Miami Herald, The (FL)
February 5, 1996
Memo:COVER STORY: BRIGHT IDEAS
HOW TO SURVIVE THE ROAD FROM INVENTION TO MARKETPLACE
MIMI WHITEFIELD Herald Business Writer
Inventors are a curious bunch. Even Pamela Riddle, president of Innovative Product Technologies, who has devoted her career to helping them get their inventions on the market, says as much:
"Inventors really are different," Riddle said. "Their minds are different. They're so blessed with creativity. Sometimes, it's a little scary."
They run the gamut from software wizards, engineers and scientists to everyman and everywoman inventors who, confronted with a problem or a need in the course of daily living, come up with a solution.
What they usually have in common is they love their inventions to death.
"It's like my child. Out come the pictures and the whole nine yards," said Cynthia Wilson-Hyde, a Kendall dental hygienist, as she proudly held up photos of her patented "SuperStep" aerobic exercise platform.
But love alone won't get a product to market. It takes research, hard work and luck to make the transition from inventor to entrepreneur.
Even an inventor whose product is unusual enough to receive a patent faces daunting odds. Only an estimated one out of every 100 patented products makes money.
"Commercializing an invention is like having a baby -- easy to conceive and hard to deliver," said Riddle, whose Gainesville company counsels inventors and helps them make their ideas pay off.
Many novice inventors think all they have to do is come up with a bright idea, and there will be someone who wants to buy it or pay them royalties.
The reality is that most big retailers do not buy ideas. They want finished, packaged products ready to go on the shelf, Riddle said.
She recently organized "Making Invention Pay," a conference in Miami that brought together inventors, would-be inventors, entrepreneurs, patent lawyers, researchers and business development entities.
In honor of Thomas Edison's birthday and National Inventors Day, which falls on Sunday, we present some of their wisdom on how to bring new products to market and the pitfalls to avoid.
The first rule, say the experts, is do your homework. An inventor may think the world has waited centuries for his or her idea. But sometimes someone else gets there first.
To avoid spending a lot of time and money on something that's already been patented, head to the library. The U.S. Patent and Trademark Office has four patent depositories in Florida where patent searches may be conducted.
In South Florida, they're at the Broward County Main Library in Fort Lauderdale and at the main downtown branch of the Miami-Dade Public Library.
"I tell the new inventors, before you spend any money, go to a patent depository and check anything in the categories you're interested in," said Betty White, a founding vice president of the Inventors Society of South Florida, which meets monthly in Boynton Beach. "A lot of people waste a lot of time and then find out that the item is already there."
Inventors who think they've come up with something different enough to be patented should consult a patent agent or patent attorney -- preferably one who specializes in the industry involved.
To receive a patent, a product must be useful, novel and not obvious, says Jesus Sanchelima, a Miami patent lawyer. The product also must be legal. No designers of marijuana pipes need apply.
Some experts, however, advise a little market research -- especially for consumer products -- before an inventor heads to a patent attorney. What good is a patent on a motorized, back-scratching widget if there is no consumer demand for it?
Many seemingly good ideas have also been abandoned because production costs are too high. If your research shows, for example, that consumers are willing to pay $5 for a product, production cost needs to be $1.25 or less, Riddle said.
"You may not need a patent lawyer to actually file a patent for you, but for your own protection, you might want to ask some questions early on," said Jeffrey J. Herman, a Miami lawyer who handles patent infringement litigation.
Not all products are patentable; some are deemed trade secrets like the formula for Coca-Cola. Others aren't considered unique or utilitarian enough.
In any event, Herman advises inventors to keep a bound, diary-type notebook with numbered pages to record the progress of their inventions. Better yet, have each page notarized and dated.
That way, he said, inventors have a record in case a question arises about whether a product is really their baby.
Unfortunately, if an invention is popular and makes money, it's almost inevitable that someone will try to knock it off.
"It's amazing how common patent infringement is. It's a way of doing business in America," said Herman. "Large companies know that the typical small company or small inventor doesn't have the means to file a patent infringement case. Legal costs can typically run to a quarter of a million dollars."
One of Herman's clients is Robin Elkins, a Hollywood man who invented the technology used in voice-mail systems. Though Elkins received a patent in 1978, telecommunications giants began offering voice mail without paying Elkins a penny in royalties.
He filed suit and now has licensing agreements with AT&T, Northern Telecom and several other telecommunications companies.
Inventors seem to fall into two extremes when it comes to talking about their products: those who will talk up a storm and those so worried that someone might steal their idea that they'll barely disclose their own names.
Inventors whose products aren't protected by patents and don't want to give anything away when they approach potential manufacturers or financiers can ask them to sign a nondisclosure agreement before discussions begin.
For $75, inventors can get patent pending status -- while the Patent and Trademark Office considers the application -- and put the designation on their product.
What's more, provisional patent applications are never published, said Donald Kelly, director of a mechanical patent examining group at the Patent Office.
Now, suppose you were one of the nearly 114,000 folks who received patents last year. The next step is trying to get the product to market.
Some ideas are so hot that inventors can quickly come up with licensing agreements, but in most cases they must either figure out how to manufacture the product themselves or subcontract the work.
Because most inventors' companies are start-ups, traditional financing is hard to come by.
"You can virtually rule out the venture capital route for a start-up," said Michael J. Donnelly, a Pompano Beach management consultant and former president of the Gold Coast Venture Capital Club.
Most venture capitalists aren't interested in looking at deals of less than $5 million, so start-up entrepreneurs with limited capital needs should look to themselves, their family, friends or business associates for money.
There are also "angels," people with capital to invest who are looking for hot prospects.
"I like to use the term 'adventure capital' when it comes to private investors," Donnelly said. "It's a roll of the dice. For early start-up companies, private investors are just about your only route."
Looking for money is very much a networking, person-to- person type business, said Maury Hagerman, a development representative with the Florida Department of Commerce.
However, many inventors are so convinced their products are sure bets that they can't understand when investors don't share their enthusiasm.
"You have to respect investors' concerns that there is risk involved," Hagerman said.
Once an investor is located, Donnelly advised inventors at the Miami convention to make sure they pay sufficient attention to operational details when signing an agreement.
"You may think finding the money is the toughest part of a deal," he said. "I will guarantee you the hardest part is negotiating the deal."
There are also companies that offer to do a market analysis for inventors and find manufacturers for their products.
Some of them do. Others charge hefty fees -- from $2,000 to $12,000 -- for virtually worthless information and little help.
"We try to keep inventors informed on the companies that take them for a ride," said White of the Inventors Society of South Florida. "I'm skeptical of all the companies that want money up front.
"They rope you in with their ads, and then you get a bill. They don't do anything for you, except ask you for more money," she said.
"I get a minimum of 100 clients per year who have already paid into these companies," Riddle said.
Riddle, who also reviews and evaluates new products for Wal-Mart, said she has no qualms about telling inventors their products don't have potential.
"But I have never, never seen a negative market potential report from one of these companies that accepts money up front," she said.
It's safer to do business with a company that charges a modest initial consulting fee, and then agrees to a percentage of royalties. That way there a lot of incentive for them to do their best.
Of course, not all inventors hire a consultant, sales agent or a company to help get their product to market. It's possible to do it alone, but it can be labor intensive, and the timid need not apply.
Dorothy VanFleet, a St. Petersburg woman who came up with a small, plastic bone-shaped device that keeps pairs of earrings together and helps eliminate the clutter in a jewelry box, is a case in point.
There's nothing wall-flowerish about her. She calls her company Brilliant Business Ideas, and has applied for a patent for her "Earbones."
"I have no problem calling the buyer for Claire's or Wal- Mart. My forte is sales," said VanFleet, who used to own an advertising specialty agency in Port Charlotte.
Riddle also advises inventors to frequent trade shows to meet buyers, manufacturers, distributors and sales representatives. And although it seems like a basic bit of advice, inventors should visit the stores where they hope their products will be sold.
"You'd be surprised how many people haven't visited a Wal- Mart store and want to sell things like bricks or sequined evening gowns," said NaLisa Brown, manager for Wal-Mart's Support American Made and Innovation Network programs.
"Wal-Mart is not going to create shelf space for you. You've got to come to Wal-Mart prepared and ready to go and know who you're going to replace on the shelf," she said.
"Inventors do have to fight all odds" to make their inventions pay, Riddle said, "but it can be done."
Copyright (c) 1996 The Miami Herald