Effective commercialisation of your IP
We’ve seen many good ideas squandered because of the inability to successfully commercialise. This is the reason we’ve introduced Patentec commercialisation mentoring: to help inventors take their ideas from conception right through to successful commercialisation.
Our team of commercialisation mentors have many years of experience across all aspects of commercialisation with proven results. Brian Dorricott is a proven tech entrepreneur who can guide you on the path to success. Robin Debenham will apply his 25 years of strategy consultation to maximise your potential.
Our L.A.B. commercialisation process
Our commercialisation mentors assist in the all-important question: How do you successfully monetise your IP?
As such, our commercialisation mentors will help you decide which which of the three L.A.B. monetisation strategies would be the most effective for monetising your IP: the licensing, assignment (sale) or business (bringing the product to market yourself).
Going into business (B)
The first approach is to bring your product to the market yourself. Using this approach, you would leverage from your patent application to prevent your competitors from competing with infringing products.
Advantages of going into business include your being able to generally make a greater profit (depending on the cost of sales) as compared to licensing your IP. Generally, while royalty rates vary, for mechanical type inventions, one could generally expect to attract about a 6% of sales price royalty. As such, if you believe you would be able to make a profit greater than 6% of sales price, taken into consideration cost of sales and other considerations, then bringing the product to market yourself may be a viable option.
Disadvantages of going into business include start-up costs and having to develop distribution channels
However, think about the disadvantage of the costs involved in having to bring the product to market yourself. Initial manufacture and tooling up costs may be substantial and having products manufactured overseas, such as in China may prove difficult. As such, you should ask yourself, “what would be the cost of the first sale”?
A further disadvantage relates to your having to develop distribution channels. When bringing the product to market, you would have to spend on marketing and advertising to develop your client base. Conversely, if you license your IP, you could leverage from the existing distribution channels of your licensee.
An alternative approach to monetising your intellectual property is the straight sale of your IP. The sale of your IP generally involves a once off lump sum payment for your IP rights. In practice, the sale is performed by way of the assignment of your patent application to the purchaser.
An advantage of the sale of your IP is the relatively quick and simple receipt of the cash sale amount and your not having to pay for future patent costs.
A disadvantage of a sale is your loss of your IP rights
However, a disadvantage relates to your loss of your IP. Generally, a more preferable approach is the licensing of your intellectual property for the reason that when licensing, you retain the IP. Furthermore, if you license your IP exclusively to a licensee, it is common to include a clause within the license agreement that the licensee pay for the future patent prosecution costs. In this manner, you can retain your IP, while generating royalties for the 20 year life of the patent without having to pay future patent prosecution costs.
Licensing of your IP is generally the preferred approach for successfully monetise in your IP.
Licensing has several advantages including your not having to spend to bring the product to market.
Furthermore, when licensing you are able to leverage from the existing distribution channels of your licensees, saving your time in effort in having to develop distribution channels.
Furthermore, when licensing, you are able to retain your IP, which would otherwise have been lost if you had sold your IP. In this manner, you can license your IP to various licensees in various countries depending on the commercial considerations.
When licensing, you can keep your IP, save on start-up costs and use someone else’s distribution channels.
While royalty rates vary greatly depending on technology, for mechanical type inventions, you could generally expect to attract about 6% of sales price.
Questions our commercialisation mentors tackle
- Which is the most effective monetisation path: LAB (license, assignment, business)?
- What problem is your invention solving?
- What is the cost of your first sale?
- What is the name of your first customer?
- What is currently on the market place?
It is paramount that your commercialisation timeframes fit with those of your patent application so you can take advantage of commercial developments by way of further patent protection. Generally, your patent application process is subservient to your commercialisation considerations and Patentec patent attorneys can manage your patent application in accordance with your commercialisation objectives, such as by deciding on:
- Which countries would be of commercial interest for patent protection?
- How to structure the claims of your patent (so as to be able to license different aspects of your invention to different licensees, for example)
- Whether to use the PCT application or to file in his country of interest at the end of the provisional period
- Whether to capture improvements for your invention
- Which points of novelty would be most commercially valuable for your granted patent claims
Patentec commercialisation mentors can be the difference as to whether your invention is successfully commercialised or not.
Our commercialisation mentors will start of the commercialisation process with an initial full day workshop during which the following aspects are covered:
- “The Now”: the brief history of your invention, your background and how did you get here
- Where do you want to go?
- Educate on the LAB (license, assignment, business) monetisation strategies
- Relate the chosen LAB path to your situation
- Make recommendations
The outcomes of the initial commercialisation workshop will therefore be:
- Recommendation for L, A or B monetisation strategy, and the associated costs, values and risks associated with the chosen path
- Timeline for the chosen LAB monetisation strategy, fitting within the patent application timeframes
- Next steps
As such, if you have a commercially valuable idea and need commercialisation mentoring, please contact us for an initial free consultation.