Get your idea or invention to market

By Nicole d'Entremont

You have a great idea or invention. You’re convinced there’s a demand for it—or that it might even become a big seller. Problem is, like many entrepreneurs and inventors, you lack the experience or the means to get your product to market.

You’re not alone. Countless great business ideas or inventions never take flight simply because the persons behind them don’t have the financial, operational or human resources to turn their idea into a marketable reality. If you’re short on cash, experience or resources, consider product licensing. Instead of manufacturing and marketing your product yourself, you can license it to a company in Canada or internationally.

Licensing is a good way to minimize costs while maximizing market potential. The following five steps will guide you through the process:

1. Protect your intellectual property – Before licensing your product, you must protect your intellectual property rights with a patent (or patent-pending). A patent gives you the right to exclude others from making, using or selling your invention in Canada. For more information, visit the Canadian Intellectual Property Office at

2. Prepare a product portfolio – The product portfolio is your opportunity to showcase your product to potential licensees. It should clearly detail your idea or invention, how it works and why its market potential is so strong. The package should contain a letter of introduction, along with the following: product pictures or drawings, detailed description, product variations, benefits, manufacturing information, market research findings, and pricing.

3. Get the word out about your product – Let others know you have a product to license. Cast your net as widely as possible by tapping into your professional networks and the following resources: licensing consultants, publications, websites and events; Canadian Trade Commissioners in Canada and abroad (see; provincial trade offices and agencies; trade directories of domestic and global manufacturers; universities with research facilities; Chambers of Commerce in Canada and internationally; banks with international operations; and trade associations and publications.

4. Seek legal advice and support – As the licensor, you are expected to provide a legal agreement that sets out the conditions, rights and responsibilities for both parties.  A lawyer will work with you to draw up the agreement and negotiate a range of issues, including: what is being licensed, exclusive rights, territories covered, payment for patents, liability and provisions for termination of the agreement.

5. Determine a royalty rate for your product – There is no standard approach for determining your royalty rate. In fact, the rate you manage to negotiate will depend on a number of factors, such as whether the product is already patented, its level of market-readiness, and your own track record with producing successful products. Typically, royalty rates range from 3% to 8% of net sales. Each licensing agreement is unique and what you get is entirely dependent on your ability to negotiate a deal that benefits both you and the licensee.

Article by Nicole d'Entremont, small business owner. More information is available at or by calling 1-888-576-4444 (TTY 1-800-457-8466).

By Adam

January 04, 2012