Questions

Me and and my partners are the inventors of a new handtool. We presented it at a competition at our University and placed well (top 4 out of 30 teams) and got alot of great feedback on the tool and even had some industry people tell us they'd buy it if it were on the market. It was to my belief due to conversations we've had that the goal was to try and to try and license/sell the idea/prototype/etc off. We got a provisional patent and procured the help of some great engineers to develop the product even further and make an even better prototype. Now, one of the partners has brought to the table of use procuring investors and trying to take the idea to market (that means manufacturing, molds, sample orders, patent, etc). This ride was not one I was interested in or planning on taking. I'm an internet/online/ecommerce entrepreneur, it's where my experience and success has been. The handtool market is not one I have experience or knowledge and neither do I want to. They know I'm not really interested in going further as they plan and it's been brought to the table to me for me to cashout my % when they get investors.

First, please understand that you didn't "get" a provisional patent. Provisional patents are simply filed. They are not examined, and there is nothing to grant. All they do is establish a "Priority Date" enabling you to cite the filing in "Related U.S. Application Data" if and when you file for a utility patent (which, in due course, will be examined). Further, if you do not file within 12 months of the date on which you filed the provisional, your application will be deemed abandoned and you lose that priority date.

Second, when industry people said they'd buy it, did they tell you at what price? Because without a price range, their statements, while earnest, mean nothing. Even if they knew the price, is that price sustainable and achievable based on fixed and marginal manufacturing costs? I don't know and neither do they.

Third, you're correct that since you don't know the handtool market, and you have no desire to, you'd be crazy to stay involved. Nevertheless, if you were an inventor, why should you be cashed out now? Why shouldn't you hold on to a percentage for your contributions to date? I'm not saying you get the same share as the other co-inventors, assuming that, if they even get investors, they remain on in a meaningful capacity, but certainly you should get some share, representing your contribution to date. I also don't know how much time you have left before making a go/no-go decision on the provisional-> utility.

Further, if all of this comes to pass, how are they going to sell it? If it's via e-commerce, rather than through traditional sales reps, WDs, and the like, then perhaps there is a role for you. Not enough information to say, but certainly a consideration.

Bottom line: this product is certainly not assured of success. If you can be handsomely cashed out, you may very well want to take it. If you can't be handsomely cashed out, why should you accept nothing? You have the leverage and, depending on how much time you have left until the provisional expires, you may have time. If there's very little time left and you truly believe in the value, and you're willing to risk the $10K-$20K needed to patent this device, then list your co-inventors, cite the provisional and have an attorney write/file it.

You may say: What about the rights of co-inventors? Here is where US Law becomes very strange. See: http://ladas.com/rights-co-owners-license-patent-rights/ -- but by all means, consult an IP attorney -- this is just so you know the basics of your rights. But basically this means that if you did file a utility patent, you could, without any other co-inventors' permission, sell to a different entity than they! Confusing? You bet.

Last, while your post is professionally worded after the first sentence, please, for your own sake, never in writing should you, as a businessperson, use as a subject the egregiously wrong grammatical construction "me and my partners" (obviously, it's correct as an object). If you're going to be negotiating for equity or a cash-out with investors, you can't sound like a high school student sneaking a smoke in the bathroom. My partners and I -- impressions count -- and ell the more so when the error is the first thing I read or they hear! Someday you'll thank me for the tip even if you think I'm an ass for pointing it out.

Good luck.


Answered 5 years ago

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