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So You are Wondering if You Should use an Invention Promotion Company to get Rich?

So You are Wondering if You Should use an Invention Promotion Company?
by Andrew R. Spriegel
December 16, 2010

Let’s take a look at Davidson as an example.

Here is how I and other interpret the numbers:

Davidson received $745 from each of the 50,516 research contracts ($37 million), and an average of $3k-$15k (lets use $5k) from the 13, 849 New Product Sample Agreements ($69 Million) for a combined total of $106 Million received; the total number of consumers who obtained license agreements is just 376, and the number who actually made more money in royalties than they paid is only 14.  This is a success rate of 14/13,849 = .001%.

This success is actually inflated if you consider the 14+376 /589,418 of the New product submissions.  This would then be an even lower  .00066%.

Apparently, because they have been sued for their actions, they now must publish these numbers for full disclosure.

I am going to send a letter to Davidson to check that I did the math correctly.  However, based on how I am interpreting their numbers your odds are very low at being successful.

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Attorneys have been laidoff from Large Law Firms and have to set up a New Office – Go Used!

Attorneys have been laid off from large law firms and have to set up a New Office – Go Used!
by Andrew Spriegel
December 9, 2010

Being an attorney and having attorney friends that have been laid off, I see those friends quickly rent cheap office space, rush out to Office Max and buy inexpensive furniture that does not exactly ‘WOW” a prospective client.

I am suggesting you go USED!  One of the large law firms I used to work for bought their furniture from Office Furniture Warehouse at 4100 Payne Avenue, Cleveland, Ohio 44103, 216.431.2700, 216.431.7778.  This is not a paid advertisement or endorsement.  There are used furniture stores all over, I just happen to like the team at their store, the great furniture at the store and I have purchased a lot of it.  I would never consider buying new office furniture for my office or home again.

Here is one of my latest purchases, I wanted additional two 5 drawer Steelcase (Great Product) lateral files.  The files look brand new and they were approximately $379 each plus $75 deliver or about $833 + a $20 tip for the deliver guys, so a total of $853 TOTAL.  The files look brand new, have the keys for locking the files and they shipped them with an abundance of dividers!  By the way the drivers are great and very careful in moving the furniture.  Below is a picture taken off of Office Furniture Warehouse website.

Just for comparison I called a local company (Canton Ohio) for a quote on new Steelcase in “case” I needed more lateral files in the future.  I try to shop locally as much as possible or in Ohio.

Here are drawings/informational sheets and the attached quote for the new lateral files:

So here is the quote:

So here is the actual quote from a company located 7 miles from my home in Jackson Township, $2586.25.   So I SAVED $2586.25 – $853 = $1753.25.  So to all my clients and future clients, let me say I am not cheap, I am saving you money by reducing overhead and going green (the cabinets look better in my office than a landfill) so that I can pass that savings along to you.  So if you read this post please ignore the tiny, almost imperceptible ding on the lower cabinet door on the right side cabinet.  I interviewed Allen Ferber, the owner of Office Furniture Warehouse.

Question: Where do you get your furniture?

We get out furniture from mostly very large companies who are either moving and/or purchasing new furniture.  More than half comes from the east coast, about a quarter comes from places like Chicago and Detroit, and that balance from metro Cleveland.

Question: How do you advertise and promote you business?

People find us in many ways. We advertise on Television, the internet, various print media – business magazines and newspapers.  We also get a lot of our business by word of mouth.

Question: How far do you ship furniture?

We ship mostly in the eastern half of the United States, however 80% of our business is within a hundred miles of Cleveland.

Question: What type of furniture do you sell?

We sell mostly high end office furniture and some nice home office furniture, with very little lower end furniture.

Question: Where are you located?

Our business is located about 3 minutes from downtown Cleveland.

Question: Where can I see you furniture?

A cross section of the furniture is put on our website. – we encourage people to call with their needs and we can within a few minutes e-mail pictures of various items that may be of interest.

Question: Can I get get a discount on my next purchase for writing this article?

Andrew, I have a call coming in on another line, I have to go, let me call you next week.

Yo Allen I am still waiting for your call!  Either way you have saved me a lot of money!

Take Away: So if you are looking to opening a new firm or business I recommend buying used.  In addition, if you are a new client think of the money I am saving you!  Not to mention the great work/services we perform.

Office Furniture Warehouse at 4100 Payne Avenue, Cleveland, Ohio 44103, 216.431.2700, 216.431.7778.

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Invention Success Rates | Odds of Inventor Success

Invention Success Rates | Odds of Inventor Success
  
What percent of inventor ideas are successful? What percent of patents make money? What percent of inventions are commercialized?
“I’m a risk taker. I get up in the morning knowing that I’m either going to have a spectacular win or loss that is going to be exciting. I prefer theformer but either is more appealing than the warm death of mediocrity.  ”Dean Kamen, Inventor of the Segway human transporter 50% – 1 out of 2.  Earthquake odds. Chances of a major earthquake striking the San Francisco Bay area within the next 30 years [1989 + 30 years = 2019].  “Last week’s shattering earthquake may one day be remembered as a dress rehearsal for the Big One — a cosmic temblor that, according to seismologists, has a 50 percent chance of striking the Bay Area within the next 30 years.”  (Newsweek, October 30, 1989, p. 28) He who doesn’t take risks, doesn’t drink champagne.”
An old Russian proverb

“I could be living in the French Riviera.  But I like hanging out with my friends.”
T. Dosho Shifferaw, Inventor of the Bowflex

“In truth, odds are stacked astronomically against inventors, and no marketing outfit can change them.”
Richard Maulsby
Director of the Office of Public Affairs,
U.S. Patent & Trademark Office


90% of an invention’s success is marketing it and getting it out.  “[T]he idea is about 10 percent of this exercise; 90 percent of it is the marketing of it, getting it together, getting it out.” (Richard C. Levy, inventor of Furby quoted in Liane Hansen, All Things Considered (NPR), “Profile: Independent toy inventor Richard C. Levy,” June 18, 2002)


99.9% fail – 1 out of 5000 inventions have successful product launches.  “[E]xperts estimate that 1 out of 5,000 inventions have gone on to successful product launches.”  Invention success rate.  Percent of inventions that fail. (Williams-Harold, Bevolyn, “You’ve got it made! (developing invention ideas),” Black Enterprise, June 1, 1999)

99.9% fail.  Only 2 products are launched out of every 3,000 ideas.  “Out of 3,000 ideas, for instance, only about two products are ever actually launched — and only one of those succeeds, says Greg Stevens, president of WinOvations, a new product research and consulting firm in Midland, Mich.” What percent of inventions become commercially successful? (Jeannie Mandelker, Reporter Associate: Anne Ashby Gilbert, Marketing, Your Company, pp. 54+, October 1, 1997)

99.8% fail.  Only 3,000 patents out of 1.5 million patents are commercially viable. “In truth, odds are stacked astronomically against inventors, and no marketing outfit can change them. ‘There are around 1.5 million patents in effect and in force in this country, and of those, maybe 3,000 are commercially viable,’ [Richard Maulsby, director of the Office of Public Affairs for the U.S. Patent & Trademark Office], says. ‘It’s a very small percentage of patents that actually turn into products that make money for people. On top of all that, to get ripped off for tens of thousands of dollars adds insult to injury.”  What percent of patents make money?  How many patents become products?  Percent of patents commercialized.  Percent of patents that get approved.  (Richard Maulsby, director of public affairs for the U.S. Patent & Trademark Office, quoted in Karen E. Klein, Smart Answers, “Avoiding the Inventor’s Lament,” Business Week, November 10, 2005)  


Why is there such a high inventor failure rateWhy do most inventors fail to get their product to market?

 


99% fail. 1 out of 100 ideas make it.  The reality is that “for every successful business, you have probably 100 ideas or more.  The one out of a 100 that makes it to market, their success rate isn’t that great either.”  What is the probability of becoming a successful inventor?  (Robert D. MacDonald, Entrepreneur Consultant, Lake Oswego, Oregon, “Oregon Ranks No. 8 In Nation In Inventors,” The Columbian, January 9, 1998)

98% fail.  Only 2% earn significant dollars.  What percentage of patents succeed?  “According to the U.S. Patent and Trademark Office, approximately 2 percent of patents earn significant dollars for their inventors.”  Patent success rates.  Patent odds of success. What percentage of inventors make it? (Susan Glairon, “Boulder, Colo., Inventors Find Joy in Journey from Idea to Product,” Knight Ridder/Tribune Business News, April 17, 2000)

97% to 98% fail – “[O]nly 2 to 3 percent of registered patents ever make it to the market.”  Percentage of patented inventions that make it in the marketplace  Chances of invention making money.   (Stuart West, intellectual property lawyer based in Walnut Creek, California quoted in Marton Dunai, “More inventors try to market products,” Oakland Tribune, September 5, 2006)

95% to 97% fail – Only 3 to 5 out of 100 inventions succeed.  “It is universally accepted that out of every 100 inventions, only three to five will succeed commercially.”  Percentage of inventions that succeed.  Patent commercialization success rate.  (Yeang Soo Ching, “Reaping rewards from inventions,” New Straits Times, December 24, 2000) 

95% fail.  Less than 5% of patents are commercialized.  “And less than 5 percent of the patents received by small inventors culminate in a commercial product.”  Percent of patents commercialized.  Odds of success for independent inventors.  Statistics of odds of independent inventor patents being commercialized.  (Sougata Mukherjee, South Florida Business Journal, June 8, 1998)

1 out of every 20 or 25 ideas becomes successful.  “Only one of every 20 or 25 ideas ever becomes a successful product — and of every ten or 15 new products, only one becomes a hit.”  (Thomas Kuczmarski, Kuczmarski & Associates, Chicago consultant specializing in innovation,  Fortune, 12-2-91 pp. 56)

95% fail – Only 5% earn money.  “It’s been reported, without confirmation, that worldwide, only 5% [five percent] of all patented inventions ever earn any money for their inventors.” (Business Daily, Philippines, November 27, 1998)

95% fail – Only 5% of independent inventor patents are produced in the marketplace.  “Independent inventors …are responsible for 15 percent of all U.S. patents. Fewer than 5 percent of those patents are ever produced in the marketplace.”  Percentage of independent inventor inventions that make it in the marketplace.  (Tim Lemke, “Invention + market savvy = successful product”, The Washington Times, April 16, 2001)

95% of all new products fail.  “But the market can’t absorb that many new ideas, and an estimated 95% of all new products fail. In part, this reflects the way many new products come about.  Individual inventors often work outside corporate structures, have limited product-development funds and are unfamiliar with industry standards and practices.” Success rates for independent inventors. (Caryne Brown, “Making money making toys: how black inventors are bringing innovative ideas to the toy market”, Black Enterprise, November 1, 1993)

6% probability of commercial success for independent inventors.  “The probability of commercial success for inventions developed by independent inventors was determined to be exceptionally low: 6.5% ([+ or -] 0.7%).” Probability of a successful invention.  How many inventors succeed?  (Thomas Astebro, “Basic statistics on the success rate and profits for independent inventors”, Entrepreneurship: Theory and Practice, December 22, 1998)


90% fail.  Only 10% of those who make prototypes end-up making money.  Brian Miller, PRe Plastics’ director of operations, saiabout 10 percent of inventors who come to him leave with a mold, and about 10 percent of those people make money.  ‘They have to survive the cost of the mold. Very few inventors who come through the door get the mold done, let alone find success.’”  Success rate of inventions and prototypes.  (Brian Miller of PRe Plastics quoted in Thuy-Doan Le, “Entrepreneurial spirit starts to pay off for Sacramento, Calif.-area inventor,” The Sacramento Bee, December 12, 2004)

80% fail.  1 out of 5 succeed.  “Typically, small manufacturers experience about five failures for every one success.” (By Courtney Price, “Outsourcing helps inventor bring product to market, Denver Rocky Mountain News, November 2, 1997)

76% fail.  Percent of cases lost by patentees in doctrine of equivalents cases.  “By far the most dramatic finding of our study is that patentees rarely win doctrine of equivalents cases. Overall, patentees won only 24% of the doctrine of equivalents cases decided in the last eight years. Compared to the overall patentee win rates on other issues — 54% on validity alone in cases at various stages of litigation, (51) and 58% overall in cases that make it to trial (52) — and the baseline assumption in the economics literature that plaintiffs should win about 50% of the time, (53) this is a remarkably small win rate for patentees.” (John R. Allison and Mark A. Lemley, “The (unnoticed) demise of the doctrine of equivalents,” Stanford Law Review, February 1, 2007)  Peruse more books by John R. Allison and Mark A. Lemley.

75.6% fail.  Patentees lose 75.6% of the time against accused infringers.  “An empirical study of the results of patent litigation at the appellate level during the period 2002-2004. Dispositive case results, i.e., those not involving a remand on the merits, are compiled. Patent owners won 24.43% of the cases and accused infringers the remainder. The cases were further analyzed to determine the characteristics of winning and losing parties, including nationality, financial strength, location of principal offices, and several other factors.”   (Paul M. Janicke, University of Houston Law Center and Lilan Ren, University of Houston, “Who Wins Patent Infringement Cases?,” American Intellectual Property Law Association Quarterly Journal, Vol. 34, p. 1, 2006)  Find other publications by patent attorney and law professor Paul M. Janicke.

70% fail – 7 out of 10 new products fail.  “Nearly seven out of 10 new products fail either because no market really existed in the first place.”  (Gary Miller, president and founder of Aragon Consulting Group, St. Louis, Missouri, “’New Coke’ And Other Disasters Can Be Avoided”, Viewpoint, September 22, 1997)

59% fail – 41%. percent of U.S. patent applications were approved in 2006. “Patents themselves don’t come easily. In 2006, the patent office received 443,652 patent applications, but only 183,187 were issued that year.”  183,187/443,652 = 41%.  (Joyce Smith, Business Columnist, “Seeing your invention through: Entrepreneur week helps highlight some success stories of those who dream big,” Kansas City Star, February 27, 2007)

50% to 89% fail – Between 11% and 50% of entrepreneurs succeed in starting a firm.  “Wholly reliable statistics are not available on the likelihood that inventions developed by individuals succeed in reaching the marketplace. Data are limited to those that reveal how many nascent entrepreneurs actually succeed in launching a firm. Reynolds and White (1992) first reported that somewhere between 11% and 50% of all nascent entrepreneurs succeed in starting a new firm. In a later study, White and Reynolds (1994) estimate that between 30% and 50% of all entrepreneurs succeed. Katz (1989), on the other hand, reports that 15% of all nascent entrepreneurs in the U.S. enter self-employment.” (Thomas Astebro, “Basic statistics on the success rate and profits for independent inventors”, Entrepreneurship: Theory and Practice, December 22, 1998)

50% to 80% fail – Failure rate is 50% to 80%.  “Conservative estimates put new product failure rates between 50 to 80 percent, according to the United States Small Business Administration, which cites another discouraging statistic. For every 100 ideas offered by innovators, only five will ever be produced, and only one has even a chance to make money.”  Patent success ratio. Invention failure rate.  (Barbara Bradley, Scripps Howard News Service, San Jose Mercury News, Sunday, February 18, 1990, p. 1PC)

 

99% fail. Only 1 out of 100 patented products make money.  “Even an inventor whose product is unusual enough to receive a patent faces daunting odds. Only an estimated one out of every 100 patented products makes money.” Percentage of patents that make money. Percentage of inventions that make it to market.  (Mimi Whitefield, Herald Business Writer, Miami Herald, February 5, 1996, p. 22BM)

46% fail – Only 54% of patent applications are approved.  “Only 54 percent of patent applications receive approval, according to the patent office.”  Odds of patent approval.  (Julia Feldmeier – Washington Post Staff Writer,, “Any Bright Ideas?; How Local Inventors Try to Capitalize on That ‘Aha!’ Moment,” The Washington Post, March 4, 2007)

40% fail – 60% of patent applications are approved.  About 60 percent of applications are approved. Patent approval odds.  (U.S. Patent Office spokeswoman Brigid Quinn quoted in Thuy-Doan Le, “Entrepreneurial spirit starts to pay off for Sacramento, Calif.-area inventor,” The Sacramento Bee, December 12, 2004)

25% win rate.  Patent owner long-term contested win rate.  “The long-term contested win rate for patent owners varies around 25 percent.” (LegalMetric press release, “LegalMetric Data Of KSR Effect On Patent Owner Win Rates,” eWorldwire, September 12, 2007)

20% – 1 in 5 error rate.  Loan error odds. Estimated odds that an American’s consumer credit reports have loan errors.  “Odds are 1 in 5 that your credit report has errors damaging enought to keep you from getting a loan.  And, says Consumers Union, odds are even greater — almost 50-50 — that your report has an error of some kind.  Lenders rely on credit reports, which show consumers’ records at repaying debts.  Three private companies — TRW, Equifax and Trans Union — compile most of the USA’s consumer credit data.”  (USA Today, April 30, 1991, p. 1A)

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Sealing a Licensing Deal for Under $100

From Inventor’s Digest

Editor  Mike.Drummond@inventorsdigest.com

12-Step Program

Sealing a Licensing Deal for Under $100

An excerpt from the upcoming book Guerilla Inventing: An Inventor’s Guide to Getting Inventions to Market without Going into Debt

By Roger Brown

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There are two questions that come up any time I talk to inventors. The first is “Do you really get your invention ideas licensed for under $100?”

When I say, “Yes,” the second question is “How?”

This is the route I take for most of my ideas. I do not pay for a provisional patent application or formal patent. I use a non-disclosure agreement (NDA) when approaching a company with a new product idea.

You don’t need a patent or patent application. There are plenty of large and mid-sized companies that will review non-patented ideas. Companies that are interested in my new products pay for any intellectual property protection, if they desire.

Meanwhile, I get inventions to market spending between $10 and $100 (when no attorneys are involved). Other than the opportunity cost of doing research and other preparation, my first royalty check is pure profit. I am not waiting months or years to earn back the thousands of dollars spent on patents, huge presentations that aren’t needed, professional prototypes, or paying fees to invention submission companies before I break even.

Below is my step-by-step breakdown of how I go from conceiving an idea to closing a deal.

Step 1 – The Idea

Inspiration comes in many forms. You can be walking through a store, see a product and have an idea for a better product right off the top of your head.

Continue Reading at Roger Brown’s site ->

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Turning Your Ideas and Products into Cash

Turning Your Ideas and Products into Cash

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Sometimes you just have to get out and sell it!
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When Dave Hoffman came to me for a consultation he needed advice on his invention.  Dave had designed and built a wireless dial measurement indicator.  Like most engineers (including myself) he was critical of his prototype, he wanted it to have better accuracy.  I suggested that he add an attractive label to the digital display and that he have JD Sanders market the product.  That’s when I found out he had ten working prototypes and I suggested he sell them all.
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JD Sanders has great marketing skills and in addition he worked at Cromwell Tools  for two decades and had a ton of contacts in that arena.  Dave had his invention written up in Machine Design and it was off to the races.
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Parker Hannifin, Babcock & Wilcox, JJB Engineering, Ansco CNC Specialists, Cornwell Tools and Standard Engineering Group, all of the Akron, Ohio, area, SchoellerBleckmann Energy Services, Grayledge Pump & Industrial LLC, Logan Machine Company and GM Lordstown, Ohio, are currently using the wireless test indicator.

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