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LICENSING OFFERS PATH TO PRODUCTION

Series: FROM IDEA TO MARKET Sun Sentinel; Fort Lauderdale; Nov 9, 1998; MARCIA HEROUX POUNDS Staff Writer;

Abstract:
Jim Ward, an inventor from Rome, Ga., who recently attended the Innovators and Entrepreneurs Expo in Miami, said obtaining his two patents was easy.

Ward has been trying to license his Puppy Perch, a mount that allows a small dog to ride with his owner on a bicycle, and the Canine Carry, a flexible harness designed to restrain a dog while training him without putting a strain on his vertebra.

Licensing is often the best bet for an inventor who doesn't have the manufacturing experience or resources to carry a new product to market himself, experts say.

Full Text:
Copyright Sun-Sentinel Co. Nov 9, 1998

Second in a series Informational box at end of text.

Jim Ward, an inventor from Rome, Ga., who recently attended the Innovators and Entrepreneurs Expo in Miami, said obtaining his two patents was easy.

"The biggest challenge is getting the products} to the market," he said.

Ward has been trying to license his Puppy Perch, a mount that allows a small dog to ride with his owner on a bicycle, and the Canine Carry, a flexible harness designed to restrain a dog while training him without putting a strain on his vertebra.

He has approached some bicycle manufacturers about the Puppy Perch, but has had no bites yet.

Licensing is often the best bet for an inventor who doesn't have the manufacturing experience or resources to carry a new product to market himself, experts say.

When an inventor licenses a product, he is selling specified rights to manufacture and sell his invention in exchange for a royalty payment.

"The average royalty is 5 percent of the manufacturing cost of the product," said Pamela H. Riddle, chief executive of Innovative Product Technologies in Gainesville.

The manufacturer should give the inventor an upfront fee to show it is working in good faith. That may be anywhere from $5,000 to $150,000.

"The highest one I had was $3.1 million," Riddle said. That was for an interlocking portable dance floor, she said. "That's part of the negotiation. Have them make you an offer, which puts you in a counter-offering position."

The fee also helps reimburse the inventor for some of the research and development and costly government approvals required.

In making an agreement with the manufacturer, look for a minimum guarantee on sales, Riddle said. This should say how many units will be sold for an agreed-upon number of dollars. That will entice the licensor to get out and sell the product and not hold on to it or come out with a deviation, she said.

Most agreements are done for three or five years, with options for the licensee and licensor to renew the agreement after that.

"If you're going to do business with them, check them out thoroughly," Riddle said. She said go beyond credit and court checks. It may even be worth hiring a private investigator.

Robert Kain, a Colorado-based lawyer who specializes in patents and trademarks, said licensing also can be spread around by type and location.

"You can carve up the patent by market: consumer market, military service market," Kain said. Inventors also can give different licenses to different geographic areas. "You can't do that with all intellectual property."

Riddle said there was one inventor who wanted to keep his small family business in Florida so he retained his rights to the state but licensed his product in the rest of the nation.

"If the licensor} was one huge company I would probably try to license it to them, but if the product has several usages, you have options," she said.

This week Sunday: Invention may be the spirit of America, but the American patent system presents serious challenges to any inventor.

TODAY: What you need to know about patents and trademarks, how to license your product, and price and market your invention.

Tuesday: A former band manager is on the verge of success with a simple locking cigarette lighter.

Wednesday: A Boca Raton pharmaceutical saleswoman hopes she can make it big with a versatile dining chair cover.

Thursday: A couple moves their company from Connecticut to Florida to develop a bionic dolphin.

Friday: Two brothers and a father-son inventing team come together to sell a digital sound-enhancing system for movies, Internet and CDs.

Sources for inventors U.S. Patent and Trademark Office's Web site: www.uspto.gov. Assistance: 800-786- 9199. Thomas Register of American Manufacturers, available at major libraries including Broward County's main library in downtown Fort Lauderdale. On the Web, www.thomasregister.com The United Inventors Association of the USA, a nonprofit organization that publishes newsletters, information on inventor resources and promote awareness of fraudulent invention marketing companies. United Inventors Association at 716-359-9310. Intellectual Property Owners Association: 202-466-2396 or on the Web at www.ipo.org Wal-Mart Inventors Network, represented by Innovative Product Technologies in Gainesville: A program developed to assist inventors and innovators by evaluating consumer product ideas through a two-step process. The evaluation, even if positive, does not mean Wal- Mart will place the product on its store shelves. Cost is $275. For more information, contact Southeastern-Win Program at 352-373-1007. Inventor's Society of South Florida/Fort Lauderdale: 954-776-1188. Enterprise Development Corp., a not-for-profit government business partnership established to guide development of Florida's economy. For South Florida, call 561-627-2555.

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