You may have filed a patent application for a lot of reasons.  Principal among those reasons, of course, is to protect your intellectual property.  If you are an independent inventor you will have a personal interest in the successful implementation of your IP.  By creating a patent application or getting an issued patent you also advertise your IP and may attract interest in it. 

So, what if someone calls?  Here are some tips based on our own experience:

·         Be prepared

·         Listen more than you talk

·         Do your homework

·         Get help

Be Prepared

Once your patent application is published or once your patent actually issues, it is out there for anyone to see – interested people or organizations may either stumble upon it or may be actively looking for it.  When they call, you should be prepared with a fairly clear idea of what your goals for it are.  Clear but flexible goals are a tremendous source of negotiating strength.

Decide in advance if you would be interested in developing or marketing your invention with someone else, licensing your patent to someone else to develop your product,  or outright selling your patent (for the sake of simplicity, when we say “patent”, we mean issued patent or pending application).  When someone calls, one of the first questions they will ask is: Is it for license or sale.

Some possibilities …

You may not want to license or sell your IP to someone else if it is to be an integral part of a business or process you already own.  But, what if your IP creates a broader interest and value in your business?  Would you consider licensing your invention and, in effect, create a competitor?  Only you can know the answer to those questions and what you know will affect how you react to an inquiry.

If you are interested in or expect to need help in development and marketing your invention, than be prepared to address how others might be involved.

·         Maybe you are looking for many partners and, therefore, interested only in non-exclusive licensing opportunities? 

·         You may anticipate that your personal involvement would be necessary to get the most success from your invention.  For example, you have some specialized knowledge or the research you have already done on implementation adds value.  So, maybe you will need to emphasize that your continued personal involvement is something you desire and think necessary. 

·         Maybe you’ve moved on to bigger and better things and have no real interest in pursuing the commercialization of the invention.  Then an outright sale may be what you are looking for. 

You should also be prepared with a clear idea of what information about your invention’s status you are willing to share in an initial conversation with someone you may have never met.  The key is to know what information your caller is going to need in order for both of you to take the next step and what information is best left for later when you have a secrecy agreement in place. 

Which brings us to the next point:

Listen more than you talk

Most inventors love to talk about their inventions.  This can be especially true when they receive an unsolicited call from someone else expressing interest and even a willingness to pay for rights for the invention.  It is far more important to your ultimate success, however, to listen and ask the caller probing questions in order to determine the basis for the caller’s interest in your invention and what in it is of value to them.  This will help later when talking royalties or price.

At a minimum, you will want to be sure to get the caller’s basic contact information for a follow up.  Exactly what sort of rights do they want or need?  To what extent do they plan to invest in the further development of the idea?  What do they see as the prospects for your invention?  All of these will help you get a better idea of how to structure any sort of licensing arrangement or even if they are the sort of organization you want to do business with.

Do your homework

If the first call goes well and a follow up call is planned, then it is time to “hit the books”.   As Gary Karrass explained in his influential book “Negotiate to Close”, your goal is to “build a profitable deal that sticks”.  In order to do that, you need to know as much as possible about the interested party and what value your invention will bring to them.  You need to know what their agenda is as well as you know your own.  You can then structure the deal that will be profitable for both.  You need to have answers to the questions:

·         How large is their organization? 

·         How does your invention fit into their strategic goals? 

·         Are they under any time pressure? 

·         Do they have the capability to actually bring your product to market? 

All of these questions can be addressed through diligent research and consultation with experts in the field.

Which brings us to our last point:

Get help

 Inventors tend to be innovative, do-it-yourselfers.  But don’t try to re-invent the wheel! Unless you are a seasoned negotiator your chances of success are greatly diminished if you try to go it alone.  An inventor’s great strength in inventing is their personal commitment to the invention.  “Personal commitment”, however, can be a significant liability in negotiation.  In business negotiation you always have to remember that “it’s nothing personal, just business”.  This is where a negotiator / broker/ consultant can be so valuable.  It may be your first patent negotiation, but it’s not theirs.  They know how the game is played. 

Together we have experience providing services in connection with patent licensing for clients on both the buy side and the sell side.   We would be honored by any of our reader’s inquiries to help with their particular situations.  Other organizations that can be of help include the Licensing Executive Society, and SCORE.  SCORE, in particular, is very helpful for those on a very tight budget.  It provides retired executives as business counselors to small companies at no charge.  They have local chapters around the country.  If you are limited in funds, it’s a good place to start.  

It’s very exciting when an unsolicited call is received by a party looking to potentially license or outright purchase your patent.  Once your patent is out there, you should be prepared with an idea of how you would respond to such a call.  When the call comes, you should strive to listen more than you talk.  If it looks like a follow up call is in order, you need to do your homework on the other party.  And, as negotiations progress, you should seek out professional help to keep the focus on what is good business for both of you and your potential licensee.