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THE ONLINE INVENTOR -- August 2000

(c) 2000 Market Launchers, Inc.

http://www.marketlaunchers.com

Publisher:  Paul Niemann

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PUBLISHER'S NOTES:

There are a number of worthwhile trade shows and seminars for inventors during September, October and November. These include:

1.    The Inventor's and Entrepreneurial Expo and Conference: Making Invention Pay . September 15 -- 16 in Ft. Lauderdale, FL. Call (954) 771-6520 or (352) 373-1007. Cost is $225.

SPEAKERS INCLUDE:

2.    The U.S. Patent & Trademark Office's 5th Annual INDEPENDENT INVENTORS CONFERENCE, October 6 -- 7 in College Park, MD. For info, call the Office of Independent Inventors Programs at (800) 727-8622 or (703) 306-5568. Their web site is: http://www.uspto.gov/go/iic2000/ Cost is $75.

SESSIONS FOCUS ON:

UTILITY, DESIGN & PLANT PATENTS
PROVISIONAL APPLICATIONS
TRADEMARKS
INVENTOR SUCCESS STORIES
NAVIGATING THE USPTO WEBSITE
SEARCHING THE INTERNET -- HANDS ON HELP
P.T.D.L. SERVICES FOR INVENTORS
ATTORNEY/AGENT SERVICES FOR INVENTORS
RECENT PATENT LEGISLATION -- INVENTORS PROTECTION ACT

3.    The 6th Annual Yankee Invention Expo & Workshops, October 13 -- 14, Waterbury, Connecticut. For more info, call (203) 575-8322, FAX: (203) 597-8452; web site: www.yankeeinventionexpo.org. The cost for a booth is $275 for a single booth or $400 for a double booth.

4.    The Mississippi Inventors' Conference, November 18 in Olive Branch, MS (15 minutes from Memphis). This one features the following speakers:

*    Joanne Hayes-Rines, Editor, Inventors' Digest;

*    Gerald Udell, Ph.D., Founder of Wal-Mart Innovation Network;

*    Andy Gibbs, President & CEO of PatentCafe.com, Inc.;

*    Lynnae Boyd, Director, Central Resource Center for Innovation, Inventions and Innovation Program, for the U.S. Department of Energy Office of Industrial Technologies;

*    Anne Kelly, Director/CEO, Federal Consulting Group and former Director of Patent Policy, Projects and Resources at USPTO;

*    Adam Wolff, Excel Development Group, Inc.;

*    Don Kelly, CEO, Academy of Applied Science and First Director of the USPTO Office of Independent Inventor Programs.

I am also one of the speakers at the Mississippi Inventors' Conference, and I look forward to meeting those of you who will also be attending. I will be talking about what Product Scouts look for in new products.

For more info, point the little mouse to: http://www.olemiss.edu/depts/mssbdc/2000%20Invent%20Conf.%20Brochure.htm or call Bob Lantrip at (800) 725-7232 or (662) 915-5001. The cost is $75 with advance registration, or $85 at the door.

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Best Regards,

Paul Niemann

www.MarketLaunchers.com

"The man who believes he can do something is probably right, and so is the man who believes he can't."

"Better late than never," Paul Niemann

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In this issue:

Article # 1:    "An Introduction to the Wal-Mart Innovation Network (WIN)."

Article # 2:     "Prototypes vs. Pilot Runs, and Prototyping Principles," by Jack Lander

Article # 3:     "Submitting to Companies," by Ron Docie

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EDITOR'S NOTE:  One of the most common (and costly) mistakes that we see inventors make is their failure to do their market research, which includes getting feedback from your potential customers or from an independent organization to determine the market potential of your invention. The first article describes the evaluation system used by the Wal-Mart Innovation Network (WIN). Special thanks to Gerald Udell for permission to re-print this, and thanks also to Jack Lander for sending it to me a while back.

Article # 1:    "An Introduction to the Wal-Mart Innovation Network (WIN)."

The WIN Inventors Services Program provides inventors and innovators with an honest and objective third-party analysis of the risks and potential of their ideas, inventions and new products. WIN is an expression of support for inventors and innovators by Wal-Mart Stores, Inc., the Center for Business and Economic Development of the College of Business Administration at Southwest Missouri State University, the Innovation Institute, and our WIN Partners.

Just as most inventors do not have the expertise to patent their own inventions, most inventors lack the know-how to determine the commercial potential of their ideas and inventions. This is why WIN focuses on invention evaluation. We feel we can best serve inventors and innovators by helping them to avoid costly mistakes.

THE WISDOM OF EVALUATION...

Innovation always starts with an idea which, when pursued, turns into an invention and, after a lot of hard work, into a potential new product which then requires even more hard work and expense to launch into the marketplace. Innovation would never happen if inventors were not excited about their inventions.

However, caution is likewise necessary. Without it, you may end up spending a lot of time, money and effort pursuing an idea which solves a problem for you, but lacks commercial potential. When this happens, you end up putting that time, money and effort into a project that doesn't go anywhere. That's time, money and effort that could be invested in another project.

No one really knows the odds that an idea will be successful in the marketplace. That depends on the commercial quality of the idea and the quality of the venture which develops and markets it. The estimates of the number of ideas needed to find or generate one new product in a corporate environment varies between about 50 and 500, depending upon the industry or market involved. The odds that face inventors at the idea stage are higher; a fair estimate is between 1 00 and 1,000 depending upon the market your new product will enter. The best way to improve these odds is to eliminate those projects with low commercial potential early and focus your efforts on those of reasonable potential. You won't eliminate risk, but you can greatly improve the odds by evaluating your ideas.

THE PIES-VIII EVALUATION SYSTEM ...

We use the most recent version of the PIES (Preliminary Innovation Evaluation) format that is currently in its eighth edition and was implemented in August, 1995. The PIES format is a comprehensive, structured evaluation system consisting of 41 criteria that are used to evaluate the commercial potential of your idea or invention and to provide you with a risk profile of your project. These criteria are based on years of research and new product experience and will provide you with insights into the risks you face and the strategy you will need to employ to reach the marketplace. A WIN client described his evaluation report as an essential tool for future planning. This is precisely what we had in mind. Our reports are intended to help you make decisions and develop strategies for further development. Unless you are already well along in the innovation process, you may very likely have several months and perhaps years before your project will be ready for licensing or entry into the marketplace. Your WIN report will help you focus your efforts and guide you in resolving areas of concern.

THE PIES-VIII EVALUATION MANUAL ...

One of the truly unique features of the PIES-VIII format is the use of an evaluation manual, Evaluating Potential New Products, to provide you with more feedback about your invention than can be placed in a report. We know many of the people you may wish to show your report to won't wade through a lot of detail. So, we've crammed our 41 criteria into a 13-page report in order to keep the report as brief as possible. We'll also send you a letter that explains our evaluation procedures and frequently contains specific comments from your chief evaluator. As soon as we receive your evaluation request, we will send you a copy of the evaluation manual which will provide you with a discussion of each of the 41 criteria, why each is important and how they interact to affect the commercial potential of your invention. An explanation of the several ratings for each criterion follows. By carefully studying this manual, you can glean a lot of information about, and insight into, the commercial strengths and weaknesses of your project; we recommend you start reviewing it as soon as you receive it. Your report will conclude with a final recommendation about further investment in your project.

Many new products are not suitable for review or introduction through large discount/mass merchandise stores. Pursuing improper channels of distribution can lead to serious consequences. Thus, we try to steer you in the right direction. Please refer to paragraph #3 of the Innovation Registration Disclosure Document for a summary of recent evaluation results. Results may vary over time depending upon the nature of inventions/innovations submitted to WIN.

SOME QUESTIONS & ANSWERS ...

Since we started WIN inventors have asked a lot of questions about the program. Hopefully, some of these questions and our answers will be helpful to you.

1.    Do I need to have my patent before getting an evaluation?

Absolutely not. In fact, we recommend obtaining an evaluation first. Patents cost a lot of money.

2.    What experience do you have in evaluating inventions?

The director of the WIN program is Dr. Gerald G. Udell. He has over 24 years experience in invention evaluation, and he is generally regarded as the leading expert on invention evaluation in the United States. He has authored 30 books and over 200 articles, papers and reports, many of which relate to the innovation process and/or invention evaluation. He is the author of the PIES format which is the most widely used evaluation format in America.

3.    Who will do my evaluation?

The Innovation Institute (I2) is the WIN evaluation agent in all states except Missouri. The Institute was founded by Dr. Udell in 1979 to carry on the evaluation research he began in 1974 for the National Science Foundation. It holds the intellectual property rights to the PIES format.

4.    How long will my evaluation take?

You should have your report in about six weeks.

5.    What other services does WIN provide?

WIN is essentially an invention evaluation service. We do not provide invention development and marketing services because we think it is a conflict of interest for an evaluation service to also provide additional services on a fee basis.

6.    How much money will I end up paying WIN?

$175 -- about what you would pay for a very low cost patent search or to some patent attorneys for an hour of their time. There are no other payments to WIN. Any additional services we provide are at no cost to you and are at our option.

7.    I don't want an evaluation, how do I get my idea to Wal-Mart?

Wal-Mart does not license or invest in ideas or inventions, nor does it pay in advance on orders placed with vendors. You will need to wait until your idea/invention has had significant sales through other channels of distribution. Then, it will be appropriate for you to contact Wal-Mart.

8.    Where do I go for help after I get my evaluation report?

We will send you a list of inventor services and other resources located in your state. We maintain a national network of over 1600 resources for inventors including inventor groups, small business development centers, legitimate licensing executives and economic development groups. Please note some states have much better developed resources than others.

9.    What does Wal-Mart gain from sponsoring WIN?

Basically, the satisfaction of doing the right thing -- helping people to help themselves. Wal-Mart does not benefit financially in any way through this program. Wal-Mart is involved because its top management knows that innovation is essential to a healthy and prosperous national economy.

10.    What happens if I get a positive WIN evaluation?

A positive WIN recommendation does not obligate Wal-Mart in any way. WIN evaluators are free to endorse your invention without consideration of Wal-Mart stocking needs or policies. Our objective is not limited to stimulating only innovations suitable for Wal-Mart stores. There are a lot of other good ideas/inventions that deserve help too.

11.    Will Wal-Mart take over the development of my idea or invention?

No -- absolutely not. Wal-Mart is a retailer and has no manufacturing facilities. You are responsible for any development and commercialization.

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For more information, please write to:

WIN
Center for Business & Economic Development
Southwest Missouri State University
901 South National
Springfield, MO 65804
(417) 836-5671

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EDITOR'S NOTE:  The following is an excerpt from one of Jack Lander's Report # 6, entitled, "How to Save Hundreds of Dollars in Making Your Prototype." With 13 patents in numerous industries, Jack knows what inventors need to succeed in the world of ideas, inventions, patents and licenses. You can purchase any of Jack's reports, covering such topics as patenting, evaluating your inventions and bringing them to market, at his web site: http://www.inventorhelp.com. Most of the reports sell for between $5 -- $9. It's unlikely that you'll ever find better material at such a bargain price.

Article # 2:    "Prototypes vs. Pilot Runs, and Prototyping Principles," by Jack Lander

Prototypes vs. Pilot Runs:

A prototype is typically one of a kind - a substantially hand made model of your invention. A pilot run is a small production quantity made by short-run processes.

A prototype, especially in the early phases of evolution, is mainly used for the inventor's learning, and often requires several iterations before it closely represents the product that eventually will be manufactured and sold.

A final prototype is often presented to a prospective licensee. But unless it is prohibitively expensive to do so, a pilot run should be produced for such purposes. The main reason is that with only one presentation model, the inventor cannot leave that model with the prospect without crippling his or her parallel efforts to show it to other prospects. Prospective licensees are typically very slow to make final decisions -- often taking several months to do so. (The detriment of this delay is somewhat off the subject here, but inventors should place time limits on this "meditation" process, and make clear their intention to negotiate with other prospects after a certain cutoff date. After that date, any exclusive arrangements will bear a price. For example, give your prospective licensee a two week exclusive review period with the understanding that beyond that it will cost him or her $1 000 a month to maintain the exclusive status, and with a limit of three months. Procrastination costs your prospect nothing, but can mean the difference between success and failure to you.) In the case of presentations to catalog houses - a marketing channel that is especially attractive to the inventor who intends to manufacture his own invention (or have it contract manufactured for him) -- it is imperative that multiple models be available for submission to several catalogers in parallel. The philosophy of sending out presentation copies in quantity is essential to early success, and especially to avoidance of the discouragement and flagging efforts that often result from serial rejections and a protracted licensing campaign.

The inventor who is not familiar with manufacturing processes often thinks in terms of extremes, that is, that he or she must either make one piece or invest in very expensive production tooling. This is a fallacy. For almost every process there is a spectrum of methods, machines, and tooling that produce economically for a given quantity range. This is a principle that will be explained and discussed in the material that follows. The point here is that the cost of a 25-piece pilot run may only be two or three times that of a single prototype for certain kinds of inventions, and will be affordable if you have allocated your venture money strategically.

Prototyping Principles:

By understanding the following key prototyping principles you will be able to make a sound choice of materials and manufacturing processes, and create an effective prototype:

1.    Allocate a generous portion of your total project budget to your prototype.

2.    Determine the materials and processes that will be used by the eventual licensee to manufacture your invention in the sales volume that you forecast.

3.    If you are not well-informed about materials and processes, consult a professional product designer who is.

4.    Aim basically toward the "big three" processes for high-volume production in order to obtain a quality product at low cost. These are:

*    metal stamping or drawing;

*    plastic or elastomer molding;

*    zinc alloy die casting.

5.    Make your prototypes from short-run processes that produce results nearly identical to the high-volume processes that will eventually be used by the licensee.

6.    When you are confident that your next prototype will be the final one, consider producing a pilot run of presentation products rather than merely just another prototype.

7.    Solicit manufacturing price quotations in a professional manner.

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Jack Lander is the proprietor of The Inventor's Bookstore. See his catalog at http://www.inventorhelp.com. He is an officer in three non-profit inventor organizations. He also makes prototypes for inventors and new-product developers. He can be reached at 203-797-8955.

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EDITOR'S NOTE: The following is excerpted from the book, "Royalties in Your Future," by Ron Docie. To purchase the book, or to preview it, please go to: http://www.docie.com/book.html.

Article # 3:    "Submitting to Companies," by Ron Docie

After you have had a chance to thoroughly investigate the background of the companies that you are submitting your invention to and have had an opportunity to talk to the key decision maker, you must choose which ones to submit your invention to. This decision, of course, is strictly up to you and should be based on all of the information at hand. Let's assume that from the six companies that you were initially considering you have narrowed it down to three companies who together share at least 75% of the market in your area of invention.

When you had your conversation with the key decision makers of the companies, they probably told you what type of information they wanted to receive back from you. Most decision makers are looking for the same type of information in order to initially evaluate whether your invention has a place in their company. They need the following:

a.    A brief description of what your invention is.

b.    A description of any specific requirements for manufacturing.

c.    What it is about your invention that sets it apart from existing technology, and why it is better.

d.    The application(s) for your invention.

e.    Who can make use of your invention.

f.    What you expect from the company, i.e., that you want them to manufacture and market it and pay you a royalty or other fair remuneration. (You need not be specific at this point with the exact dollar amount or with the exact terms of how much money would be paid up front. This negotiation will follow if the company is indeed interested).

g.    Any documentation that verifies the workability or desirability of your invention, when appropriate.

h.    Any backup documentation.

i.    A copy of any patents.

j.    A sketch, photo, or sample of your invention, if appropriate.

The information you provide the company at this point should be brief and concise. The basic information as outlined in a. through j. should be condensed in one to two pages followed by backup documentation and sketches. It is generally less important to document the actual technical feasibility of your invention than it is to show the company why your invention would be advantageous for them.

Inventors often get caught up trying to convince the company that the invention works and explaining how it works, rather than showing the company what makes it better than existing products. In some cases it is possible to present a description of what your invention does and what advantages it possesses without revealing its exact working nature or, for that matter, trade secrets about how it is made.

It is strategically advisable to reveal only your invention's advantages and specific features, if you can. In this way you are not revealing trade secrets about your invention to any companies unless they have indicated keen interest in pursuing your invention further.

In some cases, companies that resisted signing any type of confidential or other agreement with you will change their minds, when you present them with a description of the advantages and benefits of your invention. Then they may become so keenly interested in acquiring the rights to your invention that they are willing to forego standard operating procedure and sign a special agreement with you honoring the confidential nature of your trade secrets. That is why this step-by-step approach can be quite useful when dealing with trade secrets.

Sometimes we make no mention in our letter about who can make use of the invention. This is done on purpose when we're not sure and we want to find this out from the companies to whom we are submitting the letter. Remember, you don't have to be a know-it-all. Give the recipients of your submission some room to expand their ego and share their expertise with you.

Send only copies, not the original material, and document everything that was sent to the company. Companies will sometimes return material to you upon request. In some cases, they copy the material for their files before returning it to help protect them in case there is any dispute as to what exactly was submitted to them. In other cases they will simply return your copies. If this is a major concern you may request in your initial submission to them that all of your originals be returned to you upon rejection, and that they may not make copies.

When soliciting companies who may be interested in licensing your invention, remember to indicate both in your conversation with them and in your cover letter that you are not offering your invention for sale to them, but that you are in the process of doing your initial technical and market feasibility research to determine where the value in your invention lies. The reason for this distinction is because of the one-year time bar we referred to earlier. Clearly stating in writing that you are not making an offer for sale at this time will help to prevent that.

This brings us to yet another disadvantage to arbitrarily shopping your invention around to several companies without qualifying them first. Remember that whether or not you have a confidential disclosure agreement, any one individual in any of those companies could leak information about your invention and subsequently cause it to be publicized. This would also start the one-year time clock ticking even though you did not directly release information.

Initial Response From Key Decision Makers:

After you submit your material to the company, wait about a week and re-contact the key decision maker to make sure he or she received the information and ask if he or she has any questions about it. In some cases, decision makers will have a response ready for you at that time; in other cases they may need more time to evaluate the invention. If they need more time to do the evaluation, ask them how long they need and offer to re-contact them at that time.

When you do re-contact the decision maker, there are some important questions to ask. First, ask the decision maker what his or her interpretation of your technology is and what he or she thinks the benefits are. Many times even key decision makers in companies do not thoroughly understand or appreciate the exact nature of inventions. It is important to make sure that you and the key decision maker understand each other at this point.

It is not uncommon for the key decision maker to respond that he or she is rejecting the invention for a reason that makes absolutely no sense. This could be the result of a report from the engineering or marketing staff. It is of utmost importance to find out what it is about the invention that is not seen as feasible. I find that in at least 50% of the cases the rejection was based on erroneous thinking. In other words, the engineering staff or marketing staff didn't thoroughly understand the exact nature or intent of the invention. In this case it needs to be explained to them in a different way.

The majority of invention submissions are rejected for any of several reasons:

a.    It does not fit the company's market.

b.    The company is not in a position to pursue an invention of this type at this time.

c.    They feel the cost to produce is greater than what the consumer will pay.

d.    The invention may be illegal or violate EPA, OSHA, or other laws unknown to the inventor.

e.    The company has already seen an invention like this on the market.

f.    The company may have attempted to market a similar concept and met with failure for any number of reasons that would also apply to this invention.

In most cases the invention is not rejected because it is bad, but because it does not fit within the company's marketing strategy. This is obviously an indication that the right company was not contacted. When this is the case, ask the key decision maker which companies he or she believes would be more appropriate for you to contact. Based on the response, you may find that an entirely different set of companies may need to be contacted. Sometimes inventors find a certain market niche only to find out later that a completely separate niche is necessary for licensing.

About the only way an inventor can find out the details of why their invention was rejected and get a referral to other companies is to have a personal telephone conversation with the key decision maker to whom you submitted the invention. Rarely will a company respond in writing with this type of detailed information. They will normally respond with a standard type of letter that says, "Thanks, but no thanks. It doesn't fit our corporate strategy at this time." The reason that they have to respond so conservatively is because they do not want to divulge in writing any activities regarding new developments within their company. You can get much more information from a telephone conversation.

In the event that you have not been able to get any kind of written verification of your submission to the company, then you may want to ask for a written response even if it is a rejection letter. This will at least give you written verification that your invention was submitted to the company.

When you believe that you have contacted all the potential licensees for your invention and when they all reject your invention for similar reasons, take a hint. It may be that you are at the right place at the wrong time. Although rejection is a hard thing to accept, there is one benefit. It will at least save you the time, money, and frustration of spending exorbitant amounts on patenting, prototyping, and market research which would be futile.

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Ron Docie is the author of "Royalties in Your Future:  How to Find Manufacturers, Negotiate, Market and License, Inventions, Patents and Technology." Five years in the making, this 200 + page book is an authoritative step-by-step guide to help inventors through that complicated maze from idea to commercialization. Particular attention is paid to how to identify and qualify appropriate manufacturers and potential licensees. Docie Marketing provides comprehensive services for inventors. One of their specialties is their ability to locate manufacturers who can produce your invention, market it, and pay you royalties. Visit their web site at: http://www.docie.com.

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Feel free to forward "The Online Inventor" to your inventor friends and colleagues. If you change your e-mail address, please subscribe with the new address in order to continue receiving it each month. To unsubscribe, please reply with the word, "unsubscribe" in the subject line. If you would like to request a topic for an upcoming issue of this newsletter, just send us an e-mail or give us a call. You can view past issues of "The Online Inventor" at http://www.marketlaunchers.com/archives.html. Thanks.

Until next time, Successful Inventing To You!

Best Regards,

Paul Niemann;
Humble Proprietor of Market Launchers.com
(800) 337-5758
(217) 224-7735 (outside the U.S.)

Copyright 2000
All Rights Reserved

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Click here to read the July 2000 issue.