I had that idea 10 years ago! If only I would have patented it we’d all be on my yacht right now laughing about how I bought this ridiculous yacht with my millions. Perhaps you have that great idea right now and you furiously googled around ending up here. Maybe you are asking if inventing things is a good side hustle. You are in the right place for some good advice. They say that you should write what you know and just this week I got my 14th patent. I know this because when a patent is awarded, some company gets your name from the USTPO and mails you a notification like this one:
Their hope is that you will buy a rich mahogany plaque of your prestigious achievement to place in your study next to that crystal scotch decanter. As someone who likes a good happiness return on my investment, I have never splurged on these fancy patent decorations. However, I have been gifted a few of them over the years from employers (top photo).
Alright enough of the chit chat. Let’s dive right in.
How Much Does It Cost To Get a Patent?
About $9000 to get a utility patent but read on before you call that lawyer.
Can Patents Make you Rich?
Can patents make you rich? Of course the answer is yes. The Snuggie wearable blanket sold over $500M worth of units making Scott Boilen very rich. The guy who invented Beanie Babies is a billionaire as a result (Ty Warner). James Dyson (who may be a better designer than engineer) famously went through 5,127 prototypes before inventing his Dyson cyclone vacuum. He is now worth over 13 billion dollars.
Some people have simply come up with an idea, patented it, and made millions of dollars. However, some people have also won the lottery, so it is worth looking closer. An industry figure often tossed around is that 97% of patents actually never recoup their filing costs (1).
As an inventor, your idea may be different. However, this statistic should give you pause. Before discussing the best way to get a patent, it is worth spending a few minutes looking at the merit of your invention and your business goal.
Ideas are Cheap But Execution Makes Money
Ideas are cheap but Execution makes money. This is something of a startup mantra. Most founders don’t give loads more equity to the founder with the idea. It is likely that pivots will be made and the company will eventually look nothing like that first idea. The execution of the team in an attractive space is what makes the money. Hundreds of search engine and social media companies have been launched on ideas but there is only one Facebook and only one Google for every few hundred dead ideas that were similar.
If you are going to spend the time and money to patent something, it is certainly worthwhile to think through and layout a plan for your product first. Even if your business plan is to license the patent, who are you going to license it to? Who is your customer (beyond yourself)? Do your intended customers actually want it? At what price point? Can you possibly hit that price point? Asking these questions forces you to look objectively at the viability and value of your idea before paying some expensive lawyer fees. In addition, the more your idea looks like a business as opposed to a patent, the more valuable it will be.
Selling an Idea vs. Selling a Business
It is worth pointing out that Scott Boilen was already running a company that incubated and launched products when he came out with the Snuggie. In fact, it wasn’t even patented. The concept was too basic and had been done before (slanket anyone?). TY Warner created his own company to make Beanie Babies and went door to door partnering with small shops and creating intentional scarcity of some models to market his toys in a creative way. When James Dyson invented his new vacuum, it was rejected by the major manufacturers. He set up his own manufacturing company to build it and undertook a 10 year journey to get to market. The point is that many of these overnight successes, actually were much more than an idea.
Should You Get a Patent
The popular image of making millions from your napkin sketch turned patent is not exactly true the vast majority of the time. For most amateur inventors, you get a great idea but lack the knowledge and resources to make it a reality and then bring it to market. You may think that you need to patent this ASAP before someone else comes up with it. Often there is fear that if the idea is shared, someone might steal it. However, this haste and expenditure of all of your resources up front on a patent may be exactly why so many patents never yield a return.
Checklist To Complete Prior To Pursue a Patent Application
The following checklist will help answer whether you are ready to submit an application.
#1 Does your idea meet the basic requirements to get a utility patent?
The invention must be useful, novel, and non-obvious. It also must be statutory. This simply means it must be a processes, machine, article of manufacture, and/or composition of matter to be patentable. For example, software and some types of medical tests may not be statutory. For more information, here is a concise reference.
#2 Is your product eligible for a patent?
Assuming that your invention meets the requirements from #1 above, a patent must also be filed within 1 year of public use or public disclosure of the invention and/or offer to sell the invention. This means that you potentially have 1 year to see if your invention has value before patenting.
#3 Does patenting actually make sense?
Patent Lawyers will gladly take your money and tell you that a patent is a good idea. However, you should look deeper. Is your idea very similar to others? Are there many easy workarounds to get the same functionality in different ways? If so a patent may not make sense. The Snuggie didn’t need a patent to make a half billion dollars. They relied on being first to market and aggressive marketing at a solid price point. Even with a patent, someone could have perhaps sold a blanket robe that you put on backwards to get around the patent. You need to weigh spending around $9K (the average cost of a utility patent in the USA) on patent protection versus spending $9K to get out there and sell your product.
I have a friend who invented a handy simple gadget and spent months and thousands of dollars trying to lock up some solid patent claims around the space to license it. I told him, spend the money to make product instead and get out there and get gas stations to sell it by the checkout. After all, there is the one year grace period for filing your IP per #2 above. Even if someone else patented it over that year, could they really claim it was novel if you already had a business selling it?
#4 Google it / Prior art search
This one sounds obvious but thousands of dollars can often be saved by making absolutely sure that it doesn’t already exist. Also search the USPTO database for similar inventions that are patented but may not be on the market yet. Loads of patent applications are for something that already exists. In addition, sometimes our thought that there is a need for an invention comes out of us not understanding how others solve that problem currently. There may be another way that is actually more preferable. Your waterproof business suit may have already been disrupted by the umbrella for example.
#5 Is there a market for it and who is your customer?
Often inventors solve their own problems with inventions. However, is your problem a common one with enough customers willing to pay to have that problem solved? There may be less people looking for that bullfrog hunting tool you came up with than you think. Find your customer and do some surveys on your own. Go to a mall on a Saturday and ask people about the problem and how they solve it today. How much would they pay for a solution?
#6 Is it manufacturable at scale?
It does not make sense to patent a design that is not manufacturable. If you made one by hand but it took you 3 weeks, you may not have a manufacturable design yet. Don’t waste money patenting that design. Refine it and get some level of manufacturability review. This can be free by simply getting a quote from a manufacturer (under a confidentiality agreement) to make the thing.
#7 Can it be produced profitably?
If your self cleaning shirt never needs washing and always looks fresh pressed but each one costs $2300, do you still have any customers? Maybe that is why no one has done it before.
#8 Do I have the funding available and committed to make this successful?
If I have $10,000 saved up and spend $9,000 to get my patent, I may not have the funds available to make the product, or market it, or distribute it for example. If so, I just lost $9k.
#9 Do I have a good understanding of my plan and am I willing to do the work?
This goes hand in hand with having the money. You need to have a clear plan in mind that shows a return on your investment to patent the invention and be prepared to put in the work and sacrifices needed to see that plan through.
Making Money From Patenting Your Invention
The best way to make money with patents for the novice inventor is to validate the problem you are solving and your solution to that problem before even applying for the patent. The questions and information shared above is a good place to start. This will help to make sure that you are not one of the 97% of patent holders that loses money. It will also put you on a path to realize the true value of the business your patent creates rather than looking at it as a piece of paper for sale. This is sure to maximize value whether you partner with others or build the business yourself.
Do you feel ready to apply for that patent now? Part II of this article walks through the Best Way To Get Your Patent Step By Step.
A Disclaimer
This article is based off of patents in the USA. While I have done my best to describe patents in this article based on my own experience and recollection, I am not an attorney and make no guarantees to the accuracy of the information shared. Laws may also change over time. I advise readers to seek additional council beyond this succinct overview.
