Tips for Inventor No: 47/52

Tips:-

To commercialize your new invention the 1st option you have is to sell your technology out-right to an interested party. You will receive a pot of gold. This is every inventor’s dream but it is hard to come by though

Essence:-

By selling off the intellectual property it means that you have surrendered all your rights to that invention. There after you don’t own the patent anymore. Along with it you have also given up the ownership of the technology, the design and all relevant matter that potentially could be created into an intellectual property. 

?Sell Your IP out-right

In the previous article, we have discussed that there is a possibility of having 5 options to commercialize your invention. And in this article, we shall discuss the first option, which is to sell off your intellectual property rights to someone who is interested.

That someone I'm referring to can be either be a company concern who are already in that sort of business and needed your invention to boost their business and expand their market share.

Then on your part, you must realize what you are actually going to give up. You should make no mistake because after you have sold off your IP out-right, you no longer have control over that business anymore. Therefore, I would suggest that you take a step back and think carefully about what exactly you are selling off. When you decide to sell your invention, it means you are surrendering the ownership of the intellectual property to someone else. You have given it up completely and it's irrevocable. You can't go back and say to the buyer you want it back because you are passionate about the technology that you have developed. It's game over for you. You take your money and go.

But on the hindsight, maybe that's what you want because you get paid a lump sum of money. With that huge amount of money, you can move on and create the next big thing. I'd like to say here, creative people never run out of ideas. That's food for thought. So, perhaps giving up that idea is not so bad after all.

It all depends on what you want to do with your life. Whether you want to be an entrepreneur and be the next Malaysian Mark Zuckerberg, or you want to grab the money and create the next invention. It's all up to you my friend. It’s your call.

As for me, I would like to sell off my invention if the opportunity comes. If someone that has a thick wallet come knocking at my door and said that he wants my invention. Then I would be glad to let him have it because I would love to have a pile of cash for my next project. But in reality, finding someone to pay me a lump sum of money for an untested product is a slim chance. Not many people are willing to invest a huge amount of money for a product that does not have any track record and no brand name. So this first option about selling the IP out-right remains a hard thing to come by. The probability is there.

Nevertheless, I would also like to stress that it is not entirely impossible for this to happen. I've one experience on this. This invention is not mine but belonged to my good friend Mr. Lim (not his real name) who is a school teacher. The invention involved a whiteboard with audio. It's a kind of a whiteboard for writing as well as a board for you to place pictures and graphics. This board is suitable for classroom and is used as a teaching aid for students who are learning to pronounce certain words for the first time. This board is able to record the voice of the teacher. It allows the students to play back the teacher's audio during class so that the children could pay attention to the pronunciation. It also allows the student to record his own voice and compare it with his teacher's audio until he (the student) gets his pronunciation right.

Mr. Lim approached me to help him to commercialize this invention. I finally closed this deal for him and sold it to a company for a lump sum price of RM50,000. Mr. Lim asked if this sum is a reasonable sum. Lim had earlier asked for RM100,000. Without hesitation, I told Lim to grab it because I thought RM50,000 is a fair price for the investor to fork-out. Besides paying Lim this money, the company also require to invest about a Million Ringgit to open plastic molds and dies to manufacture some of the components. The company also need to pay other parts to make this audio board work. They also need to invest in a factory to assembly this audio board. And they have to invest more money and time to market this new product. They have to do a lot of promotion and demonstration to their targeted market segment which I know is not easy.

So I thought it is fair for Lim to take the money on the table. I told Lim it's a good deal for him. The amount of time and cost he invested to make this prototype is marginal. Lim is a full-time teacher. So it's wise to take this offer.

Yup! It was a done deal after just two meetings. One was with the boss and one with the investor's IP lawyer. I'm glad I was able to help Mr. Lim to close this deal. He was a very happy man. Later he brought me to lunch which I enjoyed every bit of it

I hope this little story has given you some inspiration. Success occurs when your dream gets bigger than your excuses.

In my next article, we shall discuss the second option to commercialize your invention through Licensing. This method is my favourite and it works perfectly for me. In fact licensing model is the most popular model of all method that is practiced by inventor around the world. Make sure you come back next week to see how it works.

Be cre8tive selalu

Bugs Tan Ph.D

Inventor