Test Demand For Your Invention Before You Patent

Do you actually know if people will want to buy your invention?


Many inventors are convinced of the fact that their invention is so amazing and clever that people will be absolutely compelled to buy it.


Unfortunately, that is not the case. Brilliance does not equal marketability. Your product may accomplish exactly what you say it does, but for one reason or another, it may simply turn customers off.


A few years ago, the Wall Street Journal published an article about Thanksgiving-related inventions. One particular inventor, Bryan Hirokane, patented a process for completely deboning turkeys so that the meat can be eaten as a meatloaf style dish that was quicker to cook, and easier and cleaner to eat.


But despite the fact that Hirokane clearly did his due diligence in the patent process—and spent $10,000 in attorney’s fees in the process—he hasn’t come close to turning a profit in the decade since his patent was issued. He has tried various avenues for selling his process, but to no avail.


The lesson from Hirokane’s misfortune is this: The best way to determine whether you should patent your invention is by trying to sell it. The rule of thumb is, if you can get to a point where you’re generating $100,000 in profit per year, then you’ve almost certainly gotten past the flat part of the S-curve, and have a product worth patenting.


In the process of trying to sell your invention, you’ll find out WHO wants to buy it. This can aid in marketing down the road, when you’re ready and able to invest more money.


A note: If you’re having trouble hitting that $100,000 mark, but you truly believe that you’re the exception to the rule, reputable invention marketing firms like Lambert & Lambert offer evaluation services for a small fee that will give you feedback on the potential profitability of your invention. However, only go this route if you’re prepared for the honest truth. Such firms make the bulk of their revenue by offering licensing agreements in which they make money from royalties (rather than from fees paid by the inventor), and thus take a very blunt-nosed, practical approach to determining the marketability of inventions.


Be Skeptical of Invention Submission Firms


Information made public in recent years indicates that very, very few inventors make money from the service of invention submission firms. Such firms don’t derive profits from invention royalties, but rather, from the up-front fees paid by inventors themselves.


In the late 1990s, the FTC became fed up with the invention promotion industry, and launched “Project Mousetrap” in a concerted attempt to take out the industry’s worst offenders.  One such company, described as a “typical invention promotion scam” by the FTC, was compelled to settle with the FTC in 2008 for $10 million.


As part of the settlement, the company was compelled to continuously update a public disclosure statement detailing various aspects of their business. Among the items that the company must publicize is the number of consumers who have signed an agreement with the company in the last five years, and the number of clients who have made more in royalties than they paid out to the company.


As of August 22, 2016, An Affirmative Disclosure Statement posted by the company states that 60,866 inventors have signed an agreement with the company in the last 5 years. Of those clients, SIX have “made more money in royalties than they paid, in total, under any and all agreements with [the company].” If you do the math, .00986% of their clients—or 1 out of 10144—have made enough in royalties to pay off their bills with the company.


Producing a Test Run of Your Product


Once an inventor is on board with the idea of doing a test run of their product, the immediate follow-up question is, “Who’s going to build it?”


Many investors believe that tracking down a Chinese fabricator is the best bet, thanks to the extremely low cost per unit. The problem with this is that Chinese factories have minimum build runs in the tens of thousands. Yes, they’ll be able to manufacture your product for cents on the dollar. But then you’ll have to pay the cost of shipping your product back over to the United States, and will be responsible for paying the significant inventory holding costs, which can often outstrip the initial manufacturing costs.


Instead, find a local manufacturer who is willing to very small fabrication runs of a few hundred units. It can take a little work to find the right manufacturer. Sites such as QualityTrade, ThomasNet, and Jobshop can help you track down local manufacturers. Another route is to stop and think about the processes necessary to build your invention, based upon the materials used. If it’s made out of metal, do Google searches for local metal forging and stamping shops. If it’s wood, look for carpenters and machinists. If it’s made entirely out of plastic, a casting, extruding, or 3D print shop might be the best approach. Be creative. You may have to work with multiple businesses in order to get your product produced, assembled, and packaged.


But above all else, only work with businesses that are within driving distance. I have worked with clients who attempted to have their inventions manufactured by a firm on the other side of the country, only to have the manufacturer run into an issue that required hands-on intervention. Additionally, it’s much easier to ensure to address quality issues when you can confront them face-to-face and hold them accountable.


Incidentally, for a fee, many local manufacturers will, for a fee, write up detailed machining instructions that can later be provided to large-scale overseas manufacturers, when the day comes to expand your manufacturing capacity. This helps to ensure that these larger manufacturing runs will turn out right the first time.


But Won’t My Invention Get Stolen if I Sell It?


Many clients balk when we suggest that they try selling their product, before they bother with patenting it. They immediately envision that some keen-eyed vulture will see the genius of their IP, rip it off, and make a fortune selling knockoffs.


This isn’t the case. Practically speaking, a product needs to make about $1 million dollars before someone will bother trying to steal your product. Below that point, it simply isn’t financially feasible. The reason for this is simple economics: In order to hijack market share, a knockoff product has be able to come into the market at about one-third of your product’s original price point. This means that if you’ve grossed $1 million, a knockoff manufacturer might be able to make about $333,000. Anything less than that amount won’t justify the cost of reverse-engineering your product, getting it manufactured, and marketing it.


This kind of theft is very rare. So fantastically rare, in fact, that it makes national headlines.


In January of 2016, U.S. federal marshals showed up at the Consumer Electronics Show—a Nevada-based tradeshow that is one of the largest tech tradeshows in the world—and raided the booth of Changzhou First International Trade, a Chinese company marketing a one-wheeled hoverboard called the Trotter. Changzhou was accused of ripping off a very similar hoverboard, Onewheel, made and marketed by Future Motion. Future Motion’s board costs $1,499, while Changzhou sells its board to retailers for $500 (exactly matching the one-third price rule mentioned above).


However, even this seemingly clear-cut case of IP theft became much more complicated when, a month later, Future Motion dropped the case against Changzhou, prompting the Chinese company to sue for $100,000 in legal costs and damages.


We only refer to this complicated incident to illustrate our original point: invention theft is extremely rare. It happens, but not very often. For the purposes of due diligence, here are two things you should do when it comes to selling a test run of your invention:


  1. File a provisional application for patent early on, if there’s evidence that your invention shows promise. This will give you a year to learn more about the marketability of your product, while quickly establishing some patent protections.
  2. Make sure to actually create and sell your invention. Don’t just talk about it. In this case, someone can easily steal it, and will be more inclined to do so, because they will be able to sell at the top-tier price point, rather than having to undercut an existing product. Additionally, in this circumstance you’ll be hard-pressed to establish yourself as the inventor in court, as the person who ripped you off will likely have far more documentation than you.











Need an Expert?