Patent Licensing Advice

[Buster Highmen]

I'm working on a very cool patent for lossless digital sound. We're calling it Virtual Vinyl.
The current standards for CD/mpX, flac, etc have harmonic losses when recording sound. We have a way around that.

The patent was granted last week. We have supporting proof of concept.

We have a patent lawyer who is giving us advice, but we're all complete babes in the woods about how to go about doing the licensing, and monetization.

We have all the help we need right now in terms of marketing, grammy winning ad art, the tech stuff and a company formed, biz license, etc.

But we could use some suggestions about how to go about making license agreements.

TGR, despite being an occasional font of stupidity, often has some great wisdom. So, if it's not too much trouble, I'd appreciate some constructive advice.

Update:

[iceman]

I got nothing, except to say, very cool, and congrats!

What color A-Star do you think you'll buy?

[MakersTeleMark]

I think its more important now to get it out there and have it be recognized as a superior standard while maintaining sole control of the format/encoding, and worry about licensing down the road.

$0.02

[Buster Highmen]

Options:

0) Sell outright, no strings.

1) License

A. Exclusively.

I) Royalties.

II) Allow or deny sublicense (transitivity) with constraints.

III) Require product development and sales.


B) Nonexclusively

I) Royalties
II) Require product development and sales.




2) Product Development Participation

A) Liability limits.

B) Hours limits.

C) Pay minimum.

D) Percentage of any improvements/changes outside of patent coverage.

3) Inclusion

A) Everyone in the company gets a slice.

[Buster Highmen]

I got nothing, except to say, very cool, and congrats!

What color A-Star do you think you'll buy?

Thanks, yeah, it's crazy. We already have multimillion corps coming at us.
I don't want an A-star, I made my move 15 years ago and you know where.

[Buster Highmen]

I think its more important now to get it out there and have it be recognized as a superior standard while maintaining sole control of the format/encoding, and worry about licensing down the road.

$0.02

Well, yeah, but we're a bunch of old goats the local tech giants have replaced by h1bsters and we've been around the block.

Everyone who has read it and understands how this shit works has their eyes pop out. It's pretty basic and a great idea: we don't do a2d conversion on record of the sound.

We have proof of concept running on an Arduino board and win32, but we all agree we don't want to make a product our of it and deal with all the beancounters, VC clowns and financial suckjackals (no offense to those of you in the business).

[fatnslow]

How much time/capital/equipment/mfg would be required to make a prototype version to shop to your target partners ? If this technology is really a step ahead of current tech it might be worth the trouble to show it in action and really get the bidding war to escalate. Be careful how/who you shop this to since tech vultures will fuck you in a second and dare you to sue. Unless you have an extra $500K kicking around to go after money against a corporate entity walk guarded and be paranoid until actual contracts are signed.

[PNWbrit]

Thanks, yeah, it's crazy. We already have multimillion corps coming at us.

I can probably get it pushed in front of a certain billionaire's investment team. Let me know.

[Buster Highmen]

How much time/capital/equipment/mfg would be required to make a prototype version to shop to your target partners ? If this technology is really a step ahead of current tech it might be worth the trouble to show it in action and really get the bidding war to escalate. Be careful how/who you shop this to since tech vultures will fuck you in a second and dare you to sue. Unless you have an extra $500K kicking around to go after money against a corporate entity walk guarded and be paranoid until actual contracts are signed.

It's patented and we have a well known local tech patent lawyer, so I'm hoping the idea is secure.
Again, any audio engineer who has seen it bugs out, it clearly doesn't cut out the 3rd order harmonics like all other digital formats.

So, while I greatly appreciate your suggestion, I'm specifically asking about what should be put into a licensing agreement and for what should we look in terms of getting shafted.

[Buster Highmen]

I can probably get it pushed in front of a certain billionaire's investment team. Let me know.

Thanks, we already have a few of the local tech giants interested and I'll follow up should the big A go unsourced.

But right now, we're just brainstorming on how this shit works and we really don't know anything about these agreements. As usual, I'm not convinced one has to be a rocket scientist to add something to the conversation.

[PNWbrit]

Thanks, we already have a few of the local tech giants interested and I'll follow up should the big A go unsourced. But right now, we just brainstorming on how this shit works and we really don't know anything about these agreements.

Meant more to his investment team but there's obviously the same connection onward to big A too if needed.

Also it appears as if virtualvinyl.com domain is available to purchase... big $$$ but might be worth doing?

[Buster Highmen]

Meant more to his investment team but there's obviously the same connection onward to big A too if needed.

Again, thanks, but before we interface with all these guys, we're trying to educate ourselves about how these licensing agreements are wrought. So we want to gird ourselves with info about how to negotiate the deal.

[Norseman]

Stoked for you, B.

Not smart enough to offer advice on licensing, just a thumbs up.

Don't let anyone steal your shit.

[Buster Highmen]

Stoked for you, B.

Thanks!

Not smart enough to offer advice on licensing, just a thumbs up.

Bzzzt, wrong answer in all too many ways.

If you were in our shoes, what would you ask for, how would you structure such an agreement?

Can you add anything simple and reasonable to the above outline?

Imagine you had a magic widget you invented that had a lot of market potential. What would you ask for? You of all people don't get an "I'm too stupid" hall pass.

Don't let anyone steal your shit.

Hopefully that won't happen....

[Viva]

Not knowing what your invention actually is, but having the impression that may have wide-ranging applications, I would posit the following because long-term value may very well be greater than current (i.e., selling now, outright):

Exclusive license with one of the big dogs capable of developing the technology further and making it "market-ready", along with the right to grant sublicenses. Let them deal with all the sublicensing drek. Ensure that your team (you have a company, an LLC, right?) receives pass-through royalties on all sublicenses. Have termination clauses baked into the license so that you can kill the deal if the licensee doesn't perform (i.e., doesn't have a product in the market in a timely fashion without good reason, etc.)

I dunno about this industry, but consider asking for upfront payment, full patent cost reimbursement, product development milestone payment (every time they hit a milestone, they've de-risked the technology, making it increasing likely that it will be a commercial success, and even more valuable, and your company ought to benefit from that increased value), and running royalties for the life of the patent.

These are just some initial thoughts. Sounds like you may have a platform technology, which means that it can several or more uses, ergo more sales. There's far, far more to it. If your patent attorney is any good, s/he can put you in touch with a crackerjack business/contracts lawyer. I may be able to get you some time with someone from DLH Piper in Seattle.

Were it me, I would serioussaurously look into a startup company to continue with proof-of-concept development for different applications if that's possible. If not, that is, applications are limited, then exclusive license (vide supra).

[XXX-er]

I am pretty sure Lee Lau does this shit

[PNWbrit]

I am pretty sure Lee Lau does this shit

Commonlaw too I think?

[Game Over]

Best of luck! FYI Numark has a DJ platform with that same name.

[Buster Highmen]

Not knowing what your invention actually is, but having the impression that may have wide-ranging applications, I would posit the following because long-term value may very well be greater than current (i.e., selling now, outright):

That's our perception: this can supplant all other digital music formats and provide the fidelity of vinyl. It's fucking huDge.

The idea is basically to represent sound by mechanical information. For example, when one plays a vinyl record, the needle in the groove goes up and down and left and right. The idea is to trap that mechanical information and then the output of reading that information (on play) would drive the signal just the way a needle did.

All the other mechanisms basically use a bunch of digital information to approximate a sound wave which always chops off some portion of the curve or supplants the original signal with some quadratic or cubic curve fit between sample points.

The patent is more complicated, but that's the idea.

Exclusive license with one of the big dogs capable of developing the technology further and making it "market-ready", along with the right to grant sublicenses. Let them deal with all the sublicensing drek. Ensure that your team (you have a company, an LLC, right?) receives pass-through royalties on all sublicenses. Have termination clauses baked into the license so that you can kill the deal if the licensee doesn't perform (i.e., doesn't have a product in the market in a timely fashion without good reason, etc.) .
I dunno about this industry, but consider asking for upfront payment, full patent cost reimbursement, product development milestone payment (every time they hit a milestone, they've de-risked the technology, making it increasing likely that it will be a commercial success, and even more valuable, and your company ought to benefit from that increased value), and running royalties for the life of the patent.

Awesome, thanks, Durango beers on me. I think I tried to touch on that in the exclusive license points above, but your terminology is better.

These are just some initial thoughts. Sounds like you may have a platform technology, which means that it can several or more uses, ergo more sales. There's far, far more to it. If your patent attorney is any good, s/he can put you in touch with a crackerjack business/contracts lawyer. I may be able to get you some time with someone from DLH Piper in Seattle.

One way to look at it is organizing microcontroller data to produce sound, but the underlying tech can drive any array of microcontrollers.

Were it me, I would serioussaurously look into a startup company to continue with proof-of-concept development for different applications if that's possible. If not, that is, applications are limited, then exclusive license (vide supra).

The problem with a startup is that 2 of us helped get msft going back in the day and have been through the startup grind and got shafted by msft.

So we're really of the mindset to do the dog and pony show making noised on the Arduino board and technical demonstrations of the idea, but don't want to get VC money and all that to actually launch a product, the VirtualVinyl pod.

For clarity, let me note, it's not my patent, it's a friend of mines, I just did the work with the lawyers and patent office recently and wrote the code that drives the proof of concept framework.

[Mofro261]

Nice B, really hoping good fortune smiles your way.

[Buster Highmen]

Nice B, really hoping good fortune smiles your way.

Thanks man, heli laps for you putting up with my slow ass in the skintrack.

Now, how would you structure this?

[Cono Este]

SharkTank

Beat me to it.

Find the best partner who already has the mkt and go for the best deal. Strike while the iron is hot.

Good luck.


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[jgb@etree]

I'm working on a very cool patent for lossless digital sound. We're calling it Virtual Vinyl.
The current standards for CD/mpX, flac, etc have harmonic losses when recording sound. We have a way around that.

I have quite a bit of experience with lossless digital audio, but am a bit confused by what you are claiming. Lossless compression algorithms have been around for a while now and a true lossless algorithm/codec (flac, shn, etc) is simply taking a prexisting waveform and compressing that waveform to make it smaller and it can then be decompressed and will be an absolutely identical copy of the original uncompressed wave.

[Buster Highmen]

I have quite a bit of experience with lossless digital audio, but am a bit confused by what you are claiming. Lossless compression algorithms have been around for a while now and a true lossless algorithm/codec (flac, shn, etc) is simply taking a prexisting waveform and compressing that waveform to make it smaller and it can then be decompressed and will be an absolutely identical copy of the original uncompressed wave.

Our idea is orthogonal to that and the old CD/MP3/Flac mechanism.

Besides, I'm not asking for a critique of the tech, we have the patent and it's not like the old tech at all.

I just was asking for input on license agreements.

[PNWbrit]

I have quite a bit of experience with lossless digital audio, but am a bit confused by what you are claiming. Lossless compression algorithms have been around for a while now and a true lossless algorithm/codec (flac, shn, etc) is simply taking a prexisting waveform and compressing that waveform to make it smaller and it can then be decompressed and will be an absolutely identical copy of the original uncompressed wave.

You should read his explanation again.

He's not talking about losses through a compression process but losses in the process of extracting the actual music from vinyl or (better yet?) master tape.