Robert Z. Cashman | Phone: 713-364-3476 | E-mail: rzcashman@patentprophet.com

WHEN YOU TRY TO MANUFACTURE IN THE U.S. OR ABROAD

In Manufactured Goods, Patent Licensing on November 16, 2012 at 5:03 pm

4) You might try to manufacture your product and find the costs to be prohibitive.

Manufacturing is always a factor of “if you make more, it will be cheaper.” For those who honorably believe in their product being “Made in the U.S.A.,” they may also find costs to sometimes be prohibitive. Going offshore to countries such as China can also be equally cumbersome since a manufacturer needs to deal with people copying their product and competing with the patent owners for their own business. As a result, patent owners often need to police their products, deal with customs to stop infringing products at the border, and deal with piracy of their product offshore.

If a patent holder wants to manufacture their product at a lower cost, then dealing with production companies such as those in China is necessary. However, there are steps that need to be taken to prevent the offshore manufacturer from stealing your product. Consultants in this area can be very helpful in properly protecting your interests while you negotiate, manufacture, and ship your product to the market. Making mistakes here can be fatal to your business.

For those interested in keeping their product “Made in the U.S.A.,” it is often a good idea to partner with other companies who already have manufacturing capabilities here in the US. The most efficient way to achieve this goal and to see your product on the shelves is to license your product to companies who are already making similar products.

Very often the royalty an inventor receives will make the inventor large sums of money for little effort. It must also be said that if that same inventor tried to manufacture the product themselves, they may have 1) never gotten off the ground due to staggering costs, they may have 2) never seen their products hit the shelves (an established company could easily add a new product to their line of products in stores while a new company often has a difficult time breaking into stores), and 3) even if they are successful in manufacturing their product, it might be SIGNIFICANTLY CHEAPER for the patent holder to have another company produce the product, and it might be SIGNIFICANTLY MORE PROFITABLE for the patent owner to let the other company license the patented idea for use in their product under the company’s brand name.

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