• Home
  • About
    • Client Reviews
    • Patent Samples
    • Accolades
    • About Firm
    • Technologies
    • FAQs
  • Services
    • Patent
      • Utility Patents
      • Design Patents
      • Patent Application
      • Patent Defense
      • Patent Enforcement
      • Working with In-House Attorneys
    • Trademark
      • Trademark Search
      • Trademark Application
      • Trademark Enforcement
      • Trademark Defense
    • Licensing
    • Worldwide IP
    • Risk Management
    • Due Diligence
  • Industries
    • Browse Patent Samples
    • Automotive Patents
    • Construction Patents
    • Consumer Products Patents
    • Electronics Patents
    • Food, Beverage, & Other Culinary Patents
    • Manufacturing Patents
    • Medical Products & Devices Patents
    • Optics Patents
    • Software & App Patents
    • Tools & Equipment Patents
  • Learning Resources
    • First-Time Inventor?
    • Why Patent Your Invention in a Bad Economy?
    • Videos on Patents
    • Search 180+ Articles
      • Patent process
        • Overview of Patent Process
          • Patent process timeline and major milestones
          • Patent Process: Invention to Patent Granted (Simplified)
          • Patent process, overall steps and procedures
        • Overview of the examination process within the USPTO
          • Highs and lows of securing patent protection for your invention
          • What is the Patent Office procedure after filing a patent application?
        • Benefits of a Patent Search
          • What is a patent search and How to do it?
        • Patent attorneys, agents and the USPTO can help with the patent process
        • USPTO Website
      • Invention Agreements
        • What is an NDA and when to use them?
        • How to use a contract to protect your invention?
        • Working with others without losing your IP rights
        • Patent Assignments for Independent Contractors
        • Losing Invention Rights When Hiring or Collaborating with Others
        • Avoid Problems: Get an Invention Assignment Agreement
      • Protect Inventions
        • Misconceptions of Provisional Patent Applications
        • Do you need to get your patent attorney to sign an NDA?
        • Can a confidentiality agreement protect me like a patent application?
        • Four types of intellectual property to protect your idea and how to use them
          • Overview of Patents and Intellectual Property
          • Patent protection benefits and why every inventor should consider getting one
          • 8 tips to successfully protect your idea
          • Benefits of Patent Protection
          • Best uses for design patents
        • Reasons to only market your invention after securing patent pendency
          • Dangers of 1 yr grace period under first-inventor-to-file system
          • File a patent application before telling others about the invention
        • Risks and benefits of securing software patent protection
          • Strategy to overcome patentable subject matter rejection
        • Pros and cons of filing a continuation-in-part application
          • What is a continuation patent application?
      • How Patent Applications Work: the Basics
        • How to respond to an office action?
        • Request for non-publication of a patent application
        • Anatomy of a Patent Document
        • How to write a broad patent application?
        • Design patents: pros and cons
      • Patent costs
        • How much does it cost to get a utility patent?
        • Provisional Patent Application: Cheap Alternative?
        • Patent Cost Framework and cash flow
        • Provisional patent application: a cheap option?
        • Cheap provisional patent applications
      • Patent infringement
        • Basics of writing a patent claim for a patent application
        • Patent Marking: Everything you wanted to know
        • Avoiding Patent Infringement
        • Can I Copy My Competitor’s Product?
        • Can I Copy My Competitor’s Product? (Design Patent)
      • Worldwide patents
        • Pros and cons of securing worldwide patent protection and their steps
        • Foreign patent filing to secure protection in other countries
      • Responding to Office Actions
        • Overview of Office Actions
      • Trademarks
        • Trademark Registration: common law, state and federal
        • How to obtain a federal trademark registration?
        • How to select a trademark?
          • Protect your idea when pitching to an investor, potential licensee, or buyer
  • Schedule Consultation
  • Contact

Top-Rated Orange County Patent Lawyer | Helping Inventors in Orange County, Los Angeles County & Beyond | OC Patent Lawyer, Irvine CA

Orange County Patent Attorney

(949) 433-0900
You are here: Home / Patent application process / Before filing a patent application / Marketing Your Invention / Can you sell an idea without a patent?

Can you sell an idea without a patent?

August 13, 2019 by James Yang

Can you sell an idea to a company without a patent? Yes, you can sell an idea to a company without a patent. However, the company needs to enter into a contract such as a nondisclosure agreement (NDA).  Otherwise, they can steal your idea.  Unfortunately, many companies will not enter into an NDA.  As such, you may need to get at least a patent application on file to pitch your idea. 

Let’s discuss the specifics.

How to sell or license your idea without a patent?

You can sell an idea to a company without a patent.  You need a way to stop them from stealing the idea from you.  One way to do that without a patent is with a nondisclosure agreement, aka NDA.  The NDA would limit the company’s ability to use your idea without paying you for it.

Here is a simplified version of how that would work.

You approach the company and ask them to enter into a nondisclosure agreement with you.  If they sign the NDA, they cannot tell others about the idea.  Otherwise, they will breach the contract.  If they do tell others without your consent, you can sue them for breach of contract.  The NDA stops the company from using your idea without paying you for it.

Unfortunately, most sophisticated companies won’t enter into an NDA with you. For example, New Balance and Coca-Cola all take idea submissions from people like you.  However, they will not enter into an NDA with you.

Why would they?

An NDA is an invitation to a lawsuit.  Nondisclosure agreements require them to keep things secret.  If it even looks like they stole your idea or invention, then they might have a lawsuit on their hands.  Because most ideas are not worthwhile, you are required to make your disclosure on a non-confidential basis.  You have to protect it with a patent or trademark.

Companies have a policy of non-confidentiality

Here are the idea submission policies of two companies.

New Balance Idea Submission Policy

Here is New Balance’s idea submission policy. They are very blunt about it.  “Your ideas are … submitted on a non-confidential basis.”  They tell you to get a patent first.

Coca-Cola Idea Submission Policy

Here is Coca-Cola’s idea submission policy. You have to make your submission without confidentiality.

You get the point. Sophisticated companies won’t sign a nondisclosure agreement.

A few companies will sign an NDA

Fortunately, some companies will sign nondisclosure agreements to hear you out. You can find out by searching for any webpage on their website that describes the idea submission policy like Under Armor.  If you can’t find the webpage, don’t give up.  Lookup people on LinkedIn, etc. who work for the company.  Ask them if they can sign a nondisclosure agreement to hear out your idea.

The bottom line is that some companies will sign a nondisclosure agreement, but many won’t.  So you are limiting the number of potential buyers of your idea if you don’t get a patent or patent-pending status.  However, it is possible.  If you don’t have money for a patent, then your options are limited.  You may have to pitch your ideas only to potential buyers that will sign the nondisclosure agreement.

Increase the number of prospective buyers with patent pendency

If you want to increase the number of potential buyers of the idea, then you could submit a patent application on the idea. Now, let’s be clear. You should submit a patent application only if the idea is an invention.  By submitting a patent application, you establish a priority date.

For example, let’s say you submit your patent application on January 1 and tell others after your invention after that date. Anyone that hears your idea would have heard about it after January 1. If they file a patent application after January 1 on the same invention, then they will not get a patent.

Why?

You won the race to the patent office. You are first in line for the patent, aka priority.

In this regard, you don’t need a nondisclosure agreement in place before pitching an idea when you have patent-pending.  You have more freedom to pitch your invention to companies without the need for an NDA.

Get extra protection: Do both (NDA and Patent Pendency)

Even if you have a patent-pending status, you can always ask the potential buyer to sign a nondisclosure agreement before you share your idea with them. By doing so, you can have both 1) contractual rights via the nondisclosure agreement and 2) a priority date with the patent application.

Related questions:

Are companies likely to buy just ideas?

In my experience, companies are not likely to buy just an idea.

Why?

They don’t know if they can get a patent on the idea if they spend the money to get a patent.  They wouldn’t know the scope of patent protection even if they were to get a patent.  Most buyers would prefer to see a patent so that they can evaluate the scope of protection.

Do you need a prototype to sell your idea?

No, you don’t need a prototype to sell your idea.  However, that would be a good idea to show that the idea works, aka proof of concept. The prototype is a part of your pitch to sell your idea.  Otherwise, the buyer has to build the prototype and prove that your idea works. If it doesn’t work then they wasted their time and money. You don’t need a fully functional prototype to show proof of concept.  However, that would be a good idea.  Once again, a fully functional prototype would be a part of your pitch to sell your idea.

I think that you get the point.  Although a perfect prototype is not necessary, it is helpful in making your pitch to others.

Do you need a prototype to patent your idea?

No, you don’t need a prototype to patent your idea.  However, it is beneficial.  It helps you and your patent attorney get a better feel for the invention.

Moreover, if your invention sounds like the perpetual motion machine, then people (USPTO, patent attorney, investors) will ask you to build and show proof of concept.  Otherwise, the examiner will reject your patent application.  Reputable patent attorneys will turn the work down.

How do you patent an idea then make money with it?

You have two options for making money with patents.  If you want to learn how to get a patent, read my article: How to patent an idea?

Option 1: Sell patent rights

You can outright sell the patent itself.  The benefit of selling the patent is that you have quick cash and you don’t have any responsibility later on if and when litigation occurs.  The downside is that the sales price is all that you will make on the deal.

Option 2: License patent rights

You can license your patent to others.  The benefit is that you can potentially make more money by going through this route.  You can collect royalties for 20 years.  The downside is that it is costly to negotiate the license, and the prospective licensee might back out of the deal at the end, leaving you to pay for your attorney fees.

Do you need a patent to license your idea?

No, you don’t need a patent to license your idea.  You can license the idea without the patent.  However, you need something that prevents them from stealing your idea.  For example, you need patent-pending status, some intellectual property right, or contractual right (e.g., nondisclosure agreement) to license your idea.

  • Facebook
  • Twitter
  • LinkedIn

Author

James Yang is a patent attorney. For more than 16 years, James Yang has been representing clients to secure patent protection for their inventions and register trademarks to protect their brands. If you need help, call him at (949) 433-0900. Read More…

Popular Posts

  • Patent process overview
  • Patent process explained
  • How much does a patent cost?
  • Why patent your invention in a bad economy?

Patent Book

Navigating the Patent System - new book by Orange County patent attorney, James Yang

Navigating the Patent System: Learn the patent process and strategies to protect your invention

Read for Free
Buy at Amazon

RECEIVE PATENT ARTICLES

Stay up to date on major changes and get tips on the patent process.

We respect your privacy.

Popular Posts

Patent process overview
Patent process explained
How much does a patent cost?
Trademark process and costs
Patent process and costs

 

Services

Utility Patents
Design Patents
Patent Prosecution Services
Patent Defense Services
Patent-Law Counsel for In-House Attorneys
Trademark Prosecution Services
See All Services

Industries

Automotive Patents
Consumer Products Patents
Culinary Patents
Manufacturing Patents
Medical Patents
Optics Patents
Software & App Patents
See All Industries

Contact

James Yang
OC Patent Lawyer
2372 Morse Ave., Suite #178
Irvine, CA 92614
Tel: (949) 433-0900

Connect

  • Facebook
  • LinkedIn

Sitemaps

Sitemap: Pages | Sitemap: Posts

Terms of Use and Privacy Policy

By accessing this blog, you agree that no attorney-client relationship is formed except by a subsequent written retainer agreement. Also, you agree to not send confidential information unless directed by me to do so. The information posted on this blog is legal information and not legal advice.
Complete Terms of Use
Complete Privacy Policy

ADA Compliance

OC Patent Lawyer aims to ensure that its services are accessible to people with disabilities.
Accessibility Statement

Service Area

From our office in Irvine, California, we serve clients from all areas within Orange County and Los Angeles County, California.

© 2023 · James Yang, Your Entrepreneur and Mid-Size Business Patent Attorney