Selling an invention without a patent is often a challenging process for inventors because simply put, a product without a patent is not very attractive to prospective buyers. A patent provides critical intellectual property protection for the patent's holder, who may be the inventor or buyer.
Selling an invention without a patent can be challenging for a few reasons. One is that without the protection that comes with a patent, potential buyers are less inclined to invest in an invention because of the possibility that the idea will be taken and used by competitors. Another reason is that it pushes the cost of obtaining a patent onto the buyer, making an investment in the unpatented idea more complex and expensive. It is not impossible to sell an idea without a patent, but it can be a risky, stressful process for the inventor.
Why a Patent Is Important
A patent is a type of intellectual property protection granted by the United States Patent and Trademark Office (USPTO). Patents may be granted to inventions, chemical compositions, human-created plant species and processes.
Selling an idea without a patent is often difficult for inventors because without a patent, an idea has no monetary value. Anybody can come up with an idea, but only the person who has the potential to profit from that idea is the one who will invest in protecting the idea and implementing it.
Filing a Provisional Patent Application
Many inventors who cannot afford to file full patent applications opt to file provisional patent applications with the USPTO. Filing a provisional patent costs $65 for micro entities, $130 for small entities and $260 for large entities.
When an inventor files for a provisional patent with the intention of selling an idea without a patent, she receives an early filing date for an eventual full patent application. What this means is that if the application is accepted, her invention is granted patent pending status for the next 12 months. Once the 12-month period elapses, the inventor must either file for a full patent or risk losing patent protection. A provisional patent applicant has to meet fewer criteria than must be met by a full patent applicant.
Maintain All Critical Records
An inventor intent on selling an idea without a patent can make the process easier by securing a provisional patent and then, in the months that follow, securing investors and a distributor to develop and eventually distribute the product. To increase the likelihood that he will sell the idea without a patent, the inventor can take key steps to help the distributor secure a full patent. These include:
- Maintaining an inventor’s logbook of all invention developments.
- Producing documents that provide comprehensive information about how the product works and the niche it fills.
- Creating diagrams that illustrate how the product works.
- Producing a working prototype of the product.
Work With a Reputable Distributor
When an inventor decides to sell an idea without a patent, he might still want to retain some interest in the product and its future, including future profits. To ensure that he retains this control, an inventor can work with an intellectual property lawyer to create a contract that restricts the distributor from disclosing key secrets about the product and grants to the inventor compensation in the form of a lump sum payment or ongoing royalties. This contract should contain a nondisclosure agreement, or NDA, that explicitly states the nature of the product and the extent of the contract’s protection.
Inventors should keep in mind that even when they draft seemingly secure contracts to protect their ideas when they sell an invention without a patent, the ideas remain fairly vulnerable to unauthorized use by their distributors and competitors. This is because without any type of intellectual property protection, which could be a service mark or a trade secret instead of, or in addition to, a patent, an idea is just an idea that can easily be taken and used, either in a modified form or in its original form.
Working with a reputable distributor to produce, market and sell a product can be the key to selling an invention without a patent, but it requires a significant amount of trust and integrity from all involved parties.