Let’s start at the beginning. In this post, I’d simply like to set the stage for my adventure so you know where I’m coming from and why I would agree to do this work. Right out of law school – fresh-faced and doe-eyed – I worked for a start-up. We were going to change the face of the monetizing intellectual property market. What the eff does that mean?
It means that we took inventors’ ideas – whether patented yet or not – or companies’ portfolio of ideas and we found people to license those ideas in non-competing markets. So, you have a widget and you’re selling it to the avid widget market. We take a look at all of your widget patents with fresh eyes and see that your widget could also be used by gadget makers who sell to gadget consumers (a non-overlapping market). We create a business case after performing some market analysis. We find gadget makers. We present to them how this widget could increase their revenues if only they would license it from widget maker. They sign the deal. We get a cut of the royalty rate negotiated.
Sounds like a pretty sweet deal for all, doesn’t it?
Here is why I believe we failed:
1) We did not do a good enough job creating the business cases.
2) We did not go after potential licensing partners with the ardor that we needed to go after them with.
3) We did not have an adequate screening process for the patents that we accepted.
This process is not easy; it’s a lot of work. However, as my business coach is fond of saying, “I’m not saying it’s going to be easy; I’m saying that it’s going to be worth it.”
What’s Happening Now:
Two individuals have found me with innovations related to the energy industry. One individual has a patent granted; the other individual does not have a granted patent – only a provisional patent.
Person 1 has gotten a formal, independent valuation done before coming to me (good!); however, it is a mechanical device with no prototype. Why does this matter? Buyers will have to invest their own time and energy doing all of the research & development to get this puppy up and running.
Person 2 only has the provisional, but he has actually been using his idea in commerce since applying for the provisional. He knows that the idea works in real life, it will not require a large investment by the buyer, and he came to me with interested parties already lined up.
So, this speaks to #3 above – my screening process. These two people have come to me with some proof that their idea is worth something. The proof does not guarantee success, but it provides a jump-off point.
#2 above – pursuing potential licensing partners: I have a plan that involves calling, pestering, bribing with lunch/coffee, and emailing until I’m blue in the face. I have made the commitment to do what it takes to create opportunities for these two clients. This is my first step – I will find people related to and/or working in the specific markets that these innovations benefit. Then I will talk to these people and use any information gathered to narrow my target market(s).
#1 above – the business case: Since my days at the start-up, I have worked in corporate finance, gotten a business coach, done a lot of business research, and watched a lot of Shark Tank (joking…sort of…). I have a much better idea of how to structure and write a business case. Additionally, after writing extensive business cases for the above, I will get these business cases looked at by people so that they can be ripped apart and rewritten. The valuation does not substitute for a business case.
In subsequent posts, I will discuss the business case writing process in more detail (pitfalls, tips, etc); I will talk about what sorts of people I am meeting with; I will talk about what the responses have been like and how I am using that information; and anything else that I learn or come across along the way.
I hope it’s helpful to all you idea people out there to hear the journey of making money off of your ideas. Please remember that this is just a documentation of my own journey. There are different ways to do things and nothing in here is legal OR business advice. If you think you have a better way – I’m always open to ideas.
I want to add that I don’t plan on this being patent-centric. Look at the NFL – they make tons of money off of licensing trademarks/brands. Intellectual property is not just limited to patents – but includes trademarks, trade secrets, and copyrights. For copyrights, think of sampling older songs – sampling can be a form a licensing.
For People wondering “Who the hell is this person?” A little historical perspective:
Before I opened this law firm business with my husband and before I was an attorney, I was a chemical engineer for the Oil & Gas industry down in Houston, TX. It was a natural progression for me – I grew up in the energy industry. My dad worked for Oil & Gas. I have lived in Alaska, Houston, Saudi Arabia, and Norway – an oil brat. I have socialized with Oil & Gas people my whole life. Most of my friends from the University of Texas work for the energy industry in some capacity. In law school, I worked for the Tulane Environmental Law Clinic challenging industrial plants for violating their permits (air and water pollution stuff mostly). I am interested in a future that incorporates other energy sources; however, I also have an understanding of the past and current state of the energy industry.