Save Time and Money By Learning From Thomas Edison’s Mistake!
Thomas Edison is considered to be one of the greatest inventors of all time. He obtained over 1,000 U.S. Patents. However, he made a crucial mistake early in his career that nearly cost him everything!
In 1868, Edison was just starting his career. He and his family were nearly broke. Thomas got a job at the Western Union Company. In his spare time, he invented and patented an electronic voting recorder that could quickly count the votes of a legislature.
However, when he tried to sell his idea to the Massachusetts legislature, they were not interested. The legislators told him that they didn’t want to have their votes counted quickly because they wanted more time to change the minds of their fellow legislators. Thomas was stuck with a great invention that no one wanted to buy.
But Thomas learned from his mistake.
Thomas’s next great invention was for an improved stock ticker. These were devices that could read telegraph messages regarding stock prices and print them out as paper statements. Thomas had figured out a way to synchronize several stock ticker translations so that the potential customer could simultaneously receive multiple streams of stock information.
Instead of rushing off to patent the idea, Thomas approached his potential customers and asked them if they would be interested in buying such a device. They were very interested. Thomas was paid $40,000 by the Gold and Stock Telegraph Company for the rights to his invention. This was so much money back then that Thomas was able to quit his job and become a professional inventor.
After his initial commercial failure, Thomas always considered whether there was a market for his inventions before he spent the time and money to obtain a patent.
As a patent attorney, I have always been fascinated by this story ever since I saw it on the History Channel. I have met so many people who earnestly believe that having a great invention and getting a patent will somehow make them money.
The good news is that patents can be an amazing investment because they provide the owner with exclusive rights to practice an invention for a limited time. There are patents that are valued at millions and even billions of dollars per year.
However, as Thomas found out the hard way, patents do not necessarily make you money. A patent is an investment in your innovation, much like purchasing land or stock in a company. Would you invest in real estate without having any idea of how you were going to make money from the land?
You do not want to be one of these inventors who says, “okay, I filed a patent application, now what?”
This is the first post in what will be a “How To Make Money With A Patent” series. I will be writing this series to help entrepreneurs, founders of start-ups, and general counsel of small businesses figure out if they should get a patent. In other words, I am going to assume that you do not work for a large company or technology transfer office at a research university. Those institutions have in-house patent attorneys who provide this analysis, but they may still find this post interesting for educating inventors. This discussion will provide some simplistic analysis, and will be based heavily on my own experience.
Over 97% Of Patents Are Worthless
I will start this series by discussion my impression as a patent attorney on why most patents are worthless, and then discuss how to think about patents as an investment.
The posts in my guide will address the following:
- The Biggest Problem In Patent Law
- Reasons Why Most Patents Are Worthless
- Prospecting For Patent Gold
- Making Money By Practicing Your Invention
- Making Money By Licensing Your Invention
- Making Money By Increasing Investor Confidence
- The Conclusion: Look Before You Leap
Why Should You Care?
At this point, you may be thinking something like, “Wait a minute! Why should I read a total of eight posts to figure out how to make money with a patent? I have seen other webpages with this sort of information in a single list of bullet points!”
The typical cost for drafting a patent application is over $8,000. The typical cost of filing and obtaining a U.S. patent is $20,000 to $30,000. If I were going to invest that much money in having a service provider obtain a patent for me, I would invest the time to read a few posts and figure out how you are going to make money with your patent. I suggest that you do the same.
The next post in my “How To Make Money With A Patent: My Guide For Determining If You Should Patent Your Idea” series will cover “The Biggest Problem In Patent Law.” Click here for the next post.