Trying to create a market for your invention rises to another level of difficulty.
Invent for an established market. Competitors are not always your enemies.
BY JACK LANDER
Working as an assistant to a patent attorney in the early 1930s, Chester Carlson was frustrated with the slow and clumsy process of copying and mailing copies of patents from the United States Patent Office of the ‘era.
The only way to make reasonable quality copies of documents was the Photostat process, which created a black copy with a white print using photography and its chemical development. It was obvious to Carlson that someone had to invent a much simpler and cheaper process, if only to allow the patent office to quickly copy the tens of thousands of patents that patent attorneys and inventors wished to have.
Carlson began working on a dry copy process in 1934 and was able to demonstrate his photoelectric/electrostatic process in 1938. Originally called electrophotography, it is now called xerography.
He contacted 20 companies that should have been interested in his process. Presumably he demonstrated this to some of them but received what he later called “enthusiastic disinterest”.
Most likely, the complicated eight-step process discouraged potential licensees. Not only was the number of critical steps raised eyebrows, but the application of a high-voltage electrostatic charge in two of them raised safety concerns.
Finally, in 1944, the inventor, physicist, and patent attorney convinced the Battelle Memorial Institute in Columbus, Ohio, that his process could be mastered, automated, and housed in a cabinet that would not reveal a mechanical monstrosity. The first Xerox® machine was produced in 1958.
What can we learn from Carlson’s adventure? Some possibilities:
- Avoid complex technologies unless you have a deep-pocketed sponsor, and are patient and willing to wait for discouragements.
- If you’re moving forward with complex technology, don’t disclose it in detail until you have at least a nondisclosure agreement. If you show it too soon, your prospect’s engineers will get involved in their evaluation. The NIH factor (not invented here) could kill the deal.
- Don’t invent a product for which there is no market demand yet. The offices of 1938 make do with carbon paper and the printing press. They had no indication that a paperwork revolution was coming in a few years.
- Don’t invent a product for which you will have to create the market. Once the product is in the market and its value is understood, it can create its own market. It can even change the nature of work and become a practical necessity, as the cell phone has done. But launching such a product is risky and expensive.
In the previous issue of Compendium of inventors, I wrote about Robert Kearns, the inventor of the intermittent windshield wiper. Kearns’ invention ran into Ford’s attempt to develop a vacuum wiper delay. (Windshield wipers were powered by vacuum from the vehicle’s intake manifold at that time.) Thus, the need for his invention was already understood.
But in Carlson’s case, there was no convenient desktop copier, so he had to convince potential licensees that a substantial market was waiting to be filled. It may seem obvious that the leaders of our big companies would immediately seize the opportunities offered by the invention, but do not depend on it.
The difference between Carlson’s situation and that of Kearns may seem slight, but these details often make the difference between success and failure.
Is it possible to set out principles offering general guidance for the licensing of inventions? Sure. But these principles are not absolute. Exceptions exist.
So here it is:
- Invent for an established market. Competitors are not always your enemies. If your invention offers one or more benefits that your competitors don’t, you should be able to capture a share of the market.
- If you need to invent for a market that doesn’t yet exist, try selling before trying to license. Catalogs and door-to-door sellers, such as QVC and HSN, are market channels that introduce new products. You will probably need a financial partner. Producing enough for market testing is expensive.
- Before investing in a patent and prototype, assess the market for its position on its life cycle. You are looking for the “sweet spot”, the position on the upward slope of the life cycle curve where you find one or a few competitors, but not enough for your product to be overwhelmed.
- Ask about patents. They are not infallible. They are easier than ever to challenge and break. Sometimes success is best achieved by entering the market without a patent and exiting when the profit dries up. Engage a patent attorney whom you feel you can trust to give you objective advice on the general theory and practice of patent protection.
- In the end, Carlson and Kearns succeeded, even though each was on the verge of failure once or more in their long endeavor. Be aware that failures often go unnoticed, and there are likely many more than successful ones.
- Avoid the “inventor’s dream” of inventing something that everybody needs or wants. Stick to inventions with a limited market that you can license to small and medium-sized businesses. If you succeeded in inventing something that everyone would buy, you would probably face immediate large-scale competition that would bury you. Moreover, as in the case of Robert Kearns, inventions that have very lucrative markets may encounter opposition from well-meaning industries or corporations who claim that inventions in their field belong to them by right of “manifest destiny”. “. And, of course, you’ll face legal staff who won’t accept a “guilty as charged” verdict.
At a minimum, the principles above should be used as a checklist before you start spending a significant amount of money on your latest big idea. Infatuation can get you in trouble.
That’s all for the moment. I have to go. I’m expecting a phone call from a vice president of General Motors.