Inventors and innovators will often find a way to make a better mousetrap. You will often find that others have patents on a critical component to make this innovation or invention a better mousetrap. Therefore, they must make a deal with the company or person who owns the patent so that they can use this technology to make their invention and sell it. One way to do this is to offer to pay them a per unit royalty on each unit manufactured or sold. And most smart companies that agree with this will want audit rights to check the books on how many items were built and/or sold by the best mousetrap maker. Recently, an innovator and expert in ideas asked me; “Do I need more information on the audit rights you talked about?”
Well, if you started selling them and were going to give them a per unit stipend, then they would have to make sure you reported “ALL” actual sales to them; That makes sense, right?
“Is it possible that you can offer the initial capital to build a prototype?”
Yes, if I were an executive of that company that owns the patent, I would put him in touch with my engineers and sit at a table and listen to the meeting, then take notes, prepare and agree, think about it for a day. discuss the options and have my lawyer write it up and do everything within two days, give you parts and make some representations.
If my company is going to finance your project with you, we would like to make sure the product sells well as we are fully committed to our technology and now capital in your project. And we would have to sign a deal or I might even consider putting you and keeping you on the company payroll.
You can see either way, if you do it for them, for yourself or they do it for you or for themselves. The company can consider several options if it has a good business and innovation plan using its technology. In fact, the best mousetrap builder should know who he will be dealing with and should learn as much as he can about the company before approaching them. Think about this in 2006.
