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[dtpater]

Help from a Good Friend Below!

“This the right time and the most important time for the Inventor and the (manufactures own) Patent attorney to sit down and organize the Patents to be applied and the reason why half of Asian Manufactures prefer a clean skin Invention (That’s with no Patents), this gives them control on how the Patents are written and applied..’  under assignment!

Very good, Derek.
There is a clear difference between a patent written around an invention, and one written around a developed designed , market-ready ,invention based product.
Something about it giving companies a more focused defense strategy.
You can see the sense of a ‘clean skin’ policy, offering designed, invention-based products, using NDA’s ,and then the patent being written around the finished commercial product, enabling companies to effectively plan around the patent.
Patenting then is at its most effective, and written within the context of market realities and optimum defense.
It makes compelling sense.

[dtpater]

Below is the Deal I did for my Second new product with a Taiwan Manufacture

Dear Derek,
After few days of evaluating the Chalk line Protractor, here are our proposals:
Proposal 1.
Term 1.
We will pay USD3000 as down payment and USD5000 after we get the patent. (USD8000 in total)
Term 2.
If the product is unpatentable, we will pay another USD2000 for buying the idea. (USD5000 in total)
Term 3.
We will pay for the tooling and all the production cost, along with the application fee for patent in Taiwan and China. You will be the inventor while we will be the owner of the patent.
Term 4.
For the deal you close, you will get 6% for each unit sold, including “Company Name” and the UK distributor TCL; while 3% for all the other transactions.
Term 5.
In case of less than 50,000 units sold in 3 years, the commission will be 3% for each unit sold to Company name, the UK distributor name and the deals closed by you, and 1% to all other transactions.
Proposal 2.
Term 1.
We will pay USD2000 as down payment and USD3000 after we get the patent. (USD5000 in total)
Term 2
If the product is unpatentable, we will pay another USD1000 for buying the idea. (USD3000 in total)
Term 3.
We will pay for the tooling and all the production cost, along with the application fee for patent in Taiwan and China. You will be the inventor while we will be the owner of the patent.
Term 4.
For the deal you close, you will get 10% for each unit sold, including Company name and the UK distributor 2; while 5% for all the other transactions.
Term 5.
In case of less than 30,000 units sold in 3 years, the commission will be 5% for each unit sold to Australian, the UK distributor and the deal closed by you, and 3% to all other transactions.
We are aware that our buy out term is different from what you have in mind, but please understand that with us paying the tooling and patent application fee in order to ensure the rights, we’re having certain level of risk involved in the product. Company name will need to sell at least 40000 unit to break even and even more for the other proposal. Hence, we sincerely hope we can both sacrifice some for the future goods.
If you wish to amend the summary of our proposal, please make amendment and we will revise the terms.
Once we reach agreement on all the terms, we will provide the contract for you immediately.

[dtpater]

The Patent:  http://www.freepatentsonline.com/D610925.pdf

The Product: http://www.youtube.com/watch?v=Q3U9F8mt9CM

Going into the Europe Market early next year, this new product already owes me zero, its all profit already
 

[MYK]

Congratulations!  It's very difficult to get that far.  I hope it works out well.

However, I don't understand why they obtained a design patent on the product, since it would be trivial to change the ornamental appearance while still getting the exact same function.  Knock-off manufacturers already understand that, believe me.  Are applications still pending for utility?

I was surprised the Taiwanese manufacturer went through a U.S. patent attorney rather than using one of the many Taiwanese firms.

[dtpater]

Hi MYK,
           We had some real concerns about prior art for the utility Patent in the USA, being successful (The process is also to slow for this product), also the design Patent was approved fast in 9 months (very helpful for the U.S Retail Chain Buyers Mindset to place orders), also the China and Taiwan utility Patents are in the system also, what happens at trade shows is manufactures are always giving warnings to each other for Patent breaches, well once they have an approved patent in their hands.

I suggested the Design Patent to the Manufacture in Taiwan due to the situation, once they had the approved Design Patent they were very happy, this is a hybrid of two products that have a good proven market already!

The slow process of getting an approved Patent in the USA, is proving a big bonus for China Manufactures, who put Patent Pending on their new products even if they know the application will fail, because this buys them 2-4 years of sales, hit and run method (this is what some try), get sales then get out, I also believe there is a tooling detarant with some new products, so basically due to market size and tooling costs, its not cost effective to copy some new products, with or without Patents.

For a Taiwan Manufacture to lodge and have both a Taiwan and China Patent approved is quite cheap they said from their end, and yes so far the companies in Taiwan I deal with prefer to go through a U.S Patent attorney.

http://www.youtube.com/watch?v=0zDdWrjJ3_M&feature=related

For the Stair Square a very different story, the Taiwan Patent attorney said to me the first claim would lock everyone else out, due to this being the first Stair Layout tool with an adjustable Margin first setting and then working methodically down the new tool for setup.

Picture this last year July 2009 sitting down with the Taiwan Manufactures Patent attorney working out the claims for my Invention,
thats a very nice place for an Inventor to be.

What they did was two lodgment's (China and PCT through China) and (Taiwan and USA through Taiwan) I signed the assignment for both upfront (In Good Faith) and we finalized the verbal agreement (Brokerage and Development Agreement) afterwards

Business in Asia is about Friendship first and Business Second, I was treated very well in Taiwan.

 

[MYK]

Business in Asia is about Friendship first and Business Second

I spent two years in Taiwan.  If you believe this, you were successfully deluded.  I hope they at least took you to Alleycat's a few times.

[dtpater]

Nah,
      Not deluded, the below manufacture paid me out right for another Invention, it all about research on the Manufactures in Taiwan,

Its about changing the mindset for the Assignment business method, I work with 15 Manufactures in Asia that I have carefully selected.

We already have interest from a large importer to the USA, who this manufacture supplies, create the supply chain before the product is even Licensed, so Manufacturing and Distribution are in position from the very start

Already looking forward to my next trip back to Taiwan

Hi Derek;

 

       Our R&D have make the planning to make the prototype in Sept and finish the life time striking testing in Sept. So we will update the static on end of Sept. If there is no problem on the testing, we can start to talk about agreement in beginning of Oct.

 

        So we keep you updated in middle of Sept, and at end of Sept.

 


Best Regards;
 

[fb]

The slow process of getting an approved Patent in the USA, is proving a big bonus for China Manufactures, who put Patent Pending on their new products even if they know the application will fail, because this buys them 2-4 years of sales

This is probably the process I will need to go. The shelf life of the product is short (better designs are already being tested), and is already starting to sell. If I can get a good 3 years of sales with no competitors, I'll be happy. Also, being a hobby non-industrial product, the expected profit is not high. So even if a patent could be issued in a week, I'm not sure it would be worth $10,000 USD. With this in mind, maybe I should use a low cost service to bang out a no-frills app with no claims, knowing it will not issue.

[ManOfManyBadIdeas]

It looks like the poster was able to find the manufacturer for his invention(s) in Taiwan,
which I think is great. I think that these days most manufacturing is done in China or
thereabouts anyway, so might as well talk to the manufacturers directly. One thing is
clear, having a patent means jack squat. Getting a manufacturer to take on a new
product is a task in itself. But one thing really sounds fishy - signing off the invention
"in good faith"? Going into negotiations with anybody, whether it's US or China, one
has to be aware of the legal side, and your options when enforcing any agreement. After
you have signed off the invention, anything they give you is just charity from their side,
you've lost all the leverage at that point. It's possible that you've encountered some
sort of an honest businessman in Taiwan, but I am very skeptical those species still
exist in this world.

[dtpater]

I think this is the real problem in business (Showing Little Trust upfront), I have found 15 honest businessmen in Taiwan and China.

The reason I signed the Assignment first, was a test and I passed (Honor and Friendship), we had already agreed on the terms of the agreement,this link below will be helpful to give you insight into this, it was a matter of being practical, the contact was not ready, things can be done backwards, the problem is our schooling does not Teach this, and getting out of our comfort zone, Inventors are welcome to pay all patents and tooling, but not this black duck.

Fortune Favors the brave!

This is a starting point to understand the Asian cultures, the way of the West is very litigious and anti-productive, I worked for a business in Melbourne owned and run by Chinese for 2 years (Staff mostly Chinese) and it was a very positive experience and the owner is my business partner in my first new product, which is brilliant for guidance

http://chinese-school.netfirms.com/goldenhints.html

http://www.associatedcontent.com/article/391443/the_concept_of_face_in_chinese_culture.html

[ManOfManyBadIdeas]

Thanks for the link. The link says that a contract means little to the Chinese. In
that case you may have a point, but it's a different point. If a contract means
jack squat, then using verbal agreement is the same. I say the same because
verbal agreement also means jack squat. So if you think that you have
a relationship with the other side, by all means make a leap of faith. But be
prepared to land on cold hard concrete if it so happens that your impression
was a "misunderstanding".

[dtpater]

Man of many bad ideas,
                                I will keep you updated on the progress of the 16 new products I am currently taking to market, order's are placed for some and others are working through the process.

I have a red hot new contact (Last 4 weeks) who has taken 2,500 new products to market in the last 23 years worldwide through Asia, he is looking at 6 of them, because distribution is is already in place for the other 10 I handle.

Consider the value for me working with someone of that caliber when it comes to new product development and new product marketing and distribution, the last 3 years I have learnt at tremendous rate and expect the same for the next 3 years!

So if I get royalties based only on an e-mail and get paid what does that mean

When the Asian Manufacture ask's for my banking details with the swift number what does that mean

Also note: I do have an Asian Account (Taiwanese National) who specializes in royalty audits that are covered in these agreements

Personally I avoid going to U.S Companies direct because it has not been a good experience for me, they work to erode an Inventors faith in their new product, or as a past experience tried to dictate terms to myself and the Taiwan Manufacture for 30 days and are to slow to move forward, small distributors are much keener and pro-active, also large companies have to much middle management that bogs down the process

 

 

[dtpater]

Here are some great links below for Inventors to read:  having the right Mindset, Inventors can be their own worst enemy:

I remember a brilliant website that is full of all these issues, currently looking for it!

Link below for these comments:

ANSWER from Ed Tutle, inventor & licensing expert
Your fear of being taken seems to be excessive. Unless you can afford to make and sell, you will need others to help you. You express the opinion that you have some thing that everyone needs and will be cheap to make. You can only make such assumptions if you are expert in the business trade your product would be marketed. If it has such universal appeal in must be a mass market item and will take a lot of investment capital to make and sell. Do you have an idea of what it takes Gillette just to introduce their new razor into a mass market?

To be brutally candid, you are not ready to do business as your attitude will allow you to be taken by someone who will size you up, and give you words you want to hear.if what you have is as good as you think it is. I occasionally get people coming to me with your attitude and I tend to send them away, as there is little anyone will tell them candidly, that they will believe.

If you want to be credible, you will have to provide non-enabling information about your idea(s), so that people can get an idea how to be of service. Go back and learn how to sell your ideas and know your market. You will then be able to know if you are dealing with ethical people! Not all out here who might be helpful, are unethical.

http://www.inventorsdigest.com/?page_id=182


Passive vs. Proactive Inventors

There's a widespread misconception most likely due to Ralph Waldo Emerson's famous quote, "Build a better mousetrap and the world will beat a path to your door.", that once you invent it, the rest is easy. But instead, it's more like...

"Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats."
Howard Aiken (1900-1973) Pioneer of the Computer

The reason for this is that fear of change is just part of human nature. Since companies are run by people who don't want to lose their jobs, it follows that companies may be hesitant to try out new things that may be untested and risky. Yet, ironically, companies need to keep up with the changing times, and new products can help them to survive. So you may find companies that are initially hesitant to look at new products, but that ultimately realize that it's an opportunity for their company.

So even if a product has true potential, the process of licensing or selling it may involve rejection, and requires a lot of persistence. That's why I believe that inventors need to be proactive in their approach to inventing. Inventors not only need to seek out companies, but also to find venues where they can be found by companies.

Yet from my experience talking to thousands of inventors over the past two decades, all too often, many inventors get a patent or patent pending and then just sit on their idea, hoping that someone will come along and magically discover their invention. Well, they end up sitting and hoping for a long, long time!

http://www.inventionconnection.com/buybooth/

• Focus on patents
Don’t overly rely on patents. Patents only give you the right to sue, and rarely prevent others from selling a product that’s just like yours. Remember that patents can take a few years to issue, while many products will have come and gone in that time. Even if you have an issued patent, it can take millions to defend it, money better spent on your next product. A small company in the right can be put out of business by a large company with a big legal department.

http://www.yankodesign.com/2009/05/19/the-top-10-mistakes-inventors-make/

[ManOfManyBadIdeas]

Heh, you are not arguing against what I am saying, but something you made
up. I am not advocating being overly secretive, there is very little reason to
do that if the patent application is filed, and you are not disclosing much more
than the patent covers. Nor do I advocate being greedy when negotiating a deal
with a manufacturer, they are incurring expenses and are taking a risk and
as such deserve a fair share of rewards. However, I am cautioning against
negotiating before the patent is filed, or signing off all the rights before the
contract is worked out, that is just plain stupid, there is no other word for it.
To use the great Aitken quote, you may spend your time and energy ramming
your product down people's throats(yes, that's something that an inventor should be
prepared to do) but you'll likely end up with nothing if you ignore the legal basics.
Your experience might be different as you admit that you have partnered up with
somebody you already knew for a couple of years. Most people you can trust
with the legal basics in place (overwhelming majority), a few people you can
take at their word (overwhelming minority). But you really shouldn't present
an exception as the rule.

By the way, the advice that you picked from the link is perhaps the least helpful
of the bunch, there is a ton of more informative advice on that page.

This of course YMMV, if the product is only going to sell for a couple of years
and/or isn't really patentable then it's a whole different ballgame. I would be careful
to call it an invention, not every product idea is one.

[dtpater]

Man of many bad ideas,
                                Thanks for your comments, the real value here is the insight into the different methods (Arming Inventors with options and insight), of getting products into the market place, I will say the last 2-3 years have been hell for me, due to the world money markets but it is all starting to change.

from my personal first 6 new Inventions, 1 has failed (dumped at a low cost of $1,000-), 3 Licensed under assignment of Patent rights and tooling paid for by Taiwan manufactures, 1 sold outright and this last one still working on the Tilt Level, link below

http://www.youtube.com/watch?v=hCMA2pdiNGk

I had 3 quotes in China for the tooling, $45,000- to $50,000- for the 3 different level sizes, 1200mm,900mm and 600mm

Last year I showed the buyer from the largest Hardware Chain, he said yes lets go through the process of knocking another Level off the shelf, due to that the Australian Importer wanted pricing, due to our market size here it is not worth it here in Australia.

Currently I am talking to a China Manufacture, the Tilt Level I am looking for the lowest price point option, I also know this new design could be placed at only $2- more for the say Standard plastic levels at retail.

So here I have the reverse problem, retail buyer says yes, importer say yes also, just trying to find the right manufacture, to carry to tooling risk at least, so I went more the traditional way, well partly.

 

My first Invention the Roofing Protractor below:

http://www.youtube.com/watch?v=RQjSYQvsI4s

http://www.freepatentsonline.com/7739806.pdf

Here is some real tough insight, I do consider this one the learner Invention for me, also honestly it did take me 12 years until I got the design right.

I always had the Mindset that I would not pay for Patents, so for 12 years it was a trade secret never made public, once I found the Taiwan Manufacture, we did the deal by e-mail, and I said for a bit of fun come and see me in Melbourne, guess what they jumped on a plane and spent two days with me, my Chinese business partner organized the License agreement, it was a very standard agreement with assignment rights also

I gave them 12 years work from me on a hand shake (all prototypes,the whole cot and cobudal), they signed the contract and returned 3 weeks after returning to Taiwan, yes I started to sweat about it 2 weeks in.

Due to my actions yes it has taken forever, 16 years from 25 August 1995 to Feb 2011 for Europe, but there are 9 Patents and they all have at least 18-19 years life left in them still.

I will start the final artwork for the Roofing Protractor and branding for the Dutch importer in the next 4-6 weeks with my designer, I also organised the exclusive distribution agreement with the Taiwan manufacture and Dutch importer for Europe,so with about 6 inventions, I am marching them all the way over the line to the market place and shifting the risks onto manufactures and importers, which all comes back to the level of interest in your new product once again.

My Sapper training in the Australian Army (5 years) has also helped greatly (Strategies) and past sales experience with different jobs and market researcher also for a year!

So this is a very tough game, getting new products to market and not going broke in the process.