Posts Tagged ‘profit’

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Danie Roy

Although I’ve been declaring the end being near for the much-disliked copyright troll Righthaven, a judge’s order requiring the firm to surrender all of its copyrights might just be the final nail in the coffin. Maybe. Finally.

Since Righthaven’s business model consisted of “acquire copyright, threaten, profit,” the loss of its copyrights prevents the second and thirds steps.  Allowing the cases to go to litigation wasn’t part of the plan, and never ended well for Righthaven.  In fact, Righthaven’s court losses got them into this pickle.

See, going to litigation can be lucrative… hundreds of thousands to millions of dollars could be up for grabs.  But, it’s a bit like playing Russian Roulette… if you lose, you pay, whether you brought the complaint or were the accused.  Righthaven’s business model, didn’t bring in the BIG bucks, but it was steady and relatively reliable income.  Most people would rather throw money at a problem than face it in court, but once someone does fight back, the results are a bit like the scene in The Chronicles of Riddick where one Vin Diesel threatens to kill a bully with his teacup and follows through: the bully is left shocked, humiliated, and dead.  Sound familiar yet?

There are a few lessons to be learned here: the first is that Grandma’s fine China is a deadly weapon.  The second is that fighting the troll works if the law is on your side.

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Danie Roy

What is invention? When you’re in elementary school, it’s a solution to a problem. As you get older, you realize it can also be a better solution to a problem. Even older, and you simplify down to just “innovation.” But what is innovation? I would argue that it is staying above or driving the technological curve. After all, building a better mousetrap is nice, but cyborg mice is just so much more interesting! (Plus, EMP guns would make the best moustraps, then!)

I bring this up because there seems to be a big freakout about copyrights and 3D printers.  The freakout should really be about patents and 3D printers, and, honestly, I don’t know why there’s not more excitement than doomsday predictions.

Yes, that bunny was made by that box.

Before I get too far into that, I should probably explain the hype about 3D printers. This is a fairly new technology that is pretty much what it sounds like: a printer receives a series of 2D patterns to build up a material that is printed – that is, applied in layers – until a 3D object is formed. All things considered, it is probably the least wasteful modeling technology, but, like I said, it’s still new. It’s really slow, not yet universally affordable (especially the printing materials, which range from $7 to more than $300 per pound), and not yet perfect at what it does. That said, the technological curve is exponential: the technology will be there soon.

The freakout is happening because people think that now, with things like Pirate Bay’s physibles, bootleg items will start popping up left and right. Copyrights groups are shouting anarchy, trademark holders are squirming, and patent holders are giving the death glare. Allow me to explain the implications for patents (because, you know, patents is what I do):

“Eventually you can print your own bootleg crosstrainers” is a comment that has been thrown around a lot. This particular example is a long way off, however, as a 3D printer having 2 different material cartridges is currently a big deal. Single-material shoes, on the other hand, such as, say, Crocs, (which have many patents on them, by the way) need to be more on the lookout. These can (and likely will) get copied and printed with the current technology.  It might currently be cost-prohibitive, but someday soon, it may not be.

Design patents are suddenly way more valuable again. Personal use or not, if you print out or distribute a patented design, you are DEFINITELY violating the law and will likely get your freshly printed pants sued right off of you. We may not be too far off from printing more complex items covered by utility patents, either.

So what can you do? There is going to be a demand to print what you have, how can you protect your rights? Simple: get ahead of the curve.

This actually is a great opportunity. The geeks might as well be screaming at you “hey, this is a potential market, shut up and take our money!” The thing about geeks, especially early adopters, is that they are really proud of their new technology. In some cases, they’re willing to pay a little extra to showcase it. So, let me walk you through an idea to ride the wave of technology instead of aimlessly drowning in it.

Sell licenses to designs. Find a way to watermark the files so that they are more difficult (or impossible, if you can swing it) to copy, and sell them online. Sell kits, even! Material cartridges and a drive with files on it, for example (or a redemption code). To go back to the Crocs example, the early adopting geek will be more than happy to buy that design and print it, if for no other reason than to show off what their technology can do. You need to make a 3D design at some point anyway, right? Plus, if your consumer has those awkwardly-sized feet, they can have a pair that fits, while the manufacturer doesn’t have to make special orders, and the salesman isn’t stuck trying to explain why they won’t sell half a pair of shoes.

How to do it? Make an online market. If you don’t move to profit off of your hard work in a market that wants it, someone else will try to.

“Those whippersnapper pirates will try to steal it anyway!” you object. “They all want to get something for nothing!” I won’t lie to you, some people are going to try to steal no matter what you do, but there will always be an honest bunch who genuinely want to compensate you for what you’ve done. If you don’t offer what they want, however, that’s where things get sticky. An ounce of prevention is worth a pound of cure here.

Knows their audience.

Take the My Little Pony phenomenon, for example. When Hasbro released the 4th generation of a children’s show meant to market pony toys to young girls, they had no idea that the plot and characters would charm an audience that was nowhere near their target demographic. Keep in mind, the actual demographic for this show is pretty close to the demographic that would buy a 3D printer. Hasbro wasn’t ready to deal with this phenomenon, but they quickly adapted: ponies that started to look more like those portrayed on the show were offered for sale, episodes were made available on iTunes, and consumer loyalty was promoted. The company even went as far as giving a fan favorite background pony the name fans had bestowed on it. Once boxed sets of the show were available, “bronies” started buying them. Same goes for iTunes episodes and show-accurate toys. Sure, you’ve got a few people who will continue to download lower-quality versions of the episodes, but most fans are content to either watch their Saturday morning cartoons or buy the iTunes version… or even wait for the episode to get posted online by the company that airs the show!

No, the market will not always stay the way you like it. Occasionally, however, it will tell you exactly where it’s going and how to exploit it. Some will always steal, but there’s very little you can do about that. Adjusting what you offer to capture those who are willing to pay, however, is something you CAN do… so do it. Minimal effort for high profit is a great business strategy, after all.

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By: Mark R. Malek

One of the things that I have encountered over the years is an inventor that comes up with an incredible invention, but that does not know what to do with the invention in order to make money with it.  During my consultations, I generally break down the very complicated business side of inventing to the three most common ways that I believe the inventor can make profit from an invention.  Of course, this article assumes that the invention is patentable, will eventually be granted a patent, and does not infringe on someone else’s patent (many assumptions, but I will discuss those in a future post.)

The first way that I know how to make money on your invention is to manufacture it and sell it yourself.  Why do you need a patent to do that?  To tell you the truth, you don’t.  There is no requirement for you to patent your invention in order to sell it. If, however, you start selling your invention, or otherwise disclose it, and one year passes, you can kiss any hope of getting a patent goodbye.  Suppose that obtaining a patent is not that important to you.  That’s fine, but I guarantee that it becomes important to you once your invention starts getting knocked off and there is no reasonable remedy to stop the knock offs.  Also, one thing that I have notices about trying to launch your own product, i.e., trying to manufacture the product and get the product into a distribution chain, is that the patent is usually the cheap part.  Depending on the invention, just getting manufacturing set up can be extraordinarily expensive.

The second and third ways that I suggest profiting from an  invention does require a patent, or some other protectable right.  Way number two to make profit from an invention is to license a patent covering the invention.  This is usually the case when an inventor can come to terms with an entity or person that desires to make, use or sell an invention that is covered by the inventor’s patent.  In such a case, the two parties can enter into a licensing agreement.  A licensing agreement is an agreement that allows the inventor to maintain ownership of the patent, and grant rights to another to use the patent for some sort of compensation (or other consideration) and for a fixed amount of time.  Licensing agreements are not something that are scratched on the back of a Denny’s napkin in crayon.  They are very complicated, and require a great amount of detail.  If you find yourself in a position where you are shaking hands in a bar and thinking that you have just saved money on your licensing negotiation by not using an attorney, chances are you will be using an attorney in the not to distant future – in a much more expensive lawsuit.

The third way to profit from an invention is an outright sale of your rights to the invention.  This, almost always, involves the sale of a patent.  I have had many conversations with inventors that want to skip the patent process and just go right to the big company (say Johnson & Johnson, for example) and sell their invention for millions.  Really?  What would Johnson & Johnson be purchasing?  The inventor’s thoughts?  It doesn’t really work that way.  An invention inside of one’s head does not result in a protectable right.  Johnson & Johnson does not have any reason to pay for the invention because there is no protectable right in that invention until a patent is granted on it.  Put another way, there are no lawsuits for idea infringement, but there can be a lawsuits for patent infringement.  The above simplistic outline does not discuss other legal remedies, such as theft of trade secret, for example, but that is not really applicable to this situation.

There are several other ways, some more complicated, to profit from an invention.  I will continue to write on this topic, as well as provide some additional details of the above in future posts.  This is just a short intro to satisfy some of the common questions that inventors sometimes have.




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