First, by selling it outright for a cash consideration.
Second, by selling state, county or shop rights for the use of your invention.
Third, by placing it with an already established concern on a royalty basis.
Fourth, by the organization of a company or partnership for its production and marketing.
Taking up each one of the methods in order, the following explanations will possibly be of interest:
It has often been said that an inventor rarely underestimates the value of his patent. Associating with and meeting large numbers of inventors from time to time has convinced the writer that no one individual can give a reliable estimate of the value of anyone's invention. If an inventor desires to sell his invention outright, he should take into consideration, in fixing the price, just how much he spent on the development of the idea; how much money he actually spent in procuring the patent, building the models, and getting the invention into marketable shape. He should add a certain modest percentage for good will, and if he desires to sell outright, base his figures on some such estimates. For instance, a small, simple patent could be estimated as being worth, say $2500 cash, as follows:
| Twenty weeks of time spent in developing the idea, $25 per week | $ | 500 00 |
| Procurement of patent | 75 00 | |
| Building of models | 150 00 | |
| Expert advice and counsel | 25 00 | |
| Manufactured samples, dies, tools, etc. | 250 00 | |
| Good will, or present value of the patent per se | 1,500 00 | |
| Fair selling price for patent in which the time, labor, expenditures, etc., were approximately in accordance with the figures listed above, would be | $ | 2,500 00 |
The man that buys the patent will be entitled to a great deal more profit than the inventor who conceived it, and by the time he has it on the market and has the sale established, he will be entitled to everything he earns. Of course, there are exceptions to every rule, but the writer is not speaking of exceptions now.
Another very profitable way to dispose of a patent is the selling of state, county and shop rights. This has brought many inventors very large returns, although it involves a good deal of selling expense, and salesmanship of the highest order.
The placing of a patent on a royalty basis, and the payment of a nominal cash "quid pro quo" we consider the best method of disposing of an invention, and the one most likely to prove profitable, provided, of course, that the firm with which the patent is placed is thoroughly reliable, and can energetically push its sale. Elsewhere in this volume you have read of the enormous sums in royalties that have been received on various successful inventions. One particular illustration at this time may not be in-apropos.