The first thing most inventors want, when they are trying to develop an invention, is a step-by-step guide for invention. The difficulty with this, however, is that there are three competing interests: patent protection, marketing, and product development, and all three must be advanced concurrently. The specific order varies depending upon the particular invention, and expert advice may be required to determine a successful strategy that avoids the many pitfalls in the process.
Following are the three different major phases of invention development: (1) Initial Research, (2) Due Diligence, and (3) Final Steps. Within each of these phases are multiple tasks to be performed in each area of interest.
I. INITIAL RESEARCH
The first step is to conduct basic research to make sure that this idea is worth pursuing. There are three primary areas that must be researched: Marketing, Patent-ability, and Product development/feasibility.
A. Market research – Is the product already on the market? It is amazing how frequently an “inventor” can quickly find the exact same product already for sale, even if the product is not widely known. You need to methodically search for the product, not just in large stores, but also in smaller specialty stores, catalogs, web stores, etc. Google is a great tool for this process.
If the product is not already on the market, is there a place for your product in the market? Is it superior to what is already offered? Is it lower in price? Does it fill a particular niche?
Also, is the potential market large enough to make it worth it? The greatest invention in the world may not be worth it if the worldwide market is only a few thousand units (unless they command an extremely high price).
B. Patent research – Does the product already exist, or would it be obvious in light of what already exists? Search yourself on the Google patent search engine (www.google.com/patents). A professional patent search is recommended if you can’t find it yourself, because a professional can find many patents that are missed by beginners.
C. Product research –Is there a realistic process for manufacturing the product for a commercially reasonable price? Are there any practical or technological hurdles to manufacturing the product? Can you prototype the product for initial testing?
You should not waste time and money on a project until you have cleared the invention through all of these initial questions. I would typically recommend starting with the market research and the preliminary patent research, because they can all be performed on your own quite easily using Google. If you can’t find the product on the market, if a professional patent search shows that the idea is patentable, and if you cannot identify any barriers to manufacturing the product, you are ready to move forward to phase 2.
II. DUE DILIGENCE
The particular order of the next three steps will vary depending upon the invention. Since the US is now a “first to file” country, an early patent application filing is very important. A quick patent application (often a Provisional) may be a good place to start for many inventors. However, a patent application is much more valuable if you have a pretty good idea of the details of how the product will be made. For this reason, I often recommend building a prototype, or at least working out details of product construction, before jumping to a patent application. Early discussions with both a patent attorney and a good prototyping expert can be helpful.
A. Product -- Build a prototype, or at least figure out how it will be made. Work out all (or at least most) of the
details of construction, method of manufacture, method of use. Determine start-up costs (tools and molds, initial inventory, etc.). Critical – Determine the COGS (cost of goods sold) for each unit, in suitable volume.
B. Patent – Once you have a good idea of how the invention is going to be made, file a patent application as soon as possible. At least file a quick provisional, which can be filed for a reasonable fee. A full utility and/or design patent should be filed as soon as appropriate, and depending upon budget.
It is important to recognize that a Provisional patent application is never examined. To get a granted patent, which is a huge benefit to an inventor, you will need to file the Utility patent application as soon as possible. I offer a free consultation to review your particular invention, and plans for development, and I can provide you with a specific plan for protecting your invention.
C. Market – A critical third part of the due diligence is to perform Market testing to determine if people want to buy the product, and what they would be willing to pay for it (Retail Price). This is obviously a critical question that you need to get answered as soon as possible.
Unfortunately, it is difficult to do the necessary testing and surveys in a confidential manner, without jeopardizing your patent rights. For this reason, I typically recommend doing this testing after filing a patent application. Focus groups are helpful, even if just family and friends (although actual target customers are preferred). Use written feedback so that potential customers can be honest in their feedback, and you can accurately record and tabulate the results. A person may hesitate to tell you in person that the idea is not a good one, or that they would only pay half of your projected retail price, so you need to make sure to get unbiased and honest opinions.
The absolute best testing is to try to get people to actually agree to buy the product. Actual pre-sales can be attempted, a process that is facilitated by many new web-sites (such as Kickstarter). Some entrepreneurs attempt to sell the product on a web site before the product is completed, and see what response they receive. If they get orders, simply respond that the product is temporarily out of stock, and take their email address for future notification.
If you watch the popular television show “Shark Tank” you will quickly see how important actual sales can be to an inventor. It is almost the first thing that the experts ask all of their new inventors!
III. FINAL STEPS
The final step is to determine if you have a working game plan. What is the plan for selling the product (what channels of trade)? Then do the math and see if your COGS is low enough, and your retail price point high enough, to support a successful product. If it all adds up, you are set to either license the product, or launch the product.
A rule of thumb is that you need to double the COGS to get the wholesale price, and double that to get the retail price (so a product with a $1 COGS should wholesale for $2, and retail for $3.99. This varies for different channels of trade, so make sure you understand the pricing in your industry, and make sure your product works. If your product costs $10 to manufacture, you had better be able to sell it for $39.99 (or more), or the invention is not going to work. If you can mark it up to $65, you have a potential home run!
Finally, seek advice from an experienced expert in the field, who can help guide you through the process. Ideally, your team should include an experienced patent attorney, an experienced expert in prototyping and manufacturing new products, and a marketing expert with experience in new product launches. These experts can help guide you through the process.
Registered Patent and Trademark Attorney
Karich & Associates