What do I legally do if companies are interested to manufacture my product? 7 Answers as of March 05, 2014

I have a granted a US utility patent for manufacturing. I talked with 3 different manufacturers in United States about the possibility to manufacture it, and the thing was that unexpectedly the 3 showed genuine interest in my product. They do not know that I have talked (in secret) with their own competition, yet. Actually was not my intention because I expected only one of them to show interest. What I do now? Do I suggest them a license? How and what type of license? What if one of them want absolute control? I have no idea what to ask for the license or what percentage I should be entitled. In the first conversations, they insinuated me (in shy way) to contribute with some amount of money but they never divulged it to me, yet. In this moment, after spending over $20,000 in patents, attorneys, materials, and trips, I am not enthusiastic at all to spend more, so I do not want to enter in a joint-venture, etc.


Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Law Office of Robert M. White, PLLC
Law Office of Robert M. White, PLLC | Robert M. White
Although you've spent a good deal of money to obtain a patent for a product, which obviously garners significant interest, it is advisable to contact an attorney experienced in negotiating and drafting appropriate business documents such as a licensing agreement. The manufacturers, regardless of any discussion you may have had with them, will look out only for their best interests. They are in business to make money which requires them to manufacture goods at the lowest possible price. As such, you require representation who is looking out for your best interests. To highlight the conflict of interests mentioned, an example using potential licensing agreements can be illustrative. For example, it may be in your best interest to enter a non-exclusive licensing agreement with each manufacturer in order to maximize your potential for profits. However, each manufacturer will likely insist on an exclusive license so that they are the only ones who can manufacture the product. Similarly, you may find that an exclusive license is suitable because other manufacturers are sub-standard in quality or to demonstrate commitment on your part. However, making a determination of any sort requires dedicated evaluation of the circumstances of your situation. Experienced legal representation, although it comes at a cost, can prevent the loss of substantial revenue that you would've otherwise earned with proper agreements in place. Hope this helps!
Answer Applies to: North Carolina
Replied: 3/5/2014
Sebby Law Office
Sebby Law Office | Jayne Sebby
Congratulations on your success. First, you need to decide which company you want to work with to distribute your product. Next, you need to find an attorney to draft a licensing agreement for you to present to this company and to negotiate the final terms if you aren't comfortable doing that on your own.
Answer Applies to: Nebraska
Replied: 2/5/2014
DANIEL NESBITT
DANIEL NESBITT | Hasse & Nesbitt
Consult directly with patent attorney, perhaps the patent attorney who handled your patent, since she probably best knows your product. Your situation seems too complex to be answered with yes-no and basic licensing answers.
Answer Applies to: Ohio
Replied: 2/4/2014
Microtechnology Law & Analysis | Daniel Flamm
For all of the reasons you mention prior to the last sentence, enthusiastic or not, you should hire a patent and licensing attorney to resolve these issues for you. The descriptive terminology is "cost of doing business."
Answer Applies to: California
Replied: 2/4/2014
Banner & Witcoff, Ltd. | Ernie Linek
Be honest with all three - you have discussed your product with all of them. One option - the highest bidder gets an exclusive license ($$) or can purchase the patent rights from you ($$$). Under an exclusive license - you need minimum yearly royalties - or the license terminates or goes non-exclusive. Another option - all three can have non-exclusive licenses. Many non-exclusive licenses are a paid "up front" variety. You pick a number and they pay once. One & done - you have the $ and they can sell or not sell. Often license fees are "per part" if your product is incorporated into another product; or a "percentage of the sale price." 1-10% range is typical in some cases. Look for sample license agreements on Google. In all such cases - you need a lawyer to help you. Sign NOTHING without checking with your lawyer. Pay NOTHING without checking with your lawyer.
Answer Applies to: Massachusetts
Replied: 2/4/2014
    Law Office of Kirk Buhler
    Law Office of Kirk Buhler | Kirk A Buhler
    There are generally two different types of licensing agreement. An Exclusive licensing agreement will allow only one of the companies to produce your product. A Non-Exclusive licensing agreement will allow you to license all three (or more) companies to produce your produce. Typical exclusive royalty is 4 - 6%. It can be more for medical, drug or cosmetic products, and could be less for automotive products (under 1%). A licensing agreement usually is for a royalty and sometimes also includes an up-front lump sum to cover some or all of your expenses to get patented. You can also sell the invention to just one of the companies for a fixed amount without royalty. Since I don't know the product or the companies, you should probably talk to your patent attorney for specific advice regarding your situation.
    Answer Applies to: California
    Replied: 2/4/2014
    Mark S. Hubert PC
    Mark S. Hubert PC | Mark Hubert
    Licenses are not easy to negotiate and harder to draft properly. I have extensive experience in both. If you need help please feel free to contact my office.
    Answer Applies to: Oregon
    Replied: 2/4/2014
Click to View More Answers: