government question

[shruggedatlas]

I am curious
we have a business model in place, but how would you justify the upfront cost to different companys and a royalty amounts for such a product?? 

That is going to be tricky, and it's hard to say how it will shake out.  It depends on your invention and how well your patents are crafted to cover the various variations of it.

If you suspect the patent may be possible to get around or you just simply do not have the funds to litigate infringement, you may want to just strike a deal with a single manufacturer for exclusive license rights for X number of years for a high royalty fee.  You can even demand an up front fee as well.  This way, you can keep the invention still sort of secret for a while.  Only you and your partner/licensee will know the unpublished (in the patent) details about it until it is ready for sale.  Then, that company will have a commanding market share for a good while, and both of you will make money.

If you think your patents will really hold up and you have the funds to litigate potential infringement (now is where the $5 to $10 million figure is appropriate), you may want to shop your idea around more freely with the goal of signing up as many licensees as possible.

Also, I do not understand why you are trying to valuate the worth of potential licensees.  You are not buying these companies, you are going to be signing deals with them, deals that will affect what they can produce in the future, so current accurate valuations are not at all important.  I admit, you do not want to do a deal with a company in bankruptcy, but that does not require thousands of manhours to determine.

[cameron sydenham]

you are right on both accounts.
assume we have "the answer"
we would not want to do business and sell the license rights to a company in dire trouble.
but about the other way to value the company, of course the previous year will not be an accurate account of what they will be worth with this knowledge, but that past success can be used to get to a guage as to a "fee" for what the patents would be worth to their future value. cash and stock in the company may be the best bet here.
example, toyota is worth between 250 and 300 billion based on some very basic google resarch. what would be the up front fee and more importantly, the residual royalty???
gets tricky because our intetions are to try to make the rights to use the ideas as fair to all companys who could and would benefit from it, but keep in mind, the inventor and investors do want to "sell" the rights, not give them away.

[shruggedatlas]

you are right on both accounts.
assume we have "the answer"
we would not want to do business and sell the license rights to a company in dire trouble.
but about the other way to value the company, of course the previous year will not be an accurate account of what they will be worth with this knowledge, but that past success can be used to get to a guage as to a "fee" for what the patents would be worth to their future value. cash and stock in the company may be the best bet here.
example, toyota is worth between 250 and 300 billion based on some very basic google resarch. what would be the up front fee and more importantly, the residual royalty???
gets tricky because our intetions are to try to make the rights to use the ideas as fair to all companys who could and would benefit from it, but keep in mind, the inventor and investors do want to "sell" the rights, not give them away.

That's sort of like someone selling a product, and the customer asking, "How much does it cost?"  The answer: "How how much have you got?"

Assuming your potential customer is a viable and healthy business, which, say, Toyota is, it really does not matter how much they are worth.  This does not affect the royalty rate or your fee.  What affects that is how much is the invention worth.  How much is it worth?  Incorporated into something like a car, that's complicated.

One factor is the cost of production.  Let's say Toyota can save $500 on the cost of every car by using your invention.  That's something, sure, and there is more.  If your invention results in a fuel savings, that makes the car more attractive to a consumer, so Toyota will be able to sell more cars and probably raise the price to boot.  That makes the invention worth much more.

You see, none of this has to do with what Toyota is worth.  If you want your accountants doing something useful, have them figure our the worth of the invention.

All that said, you should get a patent first, before you spend a penny on the other stuff.  Once you get a patent, you can get venture capital to help out with the rest.

[Cap-Z-ro]

For your own protection, you may wish to do as I did...In doing up the specs of my patent app, I inserted a descriptive meant to mislead any potential 'knock off artists'.

If your invention is unique, and in a specialized field, its a good chance the specs will be accepted as described...thereby presenting a challenge and an obstacle to patent infringers.

My personal advice...for your own safety, and because humanity needs it sooner rather than later, I would open source it...your fame will have you staying at the finest hotels on the lecture circuit.

Regards...