I Know It’s Worth A Million!

I Know It’s Worth A Million!

Occasionally, a first-time inventor sits down with Business Patent Law, PLLC (BPL) to discuss a new mechanical or electromechanical invention. Before the hour ends, the excitement usually peaks: “Let me tell you, it’s worth a million!”

It’s an inspiring sentiment, but as a firm that has spent decades in the trenches of intellectual property, a million-dollar idea is only the first brick. To turn that “worth” into “wealth,” you need a foundation that can hold the weight of a business.

The Legal Foundation: The Patent

Before any money is made from your invention, there must be a patent.

• The Industry Standard: The USPTO’s current allowance rate for mechanical-type applications is approximately 65-70%.
• The BPL Advantage: Fortunately, BPL’s clients consistently maintain a higher allowance rate than the national average.

However, a granted patent is not a check; it is a legal monopoly right – it means you hold the exclusive rights to make, use or sell. To be “in the money,” the patent must be used in a manner that creates value that can be reduced to cash.

The Million?: Sales vs. Licensing

Once you have the patent, you have two primary paths to your “million”:

1. Licensing or Selling: This is the path where you rent or sell your rights to a third party. In my 38 years as a patent attorney, only three times, have I seen a third party offer to buy a mechanical invention based solely on the patent only. And, to my knowledge, none of those resulted in a viable commercial deal.
2. Building the Business: The clients who created truly valuable patents were generally persistent ones. They didn’t wait for a buyer; they started an LLC and began selling the device themselves.

The most successful inventors didn’t just invent a product; they built a customer base. When an LLC reaches a “magic number” in annual sales—proving the market exists—that is when an acquiring company steps in to pay an impressive Return on Investment (ROI).

“Born to Invent”: The 1.5%

Why is the invention path so difficult? Because the innovation “gene” is a rare human trait. Statistics suggest that roughly 1.5% of the population creates the vast majority of inventions. These individuals are a necessary cylinder of our economic engine, but they often face lopsided odds.

While some look to Venture Capitalists (VCs) to bridge the gap, the numbers are sobering. Only about 5-10% of VC deals generate a worthwhile ROI for both the founder and the VC, especially in the high-cost manufacturing world of tangible consumer devices.

The One In A Million Longshot

For a first-time inventor, the “million-dollar” dream is, statistically, a longshot. But world-changing technologies generally start that way. In its earliest days, few people were interested in cell phones—they were bulky, expensive, and lacked the clarity of a landline.

Success requires more than a better idea; it requires serendipity and a legal team you are comfortable with. BPL can write the patent application, suggest architecture for your business, and answer your questions when they arise.

Ask Us Anything… about Intellectual Property!

Business Patent Law, PLLC is headquartered in Nicholasville, Kentucky, serving a diverse range of clients from innovative startups in Lexington and established industry leaders in Louisville, to businesses across the United States and the world.

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Business Patent Law, PLLC provides intellectual property and business counsel. If you need assistance, please contact us today.

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Prepared by the Business Patent Law, PLLC, editorial staff.