10 Steps to Making Money from Smart Ideas

Step One

Treat intellectual property as a business asset by putting a dollar value on it and looking to protect it in the same way as you do with your tangible assets. This is important for your balance sheet if you want to attract investment to grow your business, or to find out what your business and your IP is worth if you want to sell it.

Step Two

Understand the different types of IP and the advantages of each one. Patents protect inventions; design registration protects its look. A registered trade mark protects brand names, logos, original sounds and scents and even aspects of packaging. Or you may want to rely on rights such as copyright or trade secrets, which do not need to be registered, to protect your IP. IP Australia’s website gives you more details about your IP options at www.ipaustralia.gov.au

Step Three

Keep your smart idea confidential - until it’s protected. If talking to others about your idea, use a confidentiality agreement, otherwise you could risk your right to legal protection and competitive advantage. Once signed by the party, a confidentiality agreement gives you a right to prevent them from disclosing your ideas to others without your permission. A lawyer can prepare this for you.

Step Four

Protect your idea using the IP system. Wise innovators seek advice from an IP professional sooner rather than later.

Step Five

Build a model of your invention, where practical, to help prospective financial backers visualise your smart idea and its market potential. However, don’t let anyone see it without having a confidentiality agreement in place first. Also, if you have an invention, be cautious not to chase money in relation to that invention before lodging an application for patent protection. A “commercial use” of the invention prior to filing your patent application may destroy your chance of receiving a patent.

Step Six

Keep track of all your development and protection costs to help you put a value on your IP and give you an idea of how profitable your venture should be to recover your costs.

Step Seven

Every business needs to research its potential market and understand its likely consumers, buyers, licensees, investors, manufacturers and distributors. Doing this will help you work out your per unit cost and should give you a basis to see if your product or service is competitive. It will also assist you to avoid infringing the IP rights of others.

Step Eight

Many inventors are great at inventing but to commercialise your idea you need a variety of business skills. Taking a course in business management or at least educating yourself via books or accessing information on the web is fundamental. Use support groups such as inventor’s associations, your local business enterprise centre and government agencies. However, before taking major steps, invest in quality professional advice.

Step Nine

There are different ways to make money from IP. You can sell it, license it or make products yourself. It might be more profitable in some cases not to manufacture it yourself. If you do this, get legal advice on any contracts you intend entering into with other parties.

Step Ten

Keep an eye out for infringers. Not only do these copycats erode your hard-won market share, poor quality imitations can quickly ruin your brand reputation. Seek the advice of a lawyer or patent/trade mark attorney to help you to decide on the best course of action against infringers. You may need to take legal action, but infringers can often be stopped without having to resort to legal proceedings.