Over the next several weeks we will be publishing extracts from:

Take The Plunge – 101 things you need to know before starting your own business

by Michael Carter

 This week: Invention

You’ve invented something. It could be an item which is both unique and patentable and you’ve already started a dialogue with a trade mark agent. It could be a new piece of computer software, a piece of music, a novel perhaps or it could be an improvement on an existing idea.

That’s really good, but how are you going to exploit it? Firstly, is it really yours to exploit? We have to ask. The guy who invented the Bratz doll, invented it in his spare time while working for Mattel who own Barbie doll. Success of the Bratz doll encouraged Mattel to claim ownership rights as the guy had been inventing while on their payroll – and won the case. Many, many inventions and improvements arise from observations during the course of your work. If you have any doubt at all, start by reading your employment contract and see what rights you have already signed away.

Why so important? Because in many cases your most likely customer is going to be your previous employer. So while we haven’t yet talked about routes to market and specifically licensing, take it as a given that your proposed customer won’t want to pay you again for something you created on his time!

If you have written music, chances are that snappy riff came into your head from somewhere else. Bach & Beethoven pieces pepper the pop world of today in this way but fortunately neither is up for claiming royalties. But again, someone who laid down a three minute track called ‘Silence’ (because that’s what it was) is now paying his royalties over to someone who got in earlier with a similar four minute recording.

The reason for the diversion into music is that the performer is very often not the composer – the different roles clearly being financially sorted by the paying of royalties. The same method is frequently used in business. Chances are if you designed a new type of vehicle for instance, rather than setting up a production line from scratch you’ll look for an existing manufacturer who will pay you a licence fee (or ‘royalty’ if you prefer) and do the manufacturing for you. Depending upon the set up, you might also licence him to sell the product for you especially if he already has good connections with your target customers. Then, provided you’ve picked the right manufacturer and got a decent, watertight licence agreement, you should sit back and wait for the royalties to roll in.

But if you want to do it yourself, read on.

Top tip: Try networking and see if you can find a commercial lawyer who might give you some initial thoughts for free

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