Once you have a high-quality prototype of your invention, you’re probably wondering how best to market and monetize your product. “A common misapprehension with new inventors is that the hard work stops after the product is protected and designed; however, this is not the case. You have to be prepared to drive your product no matter which avenue you choose” (source: http://www.innovate-design.co.uk/sell-idea/) when it comes to marketing it.
Understanding Licensing Agreements
Before you sell your product idea, you’ll need to obtain a firm grasp of licensing agreements so you can sign a contract fully aware of what you are getting into. Signing the contract or licensing agreement effectively allows the manufacturer to produce and market the product, providing you with royalties. There are various types of licensing agreements available in the UK; however, the three main types include an exclusive license, sole license, and non-exclusive license.
The exclusive license allows one company the right to produce and sell your product. The sole license allows both you and one company to produce and sell the product. The non-exclusive license allows you and any number of companies to produce and sell the product. Whatever license you choose, of course, will also come with a list of terms and conditions that both parties must abide by for the length of the contract, which may be set for several years or as few as six months.
What Are the Benefits of Licensing?
Licensing provides inventors with royalties from the wholesale profits made through the sale of their invention. Licensing minimizes the financial risk for inventors associated with the mass production of the product. Licensing also allows the inventor the opportunity to work with and learn from an established company that is adept at marketing and selling. Many inventors prefer to allow a company make and sell their products for a period of time before they (if they choose) decide to take on that enterprise on their own.
Finally, some inventors are actually selling their ideas/inventions to the UK government that regularly works with innovators that have marketable ideas through programs geared for inventors. “The (UK) government has set a target for 50% spend on cloud, and 25% spending with small and medium business suppliers.” (Source: http://www.settuk.com/blog/great-idea-sell-it-to-the-government) Whatever route you decide to take to market your invention, however, be sure to take the time you need to research its ins and outs before signing on the dotted line of any contract.
Sources:
1. Innovate Product Design, “How to Sell an Idea,”
2. Sett, “Great idea? Sell it to the Government!”