In the first installment, I discussed licensing in general terms and recommended a trip to your public library. That trip should result in several note cards containing the names of potential licensees for your invention.

But as long as you're in the library, you might as well do the research on your second priority candidates (the people who can make your invention). The theory here is that there are thousands of job-shops and contract manufacturers who are just dying to find a product of their own to manufacture and sell. By doing so, they will be less dependent on making products or components for others to sell.

Ask the Reference Librarian to show you the

Thomas Register of Manufacturers

. In this multi-volume wonder, you will find listings of the manufacturers of every kind of product you could ever imagine.

Find the categories that apply to you and begin filling out cards on the companies, starting with the company name, followed by address, phone number and a notation on what kind of product they make. If you are using more than one product category, alphabetize the cards as you go along to avoid duplications.

Now, a blanket statement that you must take on faith (I don't have space to go into the "why")--You must identify the name of each company's president so you can write directly to that person by name.

But the Thomas Register won't give you many such names, so you must ask the librarian to show you the

Standard & Poors Register of Corporations

and the

Dun & Bradstreet Million Dollar Directory

You'll find many of your candidate companies in these references along with the presidents' names.

You may also ask the librarian to suggest other directories or trade publications that may help you. To take the process a step further, ask to see manufacturers' directories from various states to find the presidents' names for all but the tiniest of companies.

Once you've assembled your note cards, you are ready to take the next step. Since businesses normally do business with other businesses, approach them on that level. Purchase some nice (but not fancy) letterhead from a neighborhood print shop. Stick with black ink on white paper.

When choosing a company name, keep it simple. For example, you, Joe Smith, might want to order letterhead with "Joe Smith Company" on it. If you use an assumed name for your company, be sure to register it with the county clerk.

You will then send a typewritten letter to the president of each candidate company and enclose a one-page nonconfidential description of your invention. The description can be quick printed, but you must type the letter individually. If you don't type, connect with people who do (many of these advertise in local newspapers or grocery store bulletin boards).

Basically, your cover letter will say something like this:

Dear Mr. (or Ms.) _____

I understand that your firm is an established manufacturer of pet products and, therefore, felt that you might find interest in a unique new dog collar.

As you will note from the enclosed nonconfidential description, this new collar offers several specific advantages over conventional collars and can be produced less expensively.

I would be pleased t provide you with more information and could arrange for you to review prototype collars if you could have interest in exploring this new product-licensing opportunity further.

Sincerely,

Your one-page description should serve to create interest in the part of the prospective licensee. It should be a logical presentation in the following format:

WHAT

: What is it and what does it do.

WHO

: Who uses it, where and how.

WHY

: Why is it better than other products.

PROTECTION

: Patented, Patent Pending, Patentable, etc.

STATUS

: Prototype, etc.

ADDITIONAL INFORMATION

: Photo, patent model.

CONTACT

: Your name, address, phone number.

Nowhere in this first contact do you refer to money or specific terms. It is not necessary. Such terms will be discussed later, between the two interested parties on a personal basis.

To give you a rough idea of what to expect, if you send out 100 letters, approximately 30 companies may write back and say "thanks, but no thanks." Five or ten will want you to sign a disclosure document. Still another five may request further information.

What about the remainder? You will never hear from them. With these companies, you may want to follow up, but only if it's done after a reasonable period of time (three weeks or more) and in a nice, diplomatic way.

Even if you receive some positive responses, don't quit your job or go shopping for a personal island retreat. Be ready for some close scrutiny of the true value of your invention.

More importantly, don't be discouraged if you can't seem to convince anyone of the value of your invention. You'll be in good company. More than 20 companies turned down Chester Carlson's idea of making photocopies, now know as Xerography. According to Carlson, "I was met with an enthusiastic lack of interest."


John W. Morehead is a licensing executive and president of Technology Search International, Inc. He may be reach at 500 East Higgins Road, Elk Grove Village, Illinois 60007-1437. The phone number is (847) 593-2111. Mr. Morehead may be faxed at (847) 593-2182.