. Mr. Crucet advised him to determine if there was a market for his product before spending between $5,000 and $7,000 for a patent that could end up as a wall ornament.
Through the next five years, Mr. Crucet, who had been a corporate counsel for the Wella Corporation, the hair products company, would become Mr. Free's most valuable ally, serving as negotiator and adviser and being paid at an hourly rate.
UNDER Mr. Crucet's guidance, Mr. Free wrote an initial letter to the Chicago headquarters of United States Gypsum in September 1993 -- an inquiry that was rejected, as he expected, with a form letter saying that the company, like most, does not consider outside ideas. The fear is legal entanglements over the origins of novel concepts.
But Mr. Free persevered, sending a second letter disclosing that his bead could be installed in half the usual time and did not require the use of the Clinch-On, nails or screws.
''I tried to be vaguely specific,'' he said. ''You want to describe how your product functions in the broadest possible terms.''
Mr. Crucet added: ''You want to put out enough information about the potential product to tease the corporation, but you don't want to give them enough information to let them walk away with your idea.''
Van Perrine, product manager for interiors at United States Gypsum, took the bait. He invited Mr. Free to send a sample of the product -- after signing an agreement intended to protect the company if the idea turned out to be like anything that it was already developing. ''If the inventor doesn't want to sign the form,'' Mr. Perrine said, ''then that's generally the end of our contact.''
Mr. Crucet and the company spent the next six months hammering out a confidentiality arrangement. Had Mr. Free already obtained a patent, these negotiations would have been unnecessary, because the patent would confirm his status as the inventor.
Toward mid-1994, Mr. Free sent the company a prototype of the product, which he had begun calling the Speed Bead.
''I was intrigued,'' Mr. Perrine said. ''The best ideas are usually pretty simple and straightforward, and Jerry's certainly filled that bill. It was the kind of idea that made you think, 'Why hasn't anybody thought of this before?' ''
The reaction suggested that Mr. Free might have an invention, but he was still far from having a product. He spent another Saturday making a large batch of samples, which United States Gypsum studied with an eye toward improving the product and creating the tooling for production.
By now, Mr. Crucet had negotiated an ''exclusivity option'' with the company that paid Mr. Free for not showing his idea to another company, and arranged for the corporation to pay the costs of obtaining his patent.
It is not unusual that the company agreed to pay for Mr. Free's patent work, according to Pamela Riddle, president of Innovative Product Technologies, a consulting firm that works with inventors. ''Without an eventual patent,'' she said, ''the inventor's chances are slim to nil that the company will pursue the manufacturing and marketing.''
If the adhesive barbs on the Speed Bead could not be patented, for example, rival manufacturers could quickly copy the concept.
BY the time he received his exclusivity money, Mr. Free figures, his out-of-pocket costs were $2,000 to $3,000. Today, he puts the total at $7,000 to $10,000, the bulk of it for Mr. Crucet's services.
In 1995, United States Gypsum made some Speed Beads and conducted field tests with about 20 contractors, who had to guarantee confidentiality. Mr. Free, meanwhile, was consulting with patent lawyers to complete work on his patent application; he filed it that October.
Mr. Free also set out to determine how much the company should pay him for the invention -- a calculation that can cause many first-time inventors to stumble, said Joanne Hayes-Rines, editor of Inventors' Digest, a Boston-based magazine that covers the development of new products.
''Deals are killed because people are greedy,'' she said. ''The inventor thinks that their idea has more value than the tooling, the distributing, the marketing and everything else that goes into selling a product. In the end, the inventor's idea is just the beginning.''
Mr. Free, however, proved a quick study. He projected the potential market by figuring how many corner beads he had used on various projects and applying those numbers to national construction figures he received from the Commerce Department. He also thought it prudent to ask for a royalty based on the number of beads sold, not a percentage of revenue.
Another factor to consider was the life span of a new product, which typically reaches maximum market saturation by the seventh year. The most wildly optimistic projection for the Speed Bead, he figured, would be a one-third share of the market -- the equivalent of the company's share of the wallboard market. Such runaway success would bring him an annual royalty in the mid-six figures.
Other factors were the projected growth of new construction -- and the negative possibilities of an economic downturn or bad weather. USG provided Mr. Free with cost estimates for making and marketing the Speed Bead, but he still described the negotiation as a card game in which both players were careful not to tip their hands. ''I wanted to ask for what the product was worth,'' he said, ''but I didn't want to look like a fool asking for too much, or like an idiot asking for too little.''
With Mr. Crucet's counsel, Mr. Free opened negotiations in September 1995, with an 18-page analysis of the product's potential. He proposed that the company either buy his idea outright for $2 million -- in which case he would assign USG the patent -- or pay a royalty for the right to produce the Speed Bead during the life of the patent. Negotiations, mostly in writing, continued for 18 months.
Mr. Free and the company declined to disclose specific figures, but their agreement calls for him to earn a royalty on the sale of each 1,000-foot increment of Speed Bead. (The company sells three lengths of Speed Beads: 8, 9 and 10 feet.) Mr. Free was also paid a two-year advance on royalties. The deal set an annual minimum royalty based on projected sales of the Speed Bead -- if the company failed to meet the designated amount, it would have to pay the minimum royalty or forfeit exclusive rights to the product.
A FINAL hurdle emerged when the company found that the Speed Bead name had been claimed by another company for use on its new corner bead. United States Gypsum negotiated with the company for the rights to the name and assigned the trademark to Mr. Free, who agreed that United States Gypsum could use the name free unless it was ever used for a different product. In that case, Mr. Free could earn a royalty.
Mr. Free, who obtained his patent in March, said he hoped that his new income stream would let him ease out of construction work and devote himself to developing two other inventions -- one construction-related, the other in power generation.
Ms. Hayes-Rines, the Inventors' Digest editor, predicted that his experience ''will just make it easier the next time.''
He already has the corporate wardrobe, having bought two new suits to attend meetings with United States Gypsum executives. And when he goes to construction jobs, he drives up in a new metallic-green Ford F-150 pickup, with a vanity plate that reads SPD-BEAD.
''Jerry Free did everything right'' in marketing his invention, the Speed Bead, a device for joining pieces of wallboard, said Joanne Hayes-Rines, the editor of Inventors' Digest in Boston.
Ms. Hayes-Rines and others who work with inventors saw specific lessons to be learned from Mr. Free's story:
* Build a better -- and preferably nondigital -- mousetrap. ''What Jerry's invented won't become as quickly obsolete as an electronic device,'' Ms. Hayes-Rines said.
* Don't just approach a company. Find the decision maker. ''If you've got a product,'' Ms. Hayes-Rines advised, ''call the company and find out the product manager in that area.''
* Be professional. ''The image of the inventor is that of the wild-haired guy in the basement,'' said Pamela Riddle, president of Innovative Product Technologies, a consulting firm in Gainesville, Fla., that works with inventors. ''But to be successful, the inventor also needs legal and business savvy.'' In the case of Mr. Free, a self-educated inventor, he also hired an effective adviser.
* Keep an inventor's journal. ''A bound journal offers protection of your idea if somebody else claims that they are the inventor,'' Ms. Hayes-Rines said, though its legal effectiveness can be tenuous. ''The journal should be periodically witnessed, signed and dated by a friend or business associate.''
* Cross your fingers. ''This inventor was lucky to hit a soft corporate heart, which can be hard to find,'' said Larry Udell, executive director of the California Invention Center, a nonprofit group in San Francisco that educates and advises inventors. ''Then again, USG must have realized that there was one hell of a market for his product,'' he added, referring to the USG Corporation, which is marketing the Speed Bead. JOHN MILWARD
Organizations mentioned in this article:
United States Gypsum Co
Building (Construction); Inventions and Patents; Biographical Information
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