Inventing New Products/Inventions/licensing contacts
QUESTION: i am in process of manufacturing my product but only have a patent pending...we know this is our time to test the product out. Q though...what is the best way to contact companies like Babies R Us and the like to get them to us other than trade shows? my partner and I both MUST work and cannot afford many of the trade shows and to quit our jobs. Our manufacturer in AZ has many products with home depot, costco and other companies and said we should consider licensing our product. what is the pros and cons of this? we are worried to do such a thing until we rec' full PATENT..is this smart to wait on our part? we also wont do anything without our attorney. he is a mint and very good, 30+yrs experience. I just wondered how to contact licensing opps or go directly to walmart or target or babies r us..how do we do this or find good distributors?
any links you can provide?
thx so much!
jen in AZ
ANSWER: Hi Jen,
You're almost in my backyard!!!
1. i am in process of manufacturing my product but only have a patent pending...we know this is our time to test the product out.
a) It’s not clear if you have a toy or a garment etc so the below represents “shooting in the dark” options. In the US you still have one year after public dissemination to apply for a patent. If all you filed was a Provisional, that doesn’t provide any protection anyway. If you’re targeting big box vendors they won’t be signing an NDA so not much you can do about that.
b) I might contact local stores or speak to a District Manager. They may have programs in place to test market new products in their stores or online, if the product interests them. They don’t care about patents – just sales – since you’re the one who by paying to keep out copy-cats, not them. Some Walmart managers have pre-approval to test product sales in their local stores after which, if they meet their minimum sales quotas (you’d need packaging and a SKU etc) goals they would contact corporate for you. Before you entertain Walmart, Target, etc you should order their new vendor packets. You may not have the finances to meet their minimum order requirements. In other words, if, say, they send 24 Walmart trucks to your warehouse, do you have the inventory and wherewithal to fill such an order? And, if X-% of ???? are returned would you have the money to buy them back, repair, repackage and reship them out again somewhere else? They don’t buy for one store but thousands of them. Do you have (used to be) 1-million in credit? Can you afford to split advertising fees with them? Do your homework re becoming a vendor on all stores you’re interested in contacting.
2. Our manufacturer in AZ has many products with home depot, costco and other companies and said we should consider licensing our product.
a) Is he offering to License your product then?
b) Walmart, Target etc are retailers (mass merchandisers) not potential Licensees. Licensing has its downsides one being you may make less (royalties on sales) than being your own sales entity distributing to them or to one of their approved vendors. Plus you have to factor in all the downstairs of what could be in a licensing agreement shrinking your royalty down to nothing. You could work on a scale, the more you distribute to a vendor (and they sell) the less money you make. The less you sell the more money you make. There are a multitude of licensing strategies.
3. what is the pros and cons of this? we are worried to do such a thing until we rec' full PATENT..is this smart to wait on our part? we also wont do anything without our attorney. he is a mint and very good, 30+yrs experience.
a) Firstly patents DO NOT PROTECT PRODUCTS! The only Right they confer on their owners is the right………………. TO PREVENT others from making, using, selling, importing products as contained in your legal patent Claims. Right now you do not have a patent so the above does not apply. It’s a dog eat dog world – so the faster you get it out there the better. This is the world of commerce NOT to expect copy-cats (if it’s a hot seller) is (words escape me). The idea is to HOPE FOR INFRINGERS (after a patent issues). Why? Infringers represent licensing opportunities to you. One more way to make money from a patent. Get it? THE MORE INFRINGERS THE MERRIER (lip smacking delicious!!!) Sometimes all it takes is a letter from an attorney but that could be dangerous too unless you’ve researched their sales etc. You’d best look up what a “Summary Judgment” is before you race out after copy-cats (after you get a patent) that is, unless they are making BIG sales otherwise it might be a waste of time and resources. Hence it’s key to work out all the tools in one’s IP tool box to figure out how to cinch-down every cotton-picking way to make money off a patent; otherwise, they might be a complete waste of (upfront) money UNLESS one has a long-term hot selling product with line extensions on the back burner and vendors are clamoring to distribute your product.
b) No one but you cares about patents. As long as you have the resources to defend any patent that ultimately issues – no big deal. Your goal should be to get your product into the marketplace (my opinion) not wait for a patent to issue which could take three plus years (depending on whether it’s a Utility or Design). If it’s only a Design – it’s probably not worth much anyway. I wouldn’t waste my time if all I might get was a Design patent but there again, I’ve no idea on your product category.
4. I just wondered how to contact licensing opps or go directly to walmart or target or babies r us..
a) See above. Usually they’ll contact you if your product turns out to be a hot seller.
b) Finding a licensee(s) with wide distribution lines etc is not too difficult. No sense wasting time with those who do not have wide distribution networks. For example, Walmart is not just online but is retail too hence why it’s so darn big. It also has it’s own trucks, distribution depots around the country, etc etc etc. Sensational looks, on first glance, like it might only be an online venture. Not sure I didn’t walk my fingers walk on my keyboard.
b) Other competitors include but are not limited to: Sensational Beginnings in Monroe, MI and Discovery Toys LLC and RC2 corp (again, I’m not sure what your product category is so not all the above may apply to your situation).
5. how do we do this or find good distributors? any links you can provide?
a) I’d need to know your product category to give you an appropriate answer otherwise, like the above, I am shooting in the dark.
All the best,
---------- FOLLOW-UP ----------
QUESTION: HI Penny! you are almost in my backyard?! COOL..are you in California or AZ??? I really would love to chat further with you via the phone one on one. I appreciate your advice and wonder if I can speak to you privately and tell you more re: product. You might be the right person to have work with us to help us as we are just starting to get manufactured-mtg Friday to do this with experienced guy here in AZ who also has office in China and works with Home Depot and various other companies. He is amazing and honest. We would gladly accept NEED:) your help and licensing connections and pay you in some way to benefit you and your time and opportunity for us. We hope you can email me directly! i will then send you my cell phone number. thx so much, you def are a pro and I would like to talk to you further and tell you why it is a revolutionary product, a 4 in one for babies 4-2yrs old! ...after DNA, etc. You sound like someone I really want to talk and work with! pls contact me at my email and let's connect..
You can find my name and a phone number (702 area code) online and even my email address and a rental home address I list for mail. I'm always happy to provide my personal opinion it being, hopefully, taken as educational and not legal advice.
I'd suggest you have a list of questions readied so we don't spend time "all over the map" as it were. If you can't find me online ---keep searching Google. Best is to call me direct via my landline (I have a message machine on it to monitor calls so don't hang up). I don't won't to post private info here due to spammers. I'd rather they worked at finding me - - the lazy cyber hogs.