Licensing Inventions from Independent Inventors

Understanding motivations is key.

I was an engineer for 13 years before switching to patent law, which was over 20 years ago.  My engineering career was mostly in the manufacturing side, designing fixturing and tooling for production lines.  However, I had a product idea that I wanted to invent and license products to companies.

I did not have any experience in the consumer products industry, and I stumbled into an opportunity to work at WaterPik. 

Taking a job specifically to learn licensing.

My goal at WaterPik was to learn everything I could about how they did in-bound licensing, as well as get some practical experience designing consumer products.  WaterPik makes oral care products (toothbrushes and the WaterPik cleaning system) as well as showerheads (the “Shower Massage” by WaterPik).  At the time, WaterPik also had a professional oral care product line for dentists.

I had no idea I would learn so much so quickly.  Or how long it would take to learn some of those lessons.

I had this naïve notion that companies like WaterPik would love to license my inventions.  I hear this from countless inventors.

Essentially, the inventor wants to dream up something, take no risk, and get paid.  They want someone else to invest all the money and expertise, then pick up a check every week in their mailbox.

WaterPik had, indeed, licensed inventions from several different inventors.  I also heard several stories about how the company used patents in negotiating with competitors, how they did inbound and outbound licensing, and many other tidbits that helped me understand how they used intellectual property.  This was exactly why I wanted this job.

I did not realize it at the time, but it was a very special time in the company’s history, and probably the only time that in-bound licensing of ideas was possible.

Why Waterpik licensed some inventions – from an insider’s perspective.

Many of the engineering staff at WaterPik were very long-term employees.  Some had been there 10-15 years when I was there, and many of them are still there, even 20 years later.

The engineering manager was a relatively long-term employee, who knew the products inside and out, and there were other senior engineers who had been working on new products for years.

The engineering team took great pride in their continual improvements of the products over the years.  They had a few patents for their innovations, and they considered themselves to be very creative.

At the time I was hired, WaterPik was taken over by a private equity firm that was pumping money into the company.  They brought in a new vice president of engineering from outside the company, and his job was to create new product lines to dramatically grow revenue.  At the same time, all the US-based manufacturing was moved to China to “reduce costs.”

In hindsight, there were two distinct sets of motivations operating.

Management had two completely different motivations.

The new management team, including the new vice president of engineering, were eager to try as many new ideas as possible.  They had marching orders to grow the company.

The long-term engineering manager had a completely different viewpoint, although they also had the same mandate to create new products and grow revenue.

For decades, the engineering team were supposed to be coming up with new products.  They were very proud of the products they developed and introduced to the market, and it was very palatable as I was coming onboard and learning the history of the company.

The new management regime hired a product designer.  They built a special “product design studio” with special lighting, cool looking office chairs, funky furniture, lava lamps, bean bag chairs, piles of toys and Legos, and big whiteboards filled with sticky notes from brainstorming sessions.

Engineers, like me, were not allowed to go in there, even though it was on the other side of the wall from the engineering cubicles.  I was only allowed to go inside the “studio” once in two years.  They did not want the unwashed masses in their carefully designed “studio.”

The engineering manager vs the new vice president of engineering.

Think about the motivations of the people in these roles.

The engineering manager was motivated to show that he and his team could come up with better ideas than the product designer in the “product design studio.”

He was hurt by the notion that outside ideas would be better than his ideas.

On the other side, the new vice president of engineering needed to show that he was producing.  He needed ideas at any cost.

The engineering manager had a historical legacy of product ideas that had been tried.  Some had worked well, and some were disasters.  But he had put his heart and soul into these ideas and felt a huge sense of pride for the ones that did well, as he should.

The vice president had no preconceived notions.  He had no history with the company, and he had no hesitation to try a new product, which the new management was demanding.

There were two competing motivations.

The vice president had no resistance to bringing in outside ideas.  In fact, his job was to pump life into the tired product line.  (To give you an idea about the tiredness of the product line, the Shower Massage was invented nearly 40 years ago – and is still being sold today as the exact same product.  You can see the showerhead in every Hampton Inn hotel room.)

The engineering manager did step up to the task of implementing these new ideas, but any ideas from the engineering group were tarred with the brush of “old ideas.”  The engineering team had a huge fire under them to develop something that would better than the product designer in the “studio.”  I felt the tension, but I did not recognize at the time that there were diametrically opposed interests of the different players.

If I were on the outside looking in, I would never have seen these internal conflicts.  In fact, the internal conflicts did not dawn on me until years later.

Corporations are not monolithic.

When we look at a corporation, it appears to be a monolithic organization that has one goal: produce their product and serve their customers. 

Internally, however, there may be people, groups, or whole departments or divisions that do not want outside ideas.  There may be people who look bad if you suggest an innovation.  These people may have a motivation to actively fight any innovation.

This also taught me another lesson: there may be points in someone’s career when “not invented here” is a good thing, not a bad thing.

At WaterPik, the VP of engineering was hired to bring in new ideas.  At the early stage of his WaterPik tenure, he wanted outside ideas and was happy to license them from inventors.

On the other hand, the long-term engineering manager would look bad if he licensed an idea from outside.  After all, it was his job to create new products and getting an idea from outside made it look like he was incompetent.

A practice tip: look at a person’s tenure at a company to guess what their motivations might be.

Anyone who is new to the company might be willing to entertain new ideas or new products.  Someone brought in from outside the company has no history about ideas that have been tried and failed. This person may also want to shake things up and make their name by trying something new.

This principle may apply to people who were promoted from within.  In some cases, people promoted from within may have a completely opposite mindset: they might be terrified of making a mess by changing things up.

People who have been at a company for a long time have institutional knowledge.  The institutional knowledge certainly contains stories of projects that failed miserably.  In most cases, the stories of epic failures are retold over lunch far more than stories of the successes.

Practice tip: If you are trying to sell something into a corporation, try looking for people who are new to the job, especially who came from another company.  These people might be more receptive than long-term employees.