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THE ONLINE INVENTOR -- July 2001

www.marketlaunchers.com

Publisher: Paul Niemann

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Article # 1: "Direct Marketing: A New Product Launching Pad," by John TenBrink of CPO Direct (www.cpodirect.com)

Article # 2: "The Disclosure Dilemma: An Inventor’s Catch-22," by Mike Marks of InventionCity.com

Article # 3: "Two Things You Should Know when Conducting Your Market Research," by Paul Niemann of MarketLaunchers.com

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Article # 1: "Direct Marketing: A New Product Launching Pad," by Joyce Cusack of CPO Direct

"I have a new product, why use Direct Response Marketing?"

Direct response marketing has been a growing trend for over ten years, generating billions of dollars. It shows every sign of continuing as a hot vehicle for new product launches. More and more inventors and companies are using direct response marketing for its amazing benefits and convenience.

What is direct response marketing? Direct response marketing is defined as any form of advertising that generates an affirmative response from the consumer. The response could be in the form of requesting more information to ordering the product. Vehicles used in direct response are short-form (30 seconds to 2:00 minutes), long-form (28:30 minutes), newspaper, magazine, out-of-home, and Internet.

An enormous benefit to direct response marketing is its ability to create quick sales. Having your product demonstrated on TV or discussed on the radio allows you to drive home your message with persuasive, dramatic impact. The consumer then has the opportunity to see and hear why your product is so good and how it differentiates itself from others on the market. Show, tell then sell the dream and magic of your product!

Another benefit to direct response is the opportunity to harvest consumer information into a very targeted customer database for future implication. This provides you the added benefit of hitting your audience again with a very strategic and targeted cross-promotion of products, increasing your chances of producing sales from a highly targeted group of loyal consumers.

All in all, direct response marketing is the answer for new product launches. No other vehicle is as cost effective and profit producing. Direct response generates quick market penetration, helps build brand awareness, and provides you measurable results to test against performance.

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For more information on how Direct Response can generate sales and build brand awareness, contact Joyce Cusack at 312-396-8748 or click on the link at http://www.cpodirect.com

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Article # 2: "The Disclosure Dilemma: An Inventor’s Catch-22,"

An inventor’s greatest fear is often that someone will steal his or her idea. This fear is justified and is a good and understandable reason to keep an idea secret. With few exceptions, however, an inventor needs help to turn an invention into a product. Secrecy is an impediment to getting help. This is the dilemma: those most useful and capable of giving help may also be those to be most feared. The dilemma begins at the concept stage when an inventor wants to confirm the validity of an idea and continues through distribution when a product is publicly sold.

An inventor can protect "proprietary rights" with patents and confidentiality agreements. Often, however, the protected "proprietary rights" are far less than an inventor would like. The "proprietary rights" granted in a patent exclude anything obvious or already known in the public domain. The "proprietary rights" generally acknowledged in a corporate confidentiality agreement are limited by what is known in the public domain along with what may be disclosed by other inventors and what may already be known or in development at the company itself.

The definition of what is in the public domain may cause more grief for an inventor. It is a vague concept that may include not only all of the expired patents in all countries of the world but also all written records available in all of the libraries of the world... and more!

How, short of getting a patent, does an inventor know if his or her idea is really unique and not in the public domain? He doesn’t. Even when a patent has been issued, it can be challenged. In what can only be described as a Kafkaesque nightmare, an inventor may never really know if a patent is any good until a law court has, at great expense, actually ruled that it is.

At this point the inventor may feel daunted and decide that since the entire body of knowledge of mankind, since the beginning of time, might be considered public domain, then almost any idea can be legally stolen. This is sort of true.

BUT, this stretches a little far. Most patents are respected and challenging a patent is difficult. Respectable companies are not in the business of stealing ideas from inventors. In fact, most companies cherish inventors and place a high value on new ideas, especially marketable ideas that receive patents. (For general information on patents please refer to the article, Protecting Your Invention. For more detailed information please consult with an attorney and refer to the book, Patent It Yourself).

Moreover, at this early stage, most individuals and companies are too busy with their own plans and ideas to really take the time to steal someone else’s idea -- no matter how good -- with one, very crucial, exception. If an inventor allows a company or an individual to invest time or money in an idea, then the investor will feel certain rights to that idea.

An inventor might therefore be only somewhat careful with disclosure (maintaining special respect for patentability issues) and petrified of investment.

In my own company, WorkTools, Inc. we have resolved the disclosure dilemma in the following way. (PLEASE NOTE THAT THIS IS NOT A RECOMMENDATION AND INVENTORS ARE ADVISED TO CONSULT WITH A PROFESSIONAL ADVISOR BEFORE MAKING ANY DISCLOSURE. The following is only an example of what WorkTools has done). WorkTools is in the business of developing and licensing patented hand tools and other consumer products. Because patents are expensive and many ideas are not worth the cost of a patent, WorkTools’ projects are often disclosed to certain individuals and companies before a patent has been applied for. The disclosure process is crucial in determining an idea’s commercial viability and, in turn, the value of obtaining a patent. WorkTools’ disclosure process can be seen as a series of steps.

STEP 1 -- PRODUCT EVALUATION: Using a process similar to the Invention City Survey, WorkTools’ employees survey family members and close friends. In general, if at least 50% of those surveyed do not say "yes, I would buy it," an idea is dropped. This survey process may also be extended to professional acquaintances such as car mechanics, carpenters and plumbers. No formal confidentiality agreements are used, but each person with whom the idea is shared is told that the disclosure should be kept secret.

STEP 2 -- MANUFACTURABILITY EVALUATION: At this stage WorkTools is engineering the product for manufacture and is in contact with numerous outside companies. Each company contacted by WorkTools is asked to sign a confidentiality agreement.

STEP 3 -- DISCLOSURE TO PROSPECTIVE LICENSEE: By this time WorkTools will have filed at least a Document Disclosure with the US Patent and Trademark Office and probably has begun the patent process. Each company contacted by WorkTools is asked (or demands of WorkTools) to sign a confidentiality agreement. WorkTools believes in disclosing an idea to only one company at a time. This gives the first prospective licensee a real competitive advantage over others in an industry. WorkTools encourages a prospective licensee to invest in a WorkTools’ invention believing that the more a company invests the more likely a licensing agreement will be reached. WorkTools begins this process with its best or favorite prospect and only moves on to other companies if the first prospect says "no." In this manner, WorkTools feels that the threat of being ripped off is reduced. It’s easier for a company to agree to a reasonable licensing agreement than to fight an expensive court battle. In general, WorkTools frowns upon putting an idea on the auction block and offering it to the highest bidder.

INVENTORS SHOULD BE EXTREMELY CAREFUL ABOUT PUBLIC DISCLOSURE. Public disclosure of an idea can reduce or eliminate "proprietary rights" and some or all options for patent protection, especially outside of the United States. Definitions of what constitutes public disclosure are not absolute. INVENTORS ARE THEREFORE ADVISED TO CONSULT WITH A PROFESSIONAL ADVISOR BEFORE MAKING ANY DISCLOSURE. Books such as Patent It Yourself (highly recommended) and other publications available at the Invention City Bookstore may be helpful.

The issues of disclosure do not fade once a patent has been issued and a product is on the market. If a product is successful it is virtually certain that copies, knockoffs, will appear. Some knockoffs will be in direct violation of patents issued or pending. Others will be more or less legal -- even though they may have been inspired by the original, patented, product. WorkTools has addressed the issue of direct patent violations by trying to persuade a violating company to change its design so that it is not in violation. This has been successful with some companies when it has been accompanied by an opinion on what, exactly, WorkTools considers its patents to cover -- THIS TYPE OF DISCLOSURE IS NOT RECOMMENDED UNLESS INFORMED COUNSEL HAS BEEN SOUGHT - SPECIFIC LEGAL RIGHTS MAY BE LOST BY TAKING SUCH ACTION. The value of persuasion is that an expensive court battle and confusion in the marketplace may be avoided. Disclosure of a company’s own opinions on what a patent covers may be a necessary ingredient for persuasion to work.

It is hoped that none of this will dissuade an inventor from moving forward. While the risks are real, so are the rewards. The world market is huge. Even if an inventor does not have the only design for a product, he or she can have a good one and make plenty of money with it.

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Mike Marks is President of InventionCity.com and has been active in the field of product development since 1987. In conjunction with WorkTools, Inc. he has brought numerous products to market directly and through licensing agreements with others. WorkTools, Inc. also produces prototypes for their inventor clients and brings some of those inventions to market.

Inventors seeking help may also submit their ideas to Invention City for possible financing, licensing and other forms of development assistance. Invention City features an on-line product evaluation form that helps an inventor evaluate a product's potential for success. To go there, visit http://www.InventionCity.com and click on "Market Research." To submit your consumer product to Invention City, go to their site and click on "How to Submit an Invention."

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Article # 3: "Two Things You Should Know when Conducting Your Market Research," by Paul Niemann of MarketLaunchers.com

Whenever I receive calls from someone who says he has a great new product and wants to know what to do next, I always ask him who else (besides him) thinks it’s a great idea. Most of them say that everybody they’ve shown it to says so.

There are two things should be mentioned here. First, if you show your idea to friends and/or relatives, they might be inclined to tell you what you want to hear, rather than giving you their accurate opinion. The reason for this is that they either don’t want to rain on your parade or they don’t want to be the bearer of bad news. One way to get more of an accurate feedback is to ask them, after they’ve given you their response, if they would now like to invest $5,000 of their own money into your project. After they reply, you can tell them that you’re not really looking for investors but just wanted to find out if they really thought it was a great idea.

The second thing worth mentioning is the difference between the type of responses you get when you personally show your product (or a prototype of the product) versus having your product in its finished form at a retail store. At retail, you won’t be there to personally explain and/or demonstrate your product to potential customers, unlike when you showed it to people as part of your research to determine if your product has potential in the marketplace.

This is where the importance of good packaging comes into play, but that’s a topic for another issue.

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Click here to read the June 2001 issue.