Forums: Discussions for entrepreneurs and small business.

I have been working on an aftermarket product for the sailing marine industry - it’s close to being ready for production, been working for some time with suppliers.

I have received a patent on this idea. There is a related patent which was disclosed in my patent.  I believe there is enough chance of infringement that I need to license this other patent.

The quantities of this product are fairly low - I’ll be pretty excited about 500 per month. It is also the type of deal where whomever sells the product will want a 100% markup (i.e., they sell it for twice what they bought from me).  The product will sell for about $250 USD.

I have started talking to the owner of the other patent and also tried to find info on the internet about licensing fees. The internet gave some % numbers.. but didn’t tell % of what - i.e., % of wholesale, % or retail?

I started off by offering a licensing fee of 5% of wholesale price - i.e., if the product sold retail for $200, this guy would get 5% of 100 (i.e., $5).

He came back with counter offer of 10% of retail - i.e., he would get $20.

I’m under the impression that he is way out of whack and would be the only one to make money on the business - which will eventually kill the whole thing.

So what is reasonable? Or?? 

 

You might want to explore information at www.inventright.com.  Stephen Key specializes in licensing ideas.  He should be able to help you.

Try this link: http://www.inventRight.com/411

I think this link offers a free 15min consulting call.

Good luck with your idea.   Tom S.

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