PRODUCT DEVELOPMENT SCENARIO & ROYALTIES
Inventors and Eagle Innovations work together through the following sequence. You may be part way through it already, or you might need to back up and rethink one or more steps.
1-NEED RECOGNITION – Is the function new, or how is it being done now?
How much would someone be willing to pay for a new or better way to do it?
2-IDEAS for SOLUTIONS – List all conceivable ways of accomplishing the function, besides the way you now have in mind. Assume that someone will invent around you.
3-MARKET RESEARCH – How big is the market? What products are serving the market need now?
4-PATENT SEARCH – What similar products have been patented? (Only 5% of patented products reach the market; the other 95% must be searched out of the patent files.) What design ideas could be legally taken and incorporated from existing patented drawings? Eagle Innovations will do the patent searching.
5-PRODUCT DESIGN – Have you got (at least) a sketch that I can start with.
Steps 5, 6 & 7 may be done by either Eagle Innovations or the inventor, but preferable in a cooperative effort. Steps 5, 6 & 7 go around in a loop until the design is perfected and/or costs are optimized.
6-PROTOTYPING – then design modifications.
7-TESTING – then more design modifications.
8-COSTING – must be considered beginning in the design phase. Cost is influenced by alternative manufacturing methods and by production and sales volumes.
9-PRICING – How much would people pay for this, compared to similar products?
10-MARKETING – Most likely, your product will be licensed to another company and they will market it.
11-MANUFACTUING – See 10 above.
12-PATENT APPLICATION – A low-cost Provisional Patent Application ($75) allows 12 months to test-market the product, etc. By then the Final Patent Application must be filed ($1000 ++). Eagle Innovations can handle (but not pay for) both.
ROYALTIES – There are three options for commercializing your invention.
(A) If Eagle Innovations arranges a licensing contract directly between you and another company, Eagle Innovations will earn 50% of the royalties that you receive. This may vary depending on what stage you are in. (Most likely)
(B) If Eagle Innovations licenses it from you and then sub-licenses it to another company, you will receive 50% of the royalties that Eagle Innovations receives. (Less likely)
(C) If Eagle Innovations manufactures and markets it, you will be offered a 5% royalty on the selling price. Eagle Innovations will incur all costs; you will not be required to pay for anything. (Quite unlikely).