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INSIGHT: Be careful when revealing product ideas |
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By Mari Beth Baumgerger For the Sioux Falls Business Journal
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Tuesday, 21 August 2007 |
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Today’s inventors and entrepreneurs face decisions, challenges, successes and failures starting up their business.
Many innovators and early-stage companies struggle with what direction to turn for commercialization assistance.
 Mari Beth Baumberger
While it is up to entrepreneurs to choose who will help them with their businesses, I encourage innovators to carefully do due diligence in researching potential business associates before sharing their ideas or making financial commitments.
In short, do your homework.
First, make sure that a solid, mutually agreed upon nondisclosure agreement or a statement of confidentiality is signed before revealing the secret sauce of your invention. Also use caution and consult a patent attorney in any circumstance that could be considered public disclosure of your idea.
Next, inquire about intellectual property protection. Intellectual property includes patents as well as trademarks and copyrights. If you decide to work with a company that will assist in prototyping or commercializing your product, make sure provisions will protect your intellectual property through proper legal channels.
Look for worthy deliverables such as patent-search results, a patent opinion, a provisional patent application or a full patent application. This protection is crucial if a company is contracted to prepare and present product ideas to potential licensees.
Be cautious of commercialization assistance companies that have had multiple name changes or DBAs – Doing Business As. This can be a red flag for a coverup of unfavorable public opinion or lawsuits against the company. This type of information surfaces in a company analysis and much of the data is publicly available. Dunn & Bradstreet is an available resource for company information.
Read company disclaimers, and be alert for statements that indicate they are not responsible for determining if there is a market for your product.
Language such as “does not provide evaluation of market potential” or “does not perform analysis of the potential feasibility, marketability, patentability or profitability of ideas submitted” are indicators that they do not provide feedback to clients. Determining presence of a market cannot be passed over.
It is simple to do an Internet search to determine customer satisfaction with companies and verify claims.
Remember, there are reputable firms that conduct product research and assist with prototyping. Make sure you are confident in the company’s ability to deliver and its general business practices before you make it a part of your commercialization strategy.
Lastly, thoroughly analyze contracts and have an attorney review them before signing and writing your check to a potential assistance company. Compare specific deliverables and their value to the amount of money required. Mari Beth Baumberger is the assistant director of alternative finance at the Enterprise Institute. |