Profit From Your Idea: How to Make Smart Licensing Deals

by Richard Stim Attorney

Overview

The most complete guide to licensing your idea available!

Like most inventors, you dream of striking it rich -- finding a company you can trust, hashing out a fair licensing deal, watching your idea hit the marketplace and then raking in the profits.

But where do you find the right company? And how do you draft an agreement that protects your interests? Turn to Profit From Your Idea.

This book provides the practical advice and the legal licensing language you need to turn your brainchild into a moneymaker. It helps you:

understand the licensing process

determine your rights

work with agents effectively

find potential licensees

license overseas

show your invention while protecting your work

negotiate a fair licensing deal

draft your own licensing agreement

understand, review and negotiate changes

The 6th edition is completely updated with current law, and provides a new section on funding invention licensing.

List of Forms
Agreement Worksheet
Assignment of Rights: Patent
Assignment of Rights: Patent Application
Assignment of Rights: No Patent Issued or Application Filed
Letter Confirming Employee's Ownership of Intellectual Property Rights
Joint Ownership Agreement
Agent Letter Agreement
One-Way Nondisclosure Agreement
Mutual Nondisclosure Agreement
Contract Worksheet
Letter of Intent
Option Agreement
Terms Sheet
License Agreement
Escrow Agreement
Checklist for Reviewing a License Agreement
License Dates Chart
Audit Request Letter

Product Details

ISBN-13:	9781413331202
Publisher:	NOLO
Publication date:	11/28/2023
Sold by:	Barnes & Noble
Format:	eBook
Pages:	456
File size:	11 MB
Note:	This product may take a few minutes to download.

About the Author

Richard Stim specializes in small business, copyright, patents, and trademark issues at Nolo. He practices law in San Francisco and has represented photographers, software developers, crafts people, publishers, musicians, and toy designers. He is the author of many books, including Whoops I'm in Business, Music Law, and Profit From Your Idea. Stim also produces audiobooks, and performs and records with two bands, MX-80 and angel corpus christi.

Table of Contents

Your Legal Companion 1

1 Gearing Up to License Your Invention 3

Licenses 5

Assignments 9

The Licensing Process 10

Avoiding Conflicts Among Multiple Agreements 12

Challenges to Your Ownership 18

Transferring Ownership of Your Invention to Your Business 20

Disclosing Information About Your Invention 32

Keeping Your Records 34

No False Hopes! Reviewing Your Invention's Commercial Potential 36

2 Intellectual Property Protection 43

General Rules for Legal Protection of Inventions 45

Utility Patents 47

Trade Secrets 55

Trademarks 61

Design Patents 63

Copyright Law 65

Sorting Out Nonfunctional Features: Design Patents, Product Configurations, and Copyright 66

3 Ownership Issues for Inventor Employees 69

What Type of Intellectual Property Is Involved? 70

Employer/Employee: Patent and Trade Secret Ownership 71

Inventions Covered by Copyright 79

Special Employment Situations 79

Working Out Ownership Issues With Your Employer 84

4 Invention Financing and Joint Ownership 89

How Much Money Do You Need to License Your Idea? 91

Sources of Funding 94

Joint Ownership 103

How Income, Loans, or Investments Can Create joint Ownership 106

The Joint Ownership Agreement 108

5 Licensing Agents and Representatives 115

Agents 116

Completing the Agent Agreement 119

Attorneys as Agents 126

Invention Marketing Scams 128

6 Soliciting Potential Licensees 133

Before You Begin Your Search 135

How to Find Potential Licensees 137

How to Overcome a Licensee's Bias Against Submissions 140

What's the Best Way to Solicit a Potential Licensee? 142

Product Presentations 146

Should You Solicit Foreign Licensees? 147

7 Protecting Confidential Information 155

Confidential Information and Nondisclosure Agreements 156

Proceeding Without an Agreement 168

Waiver Agreements 170

When You Have Sufficient Bargaining Power 172

Disclosing to Employees and Contractors 174

Disclosing to an Attorney 175

8 The Key Elements of Your Agreement 177

From Handshake to License 178

Identifying the Parties 179

Describing Your Invention and the Licensed Products 180

Specifying Which Rights Are Granted 185

Defining the Territory 192

Setting the Length (Term) of the Agreement 194

9 Money: It Matters 205

Some Basic Royalty Definitions 207

Ways to Get Paid 209

The Mysteries of Net Sales and Deductions 214

How Much Do You Get? 216

Royalty Provisions 220

10 Negotiating Your Agreement 231

What, Me Negotiate? 232

Documenting the Important Contract Elements 235

Letter of Intent 238

Option Agreements 244

What If the Licensee Wants to Proceed Without a Written License Agreement? 252

11 Sample Agreement 253

License Agreement 255

Optional License Agreement Provisions 290

Modifying the Sample Agreement for Your Needs 297

12 Warranties, Indemnification, and Proprietary Rights Provisions 299

Promises, Promises … Warranties, Representations, and Covenants 300

Indemnity: The "Hold Harmless" Provision 303

Licensee Warranties and Indemnity 310

Proprietary Rights 312

Commercialization and Exploitation 316

Samples and Quality Control 317

Insurance 317

13 Termination and Posttermination 321

Termination and Posttermination 322

Termination Based Upon a Fixed Term 323

Termination at Will 324

Termination Based on Contract Problems 324

Termination and Bankruptcy 326

Posttermination: What Happens Afterwards? 327

Survival of the Fittest 329

14 Boilerplate and Standard Provisions 331

Paying the Lawyer's Bills 333

Dispute Resolution 335

Governing Law 337

Jurisdiction 338

Waiver 339

Severability 340

Entire Understanding 340

Attachments and Exhibits 341

Notices 341

No Joint Venture 342

Assignments 342

Force Majeure 344

Headings 344

Establishing Escrow Accounts 345

15 Service Provisions 351

Service Provisions Versus Separate Service Agreements 352

Training the Licensee's Personnel 354

Installation of Equipment 355

Technical Support for the Licensee or for End Users 356

Improving, Modifying, and Delivering the Invention 357

16 Handling the Licensee's Agreement 365

Dealing With Suggested Changes 366

Evaluating an Agreement Presented to You 368

Evaluating the Provisions and Suggesting Changes 369

The Cover Letter 379

17 After You Sign the Agreement 381

Create Your Contract Calendar 383

Dealing With Royalty Statements 385

Resolving Licensing Disputes 388

Avoiding Patent Misuse and Illegal Agreements 390

The Taxman Cometh 394

Quality Control 395

18 Help Beyond This Book 397

Licensing and Intellectual Property Resources 398

Working With an Attorney 402

Appendix: How to Use the Downloadable Forms on the Nolo Website 407

Editing RTFs 408

List of Forms and Interviews 409

Index 411

What People are Saying About This

Joyce Lain Kennedy

"Offers a lot of advice. Stim covers all the essential factors in his book."--(Joyce Lain Kennedy, Syndicated Columnist)

Interviews

In a survey of inventors, almost three-quarters believed their patents would earn them at least a million dollars. Over half thought their earnings would exceed $5 million. In reality, only 3% to 5% of patents earn money. In other words, no matter how hard it is to design and patent an idea, making money from that great idea is even harder. One reason this book continues to sell after twenty years is that, unlike the many get-rich-quick books that have come and gone,Profit From Your Idea is steeped in reality. I designed this book to protect inventors at every stage of the licensing process, from finding and negotiating that lucrative license to shielding inventors from unnecessary losses by honestly evaluating commercial potential. I believe this reality check is what keeps Profit From Your Idea a perennial seller.

Editorial Reviews

Tells inventors everything they need to know to enter into a solid licensing agreement.

Electronics Now

With an array of forms on disk, in combination with the insights of intellectual property attorney Stim, inventors can hold onto the titles and profits of their inventions rather than sell out to companies.

Book News

Gives detailed instructions on working with manufacturers, marketers and distributors, and addresses issues on copyright and trademark laws, ownership, finances and much more.

Baton Rouge Advocate

Excellent . . .

San Francisco Chronicle

Tells prospective entrepreneurs how to move an idea 'from thought to bought' -- and roughly what inventors can expect to get in a licensing deal.

Los Angeles Times

Gives detailed instructions on working with manufacturers, marketers and distributors...” Baton Rouge Advocate

“Tells prospective entrepreneurs how to move an idea ‘from thought to bought’—and roughly what inventors can expect to get in a licensing deal.” Los Angeles Times

“Tells inventors everything they need to know to enter into a solid licensing agreement.” Electronic News

"Stim, an intellectual property attorney and author, explains how to make licensing deals for inventions. He addresses ownership rights, including determining legal rights and protecting them under patent, trade secret, and copyright laws; soliciting licenses and dealing with agents, finding and soliciting prospective licensees, and protecting trade secrets during the solicitation and negotiation process; the license agreement, including its elements, how to keep information confidential, money aspects, the negotiation process, and drafting the licensing agreement oneself; and dealing with licensee changes to the agreement and issues that might come up after signing it. This edition has been updated with current licensing law and patent rules and covers the implications of the Defend Trade Secrets Act of 2016."Eithne O"Leyne, Editor, Ringgold, Inc. ProtoView

From the Publisher

Tells inventors everything they need to know to enter into a solid licensing agreement.” Electronic News

Electronic News

Thorough, accurate and well presented... This book is a tremendous asset for an inventor with the desire and inclination to do it yourself.' As an intellectual property attorney specializing in licensing transactions, I have enjoyed paging through this book and brushing up on a variety of issues, and yes, even learning a thing or two!
— Greg S. Weber, Esq.

Creative Media Law Group