Licensing is one way of commercializing your idea or invention. It contractually allows another person or company to bring your idea or invention into the marketplace. The benefits of licensing to the inventor are 1) guaranteed royalty payments, in most cases, and 2) the ability to focus on inventing rather than on running a business.
Licensing is when a person with an idea or invention enters into an agreement with a person or company, giving them the right to use it. Licensing an idea or invention is an option, in most cases, for someone who can show ownership of the idea or invention. The greatest level of ownership is a granted non-provisional patent.
However, there are some instances when a person or company will enter into an agreement without a granted patent. Certain industries do not require a granted non-provisional patent, and some companies that sell to a specific market niche may not require one either if they recognize the idea or invention as innovative. If you do not have a granted non-provisional patent, you should always get a signed non-disclosure agreement before divulging your idea and invention, and you should also conduct a patent search and ideally file a patent .
Most companies will not accept unsolicited submissions, or ideas and inventions from unknown sources, because they are concerned about accepting an idea or invention and then being exposed to lawsuits. In such a case, you can contact them through a third party such as an attorney or licensing agent.
Excerpt From Inventing to Win™ the ultimate online digital course www.inventingtowin.com by award winning inventor and founder of The Inventors Road Show™ Andrea Rose.