T.V. is all agog over Inventors
There's a series on the USA channel, Made in the USA , there will be one coming to a PBS station near you, and next year ABC will have it's own reality show based around inventors and their inventions. You may find yourself and your invention on T.V. in front of millions of potential users of your invention.
Here's the question, is it a good thing to put yourself and your invention on the air?
I took a look at the fine print on the application for American Inventor. If you are the "winner" of that show what you win is an advance on future royalties of your invention. You get to keep all of one million dollars that your invention generates... anything above and beyond that one million dollars apparently goes tot he producers of the reality show because one of the things that winning wins you is the transfer of ownership of your invention from yourself to the producers of the show. In other words the producers pay you your prize out of your own royalties, keeping everything beyond that one million to themselves. No mention what happens if someone drops the ball and your invention never gets around to generating one million dollars in royalties, I guess you could end up having to pay back the deficit.
But that is a bit luckier than being one of the nine finalists… they get nothing and the producers holds a option to license their inventions for the period of one year.
I am currently trying to figure out if I really want to submit my latest invention to this contest... if I win, I may end up a bigger loser.
Here's the question, is it a good thing to put yourself and your invention on the air?
I took a look at the fine print on the application for American Inventor. If you are the "winner" of that show what you win is an advance on future royalties of your invention. You get to keep all of one million dollars that your invention generates... anything above and beyond that one million dollars apparently goes tot he producers of the reality show because one of the things that winning wins you is the transfer of ownership of your invention from yourself to the producers of the show. In other words the producers pay you your prize out of your own royalties, keeping everything beyond that one million to themselves. No mention what happens if someone drops the ball and your invention never gets around to generating one million dollars in royalties, I guess you could end up having to pay back the deficit.
But that is a bit luckier than being one of the nine finalists… they get nothing and the producers holds a option to license their inventions for the period of one year.
I am currently trying to figure out if I really want to submit my latest invention to this contest... if I win, I may end up a bigger loser.
posted by Steve at 7:58 PM
3 Comments:
What's up? You know, I didn't quite get the same thing from reading the legal as you did. The way I understand it, the 1 million IS against future royalties. They dont' mention what the percent for the royalties are, so it could take forever for you to pay back your advance. But... it is a worldwide license in perpetuaty if I recall correctly. What that means is, YES, they basically own your idea, BUT, it is still a licensing agreement. I did not read that after you hit the 1 mill mark you no longer collect royalties. In fact, I would assume whatever the original percent was, you would continue to collect. Unfortunately, the few people I showed the contract to all had different interpretations. One of which was a lawyer. So... I assume they will have you sign another contract when you make it to the final 8. At which point, the licensing agreement is hammered out. Percent base and all. But hey, the exposure could be huge. And, frankly, if you can sell your product for about $20 retail, that means about $5 to the owner of the license after everyone takes their cut. (sell for $20 retail, retial buys product for $10-$15 each, it costs $5 each to manufacture, $5 bucks left for owner. Of course, you have to then build in ad costs etc.) All in all, you're looking at about a 5-10% royalty on $5-$10. So let's say you're lucky, $10 bucks and get %10. That's 1 dollar per item sold. (Which is similar to a book publishing deal) That means, you need to sell 1 million units to pay back your royalty. that should take 1-2 years. If you have a sustainable product, it should be easy.
Good luck.
I think invent!man has the basics correct. Section 28 guarantees 1 mil in advance royalties to the one winning inventor and in return inventor grants a perpetual, worldwide license to the producer. Section 29 then states that the other 8 finalist grant the producer one year to decide if producer wants to pursue licensing for their inventions, but doesn't specify any other details about that licensing. Also, the contract does not specify royalty percentages, so either it's a "standard" percentage (if there is such a thing) or else it's to be negotiated later. Since it's not stipulated in the contract neither the inventor nor the producer can legally hold anyone to a specific figure, so it MUST be negotiated at some point. Definitely with the 8 if the producer decides to pursue, but also with the 1 before the million can actually be awarded. There are also no sections in the contract that hold the inventor liable if the invention fails at market, so there are no legal grounds for producer to require inventor to ever pay anything back. Also remember Simon's quote that announced the series... "We want this show to make someone a multi-millionaire" That implies the advance is just a way to pay you a million in one chunk, but not necessarily the only money you ever get out of it, or that they will try to cheat you out of a fair royalty. I also spoke at length with one of the show's ranking crew at the audition and the way he described it was that ABC would make plenty of money regardless. They would be thrilled, just as with Idol, if not only the winner went on to greater things, but if the other 8 went on to be millionaire's as well.
List of current opportunities.
http://abc.go.com/primetime/americaninventor/index.html
http://www.milliondollaridea.tv/about.html
https://www.inventnow.org/InventNow/do/inventorhome
http://www.bouncingbrainproductions.com/about.html
http://www.abc.net.au/newinventors/txt/s1028131.htm
http://www.usanetwork.com/series/madeintheusa/theshow/overview/index.html
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