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  • Legalities of selling products to other companies

    Hey guys, Im curious what you guys think of this idea.

    I'm considering the possibility of marketing some of my projects to other companies that I do business with.

    For example I'm developing a mechanism to open, sort and stack certain chemical containers when they are mixing chemicals to service a gas well.
    All the design work, fabrication and testing is done by my shop however the company that this device is for is paying for the prototype costs.
    They have merely given me the concept of the device and the parameters with which they expect the device to operate in.

    Is it legal for me to try to sell the finished product to other companies?
    Is there intellectual or other copyrights protecting the original client from me doing this?
    If so, how do I go about obtaining legal rights over the products that I build and develop?
    Do you guys think there is an ethical issue with me marketing a developed product to other companies?

  • Bodybagger
    replied
    If you take a good demo to a record company and they tell you they aren't interested and wish you luck with your song, don't be surprised in the least if you hear someone else singing it on the radio 6 months later!

    When money is involved, people always find a way of screwing each other over.

    If you need eye surgery, you don't go to a family doctor. You go to an eye surgeon. If have in intellectual property issue, you don't just go to any lawyer (unless you want to hasten the screwing process). You go to a lawyer specializing in intellectual property.

    In the mean time, you might want to read the material here:
    http://ocw.mit.edu/OcwWeb/Sloan-Scho...03/CourseHome/

    Leave a comment:


  • Freelance Fabber
    replied
    Thanks again harv, yea that was kind of my thoughts on claiming it's 'patent pending'.

    Given the nature of this device I think I need to show it around a bit to see if there's any interest in it all before I start investing thousands, and years of time on a patent. It's going to be relatively expensive to produce as well so I'm not sure if anyone else would be willing to lay out the cash for this thing.

    So my thoughts are to produce a few more of these things, a half dozen at the most, then go around localy and guage the response on them, sell a few perhaps with that conditional contract you mentioned and if it looks like they might be some decent interest I'll start with the patent process. I'm still sifting through the US and canadian patents to find something similar. Hopefully by the end of summer I'll be going forward on this!

    Leave a comment:


  • c wagner
    replied
    Originally posted by Freelance Fabber View Post
    Thanks for the replies guys. Especially wroughtn's perspective as a patent holder.

    Well, I decided to deliver the 2 prototypes that I finished yesterday for final testing by the guys who will be using it. After playing around with the machine a bit, the first thing out of the manager's mouth was " you need to patent that"
    So we talked about that very thing, and as far as this manager was concerned I completely owned the idea of the machine and they were happy to simply have a working copy to save them the manual backache of doing the task by hand. I even mentioned selling this product to their direct competitors which he thought would be fine.

    Today was an exciting day, I'm taking several detailed pictures of it tommorow and redoing my drawings on it to at least make it easier for me to reproduce it without much trouble.

    How much does it cost to patent something harv? I think I might pursue that avenue if other companies show interest in this device.
    Congrats, that's awesome when everyone is on the same page.
    Keep us posted on how you make out with this venture.

    Leave a comment:


  • wroughtnharv
    replied
    Originally posted by Freelance Fabber View Post
    Well I'm going to start trying to sift through the candian and US databases and see if I can find a similar device that has already been patented. In the mean time I am going to go around and try to sell my original prototype and see if it looks to be a desirable contraption for anyone (I'll tell them its patent pending. pending on me applying for a patent :P)
    if they seem popular I have to sit down and see how many of these I would have to sell to recoupe the costs of patenting and perhaps tooling to mass produce these things. If it looks viable I will start to look further into patenting my second slightly more complex prototype.

    Thanks again guys, I'll let you know how it goes
    Two things to keep in mind. The most important one is the more you show off your product the more put the ability to patent it at risk. So you need to have anyone that sees what you have sign a confidentiality/non-compete agreement.

    The other thing is patent pending is not unlike the rattle of a rattlesnake. It's a warning that you're prepared to strike if threatened.

    The reason we claim patent pending is to warn others that when they infringe on our idea they're are taking a serious risk. Because if and when we get a patent they are not only susceptible to being sued for infringing but all the profits they made and penalties for doing so.

    If they see your idea and start producing it before you apply for the patent two very bad things happen. First is they can do it with impunity. Second, you can't get a patent.

    Now they publish patent applications. But back in the day they didn't. So one of the games played was keeping the patent pending as long as possible. That way competitors wanting to find another way to skin the cat wouldn't know your claims and risked infringing if they brought out something similar.

    Leave a comment:


  • 1havnfun
    replied
    Congradulations
    that worked out great

    Leave a comment:


  • Freelance Fabber
    replied
    Well I'm going to start trying to sift through the candian and US databases and see if I can find a similar device that has already been patented. In the mean time I am going to go around and try to sell my original prototype and see if it looks to be a desirable contraption for anyone (I'll tell them its patent pending. pending on me applying for a patent :P)
    if they seem popular I have to sit down and see how many of these I would have to sell to recoupe the costs of patenting and perhaps tooling to mass produce these things. If it looks viable I will start to look further into patenting my second slightly more complex prototype.

    Thanks again guys, I'll let you know how it goes

    Leave a comment:


  • wroughtnharv
    replied
    Originally posted by fjk View Post
    From what I recall about patents/etc, you guys are right.
    Except that the original poster is in Canada
    Different rules, different system, etc :-)

    Frank
    I'll bet it's not that different.

    The reason I say that is I've known quite a few canuckies living in the southwest and them being snowbirds and all.

    Leave a comment:


  • fjk
    replied
    From what I recall about patents/etc, you guys are right.
    Except that the original poster is in Canada
    Different rules, different system, etc :-)

    Frank

    Leave a comment:


  • alanrockwood
    replied
    It looks like you have already resolved your main question in this case.

    However, let me make one comment. (I am not a lawyer by the way, so do not take this as authoritative legal advice.) It is my understanding that if you are not an employee then US intellectual property law gives the right to the intellectual property to the creator unless there is an agreement that explicitly transfers the intellectual property rights to someone else. For example, if you are an independent contractor that creates intellectual property, then that property belongs to you unless there is a contract that explicitly transfers the intellectual property to someone else, such as the person paying you for the work.

    I will not attempt to discuss the case when someone is an employee.

    Leave a comment:


  • wroughtnharv
    replied
    I'm a believer. I'm one of those guys who always buys one lottery ticket because I believe someone will win and I have as much a chance of winning as the next guy.

    That's why I am going for the next idea to be patented. This one I believe can be one of those things that can change the way things are made. It's one of those ideas where me not being as smart as everyone else and seeing things a little differently can pay off.

    One of my problems is I"m not interested in being in business of making and selling things. I want someone else to take my ideas and get very very rich off of them. I want them to get so rich that they can make me rich with a six to ten percent cut of their richiness.

    Before I have the patent on the structure there is no reason for anyone to buy the idea from me. If I didn't get the patent then they can do it for free. But now that I have the patent almost in hand I have something to sell. I have a great product that a company can make and market and not worry about someone copying it because it's patented. They get exclusitivity and I get a small cut. Once again, I hope they get very very rich off of my idea.

    Most patents are about protecting the inventor's company from competition. I'm not one of those types of inventors.

    Leave a comment:


  • wroughtnharv
    replied
    Originally posted by Freelance Fabber View Post
    Thanks for the replies guys. Especially wroughtn's perspective as a patent holder.

    Well, I decided to deliver the 2 prototypes that I finished yesterday for final testing by the guys who will be using it. After playing around with the machine a bit, the first thing out of the manager's mouth was " you need to patent that"
    So we talked about that very thing, and as far as this manager was concerned I completely owned the idea of the machine and they were happy to simply have a working copy to save them the manual backache of doing the task by hand. I even mentioned selling this product to their direct competitors which he thought would be fine.

    Today was an exciting day, I'm taking several detailed pictures of it tommorow and redoing my drawings on it to at least make it easier for me to reproduce it without much trouble.

    How much does it cost to patent something harv? I think I might pursue that avenue if other companies show interest in this device.
    It's expensive.

    You can do it yourself if you're really sharp and have lots of time, especially internet savvy kind of time.

    But the whole thing about a patent is it's license to litigate. That's because no one but the patent holder has the right to enforce the patent. The sheriff isn't interested and no one cares but the patent holder. So what the patent does is give the person holding the patent the right to take anyone that infringes upon that patent to court to enforce the patent. That's on your nickel, you pay for the attorney to sue and hopefully you will prevail and they will stop infringing upon your patent and pay you enough to make it worthwhile suing them to stop.

    So first and foremost a patent is about lawyers. Get over it. Live with it and hopefully profit from it. Get a good intellectual law firm and give them money when they ask for it and hold on for the ride.

    It's also a game sorry to say. The first thing the patent examiners do is say no. They say no for the stupidest of reasons and they do it often and oftener. Everytime they say no the tab goes up because you have to pay for an appeal and for your attorney to come up with and file the appeal.

    A simple thing can get done with few problems for fifteen to twenty thousand dollars. Anything more complicated can go a lot more than that. And something to keep in mind is someone can have patented a machine that operates a lot like yours and does something completely unrelated. Their patent attorney can see your application and then you've got to pay them for infringing or stop producing, maybe both.

    That's why the best thing you can do is to go to the official uspto (united states patent and trademark office) and do a search for your idea. It takes a little practice and you've got to put in a ton of different terms but you can do a basic patent search yourself. If you've asked the question everyway you think possible and nothings like your idea then you can take it to an intellectucal property attorney and let them go after it.

    A couple of don'ts.

    1. Don't try to do it yourself. That's because you're dealing with patent people who speak patentese. If you don't speak the lingo then you're not going to understand what's being said. The other thing is it's about suing. If you do it on your own you're putting up a billboard that says you can't afford a good defense of your patent if you got one. That tells an infringer that they can infringe with impunity because it's a war and you don't have an army.

    2. The only thing worse than doing it yourself is falling for one of the inventor's help sites you see advertised in the newspapers and on the television. They're not in the business of helping inventors. They're in the business of profiting off of the dreams of inventors. And when that good idea comes across their plate the inventor ends up with the smallest piece of the pie he could ever get and still be the inventor.

    3. It takes time. The one I just got the letter of allowance for was originally filled in 2006. The first objection from the patent office involved too many claims, we had twenty, they wanted two applications, ten claims each, twice the fees, make sense? So we divided it up between method and structure. That was 2008. We've been given the letter of allowance for structure and the questions and compromises look real good for for method this year, again, twice the fees.

    http://appft1.uspto.gov/netacgi/nph-...FIELD2=&d=PG01

    This is a patent I got for a cart that's still produced. It was back in 1991 and I've never made a dime on it. A friend of mine makes and markets it.

    Back then it took a couple of years and only cost about three thousand dollars. But I was so burnt over the process that I swore never again.

    I've changed since then, older, and maybe not wiser.

    http://patft.uspto.gov/netacgi/nph-P...y+AND+IC/plano

    Leave a comment:


  • Freelance Fabber
    replied
    Thanks for the replies guys. Especially wroughtn's perspective as a patent holder.

    Well, I decided to deliver the 2 prototypes that I finished yesterday for final testing by the guys who will be using it. After playing around with the machine a bit, the first thing out of the manager's mouth was " you need to patent that"
    So we talked about that very thing, and as far as this manager was concerned I completely owned the idea of the machine and they were happy to simply have a working copy to save them the manual backache of doing the task by hand. I even mentioned selling this product to their direct competitors which he thought would be fine.

    Today was an exciting day, I'm taking several detailed pictures of it tommorow and redoing my drawings on it to at least make it easier for me to reproduce it without much trouble.

    How much does it cost to patent something harv? I think I might pursue that avenue if other companies show interest in this device.

    Leave a comment:


  • wroughtnharv
    replied
    Originally posted by Freelance Fabber View Post
    Hey guys, Im curious what you guys think of this idea.

    I'm considering the possibility of marketing some of my projects to other companies that I do business with.

    For example I'm developing a mechanism to open, sort and stack certain chemical containers when they are mixing chemicals to service a gas well.
    All the design work, fabrication and testing is done by my shop however the company that this device is for is paying for the prototype costs.
    They have merely given me the concept of the device and the parameters with which they expect the device to operate in.

    Is it legal for me to try to sell the finished product to other companies?
    Is there intellectual or other copyrights protecting the original client from me doing this?
    If so, how do I go about obtaining legal rights over the products that I build and develop?
    Do you guys think there is an ethical issue with me marketing a developed product to other companies?
    I don't know what your relationship is with your clients. But it sounds like you're a go to guy for them. Since it's a fifty fifty proposition, they provide problems and you provide solutions, then I believe you should approach them with a fifty fifty concept on manufacturing and marketing. You might find yourself a long term gold mine, mailbox money for a long time to come, and share the risk while you're at it.

    Leave a comment:


  • wroughtnharv
    replied
    Originally posted by bellamachinery View Post
    The way I see it, if you came up with the design, fabricated it yourself and the only thing that they had to do with it was coming up with the original concept of it, it's your baby. [b]Put a patent on it before you turn it over to them.[/p] They might be paying you but they are paying you for DELIVERY of the final product, not the DEVELOPMENT of that product. That would be like one of us calling up Miller and saying that we want a device that fuses wire together that will allow us to run wire through a feeder continuously when changing spools. Even if we paid for one in advance, they designed it so they own the rights to it. But like I said, this is just the way I see it.
    Obviously you haven't been to patent land lately. I've been involved with one patent that turned into two for almost four years and twenty three thousand dollars now. I was just given a letter of allowance (the patent's mine after fees are paid, done, and it's published) on one and am expecting the second one on the same product this year, patent gawd willing.

    I'm trying right now to put together an entity to patent something else. We're looking at a lot of money and probably five patents to get it done. A lot of money is in the quarter of million dollars range.

    Leave a comment:

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