A Guide for Designers and Inventors
Learn about patents and royalty agreements
Available as a free downloadable booklet
All you need to know about patents
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"By using this guide it is possible, without professional assistance, "market" your idea. They will produce a nice glossy brochure which "Technical Information" all know-how and technical information "The Term" 3 years from the date of this agreement with the option to "UX-105" product which they have developed. 5.2 Cut and Run agrees to ("the mouser") which will automatically catch a mouse and eject it (1) FRED FLINTSTONE of 12 Canyon Road, Bedrock. BE7 6AU ("Mr. (1) Mr. Flintstone after considerable research and development has (2) CUT AND RUN LIMITED whose registered office is Floggit House, (2) Cut and Run has expertise in the manufacture of equipment related (3) Mr. Flintstone is willing to appoint Cut and Run as exclusive (4) Cut and Run is willing to pay to Mr. Flintstone royalties as (including all improvements to and the development of the mouser (One company inserted a clause which stated that I would continue to (out of reach if things go wrong) who will manufacture your product (preferably local) company which can manufacture your product to sell 1 - 5000 0.50 each 5001 to 100,000 0.35 each 100,001 plus without 1. Definitions 1. Royalties 1.1 The parties agree that the following words or phrases shall have 12 months sales forecast based on minimum expectations are as follows 1st 3 months 5000 units sold month 4 4000 month 5 6000 month 6 8000 2 Own Manufacture 2% to 5% of the retail price. If you can get more, great! In the 2. Grant of right for manufacture 2.1 Mr. Flintstone grants to Cut and Run the exclusive right to 2.2 Any developments or improvements made to the mouser by Cut and 25 Southampton Buildings, London. WC2A 1AY 3 Inventors We Want To Hear From You! 3. Subcontracting 3.1 Fails to supply to third parties at least 10,000 mousers in the 3.2 defaults in royalty payments as set out in clause 5.4 for more 3.3 goes into liquidation or receivership or has an administrator 30000 month 12 37000 Total 157000 (Full forecast 400000) 4. Drawings and Technical Information 4.1 Mr. Flintstone shall describe all Technical Information to Cut 4.2 The Technical Information and all intellectual property in it 4.3 Cut and Run agrees not to disclose such of the Technical 5. Distribution and Royalties 5.1 Cut and Run shall only distribute the mouser as part of the 5.3 Mr. Flintstone may appoint an alternative manufacturer after 5.3. 5.4 Cut and Run agrees to pay to Mr. Flintstone the following 5.5 Within 7 days of the end of each month Cut and Run will give Mr. 5.6 Mr. Flintstone may check Cut and Run's records to confirm the 5.7 Cut and Run agrees to use its best endeavours to adhere to the 6. Assignment 60,000 and the Director's wife not died and the competitors not have 7. Ancillary Provisions 7.1 Mr. Flintstone will not incur any liability under the terms of 7.2 Cut and Run will not incur any liability on behalf of Mr. 7.3 This agreement shall not be construed so as to establish a : a 2000 loss in patent agent's fees for nothing. If the company want a different company and keep on trying. Don't give up. If they ask a lot of money but it is a profit. It could just as easily have been about it! abstract. At this point the Patent Office will charge you for actually designed one before you did so, again, your patent doesn't adequately, so I will not say much about it, here. If the invention advertising, postage and packing. If you can't achieve that, then I adviser such as a patent agent". (You can purchase a list of agreeing (in writing) an estimate of the costs involved. The problem agreement not to manufacture any product based on your design for agreement without the written consent of Mr. Flintstone. all want your money up-front. almost always prove "prior art"? (in other words, somebody else also make a lot less if the company decides not to manufacture it or always so. and bad ones, as in any industry. If you find a good one, please let and parts lists. and pay a royalty (usually 1% of an undefined trade selling price). and pay them the extra. and Run and supply copies of all drawings, specifications, diagrams and you know my feelings about solicitors. If you can persuade them annual turnover but, for the little guy like you and me, it is almost any bill for work unless you had an estimate in advance and agreed to any details of the product at this stage. Wait for the reply. If they any letter which they send to you and for any task which they perform anyone in the world! You may look upon this as free advertising and, apparently on a per-word basis! APPENDIX appendix is an example of a royalty agreement which you may use. application. This is not a patent simply a registration of your appoint Nixus Distribution as sole distributors for the mouser as a appointed or ceases to trade. are not terribly good at writing patent applications. Especially in as "search fees" etc. Make it absolutely clear that you will not pay back to you at wholesale prices. Again, this company must sign an BACKGROUND : based on your design without paying you a reasonable sum. This is be able to undertake the work as stated (think of possible Bear in mind that mould-tool and metal-press work tool costs can run better at making money. "How can that be" you ask. It's all too easy BETWEEN bill and left the country so he could not be pursued without bust. The royalties I received just before this event were almost carrying out a search to see if anyone else has already applied for a cases, a patent will prove to be an enormous waste of time and money. charge you in excess of 1000 for the work involved in completing the churning out widgets from dawn till dusk (although some people have circuit it is best to show it as a block diagram with a particular commits you to any further action unless you are sure that you will companies will negotiate a handsome royalty agreement with you. (Some component used. You can make "dependent claims" which contain more considerable expense and difficulty. consideration for the rights to manufacture the mouser. correct English, this is the route to go. Do read other patents to could make a lot more than that if you are lucky. To a large extent, could not afford to go to court and because the Director was in no count). Of course your lawyer can fight all this you can afford a Cut and Run will not assign its rights or obligations under this Cut and Run may sub-contract the manufacture of the mouser if the DATE: day, the company (which I shall name "Cut and Run Limited") went design might fit. You write to them explaining that you have a new design only for his or her personal use tough luck! desire to obtain one. After 12 months you can file your final details but the main claim should not be restrictive. details, they will not copy or use your design or a similar product Do not send a prototype. Arrange to demonstrate it in person. (You do Do, however, proof-read it very carefully and don't be afraid to Does it work? Is it a rip-off? I can't tell you. I don't enjoy don't mention my name! done by your patent agent! Reckon on paying 2000 just to get the Dupe Street, Cambridgeshire. CM7 8YH ("Cut and Run") effectively become the retailer. If you set up a little shop in town etc. So, what can you design which will fulfil one of those needs? examination to ensure that it meets legal requirements. Again, you expensive tooling is a good way to lose your house! experienced in patent matters is advised to employ a professional fail to reply within a fortnight or say they are not interested, try few hundred pounds then sit back and wait for the royalties to come fields such as electronics, they tend to write the claims in such a figures supplied to him and the calculation of the royalty. first 12 months of the Term; or fit state to go out of the house by now. So much for "Patent Flintstone the number of mousers supplied to third parties during Flintstone except as mentioned in this agreement. Flintstone") for your patent to be inapplicable? Do you realise that they will for and on behalf of ) Z M Beezlebrock Cut and Run Limited ) for details, send them a form to sign, stating that, if you disclose for months. fortune. Also, a shop with just one product in the window tends not from the premises without waking the occupier. gambling so I didn't pay any money. Get an estimate for the total work involved before you commit get a feel of how the things are written. Please note the warning of Getting Into Production give them technical assistance for this and any future related giving one month's written notice to Cut and Run if Cut and Run:- go horribly and unexpectedly wrong. Had C & R survived the loss of grant of a patent. However, obtaining a commercially useful patent hand until you are sure of your market. Committing yourself to Have a chuckle when you read it but remember that you can remove the have a prototype, don't you? You might manage with drawings alone but have not left very pleasant memories. Of course there are good ones having it manufactured and paying you a royalty. You do not give them here, because I don't want to be sued). his name but you've heard of him: he designed the Black & Decker hope my 1000 Agreement will be of use to you. How do I get a patent? OK. So you want to be stubborn about this! how much profit you want to make. However, the Agreement itself is quite well written. The solicitor I However, you don't believe me so I will explain further. I don't mean that you should set up in your garden shed and start I mention this true case history so that you can see how things can I've been an inventor since age ten (and I'm now 42). Gradually, as If you live or work in London you can also call in and get this If I have frightened you good! My dealings with these "professionals" If the product will fit into a small "Jiffy Bag " then life will be If this company agrees to accept your invention for production and If you are offered a lump sum, take it and run! It may not seem like ill-health) and that you will be paid for it. illness and died quite suddenly, leaving the Director of the company implementation plan as set out in the attached schedule. In fact I got that wrong. What they actually say they will do is in writing before proceeding with each stage in the application in a Doctor Who cape on a bicycle named "Tardis" will not necessarily in a state of nervous exhaustion. In brief, be very guarded in what you write and insist on estimates In my experience there are some so-called patent agents out there who in relation to your patent application. (I have to choose my wording, in some respects, it is. There are big companies scanning the lists inadequate when it comes to marketing). Royalties usually pay around incidental fees amounting to about 1000 in total. At the end of the including Security, Sex, Good health, A feeling of Importance etc. Information as is confidential to any third party, unless authorised information pack from insist on alterations if you are unhappy about any of the clauses. inspire confidence in your potential business partners. interest will also be paid at 1% per month. into tens of thousands of pounds. Try to fabricate the product by into modern houses. (When did you last see a mouse?) So, your super intoxicated by the heady euphoria of invention. Inventors and invented in his own time and at his home premises a better mouse trap invented the "Cat's Eye". Wouldn't you like to do the same? Well, the invention has no customers. We all fall into this trap while Inventors are expected to be eccentric but don't overdo it! Arriving is that your profit margin may be as little as 10%, although you is cheaper than a patent and almost as effective! is large you will need storage space and postage costs could be high. is that solicitors might forget to mention that they will charge for is to prove that their design is sufficiently different from yours it. jokes and insert your own words to make a pretty good legal document. just to get the right to take someone in the UK to court for copying killer! Do get an accurate written quotation for all work required. know how much it would cost you to do this? Do you know how easy it lawyer, can't you? Finally, if the other person is copying your layouts. "The Territory" all the Countries in the World. Lest you get the impression that "Cut and Run Limited" was a really Let me know, if you find out! letter, stating that you will not pay him any monies without first limit 0.15 each made fortunes by doing just that). Rather, you should find a friendly makes them think twice. manufacture at Cut and Run's own expense the mouser in the Territory manufacturer of the mouser and a non-exclusive distributor of the manufacturers to try to evoke interest: no guarantees. You pay up a manufacturing company can provide decent packaging, let them do it MANUFACTURING AGREEMENT market, the price has to be high -- maybe too high to sell? Think marketing then you need to draw up a contract. If you employ a marketing of my product to another company which refused to honour may be asked to amend or rewrite the patent application. You have to me know. method is the "quick killing" approach. You have designed something money and good backing. A number of very unfortunate events led to month 7 11000 month 8 14000 month 9 18000 month 10 24000 month 11 more to do with it or that profit will quickly turn into a loss. mouser and the Technical Information. mouser. Mousers supplied by Cut and Run Royalty to third parties much simpler. must pay an annual fee to keep it in force for up to a maximum of 20 My best advice would be to avoid employing a patent agent if at all nasty company, let me put the record straight. C & R was a typical nothing. Far better to spend that money in getting the thing into novel function, rather than to show the value of every little Now I shall frighten you a little more. A patent agent is likely to observations. odds are very heavily stacked against you. In roughly 99.9% of all of Mr. Flintstone whether in written form or otherwise including of new patents for any idea that they can exploit. Some of these Once the rewrite is accepted it is published but only after a full One of the booklets you will receive is entitled "How to Prepare a UK one will have bought one in the first year, yes? So who needs legal OPERATIVE PROVISIONS : outlines the main features of your design and pass it around Packaging can make a big difference (not for mail order) and, if the page essay in reply to your every question and then in billing you, partnership or joint venture. patent granted. After the end of the fourth year from filing, you patent agent who wrote the patent application hounded me for money Patent Application". This booklet is an excellent guide for anybody patent in as broad terms as possible. In the case of an electronic patent on the same or similar inven-tion. If someone has, then you patent protection or not. (OK so maybe a patent will deter some of pay for all this work done by the Patent Office and also for any work possible. If you do employ one, beware! A patent agent is to be preferably five times your total costs including manufacture, pretty airy-fairy and will not give you much legal protection but it process. Be sure to ask for a statement of incidental expenses such product (which was patented). C & R did not use its right to take product needs to be low-cost and you rely on high volume sales to get product which might be of interest. You ask if they are interested in product, in perpetuity! Wow! this was long term employment for zero production! Protection"! protection? There's no point. You will simply spend money for pursue that idea blindly without realising that mice no longer get questions without first getting a price for the answer. Solicitors registered patent agent. If you can write concise, grammatically registered patent agents from the Patent Office). relating to the use and application of the mouser in the possession renew. replied to a few, myself. I would say that, without exception, they requires a high level of expertise and anyone who is not thoroughly resolved, the market would have been flooded anyway; because C & R risk especially if they know you can't afford to pursue them through rolling in. royalties :-- Run shall be and remain the property of Mr. Flintstone. Run to keep confidential all confidential information relating to the sale to anyone other than you. Not brilliant protection in law but SCHEDULE scientists are renowned for it. But it doesn't have to be so. Secondly, a large customer of the company refused to pay his 60,000 shall remain the property of Mr. Flintstone. Signed by ) SIGNED by FRED FLINTSTONE ) F Flintstone single product in the territory. small company owned by a nice man and his wife. They had plenty of So what is the alternative to patent protection? The most favoured solicitor it is going to cost you in excess of 500, in my experience, solicitor making a healthy profit like most other solicitors. So I something already on the drawing board but let me make a few specifications, designs and calculations, diagrams, parts lists and standard list of the most important things in a person's life, sub-contractor undertakes in writing to Mr. Flintstone and to Cut and sufficient to pay the solicitor and "Cut and Run" passed the taken the risk they did, I might have been some 70,000 richer by now! Tel: 0633 814000 Ask for their full information pack. tenth of the cost of all rival products or ten times better/faster than 2 months in succession. than rival products, forget it. And if it is cheaper, are you going that the "me toos" will jump on the band wagon whether you've got that everybody wants, yes? So, if it's so good, everybody who wants That is all you need to know about patents. that month and will pay the appropriate royalty. If payment is late that you will pursue the application to completion. Do not ask any the agreement. I had no money. I could do nothing about it. The The best vehicle for selling direct to the public is Mail Order. The other thing a patent does is to make your idea available to the product simply does not sell some manufacturers are hopelessly The biggest profit is to be made during the first year or less. After the courts). the demise of the company. Firstly, the wife contracted an incurable The following Agreement cost me 700 in solicitor's bills, plus other the following meanings :-- the following paragraph which appears in the booklet: the invention as their own. It is extremely important to write the the little guys but there will be plenty who will take a calculated The Patent Office Cardiff Road Newport Gwent. NP9 1RH the price will depend on the retail price of similar products. the process. Do not make any statement in writing which might imply The simplest way (and the way to make least profit) is to sell direct the years pass, I'm getting worse at coming up with "good" ideas but There are many very good publications which deal with this subject there are more problems and bigger fees to pay! There is one man who made a fortune from a patent. You may not know these other companies to court because, by the time the case was They will promise to find a manufacturer usually in the United States think you just designed the wrong product! Think, instead, of your end goal which is (I assume) to make money. Thirdly, two other companies began to make copies of C & R's main this agreement on behalf of Cut and Run this is less likely). In any case, dress neatly and visit in person. This is not necessarily true for the big company with million pound to animal slaughter. to attract many customers! to court and sue them if they copy your design for profit. Do you to do so by Mr. Flintstone in writing. to do this, your market will be so limited that you will never make a to get their company lawyers to draw it up it will cost you nothing! to make a worthwhile profit? If you design for the mass market the to one or more wholesalers and let them find customers. The drawback to patent your invention, having paid you, let them! But have nothing to prepare and file a patent application and to follow it through to to think of a new idea "a better mouse trap", for instance and to together enough cash to take them to court, their big company lawyers treated like a solicitor. In the first instance, contact him by Try to get thirty days' credit if you can. Up-front costs are a Unless you can design something which is either completely novel, a used was not really a rip-off merchant he was just an ordinary wages! I had that clause deleted). Do not accept any clause which way that anybody could change the number of a transistor then claim What can you design which people want? You've probably seen the What does a patent do? A patent gives you the right to take somebody What to Invent? which Cut and Run shall make invent or acquire) subject to clause who wants to avoid the expense of employing the services of a will either have to drop the application or rewrite it. will even honour it like Black & Decker did). But some will just copy will wipe the floor with you. with whom I have dealt seem to take great delight in writing a three Workmate . There is another man who made his money this way: he years from the date of original filing of the application. All this You could make more money with a royalty agreement (but you could You select a company which has a range of goods into which your You should aim to make a profit of at least three times and You did say that you were going to be able to make a big profit on You have a number of options, dependent upon your circumstances and You have my permission to use it and re-write it as you wish. Just You have to find buyers for your product. You probably wouldn't have sent for this booklet if you didn't have You will make more profit by selling direct to the end user so you You will see this sort of advertisement in all the magazines. I have your design with a tiny modification so that, should you ever scrape Your first stop has to be the Patent Office. Write to: your income. If you design a specialised product for a very limited your invention, didn't you? I hope so! The Quick Killing your invention. If you want "protection" extended to other countries Your problem, here, is that you are now your own marketing company! yourself and be sure to get an estimate from him for every stage of
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