GENE SCOTT : President, Inventors Forum

Got the world’s greatest idea for a golf club with sonar tracking? How about a motorcycle lock, a la The Club? Or a squeegee for an oil dipstick? Gene Scott, president of the Inventors Forum in Irvine, has seen all of these products. But inventing is one thing; getting it on the store shelves is another. Many times, inventors know little about getting their ideas to the consumer. With the recession, more and more inventors are out there trying to get a big company to license their product. Scott spoke to Times correspondent Ted Johnson.

You have a five-step process for inventors. What is it?

Step One is establishing the legal date of conception of the idea. Step Two is doing the market survey to see if the idea has been commercialized yet. Step Three is a patent search to see if the essence of the inventive concept already is protected by others. If you are not the first inventor in the whole world, patents in other countries can knock you out as well. The fourth step is building a model, proving it works and establishing that it looks, acts and feels as wonderful as you thought it would. And finally, probably the most important step is to gather together a business plan to identify how are you going to go about taking this to the marketplace and make money with it.

You say that Southern California has a greater percentage of inventors. Why?

I do believe that in Southern California, especially Orange County, there are far more inventors than any place else. Whether it has to do with the entrepreneurial activities of the larger companies here or the university environment or what, I’m not sure. This is the center of the world in terms of medical-invention technology, so there are an awful lot of engineers and medical inventors.

What is the biggest roadblock for an inventor?

Persistence. Inventors are idea people. They can’t help themselves. An inventor is a person whose brain keeps inventing things. Some of them are more prolific than Thomas Edison ever was. It’s almost a disease. Every time they see something, they start thinking of how it can be better. But they’re not entrepreneurs. What they need to do is hook themselves up with a partner, a guy who knows how to wheel and deal and put together a venture that will work.

Where does the money come from?

Most projects are not funded by a raw cash infusion. They are usually funded by venture partners. You have this invention and you don’t know how to get it to market, so you go to a company. They may license it from you. That is probably the most viable way for an inventor to go. So then they will manufacture it and sell through their normal distribution channels. The other possibility, where theoretically you don’t need such a strong patent, is a venture where you might go to a manufacturer and say: “I’d like you to be my partner.” They might put up the tooling. You’ll go to another manufacturer and they will provide the plastic resin to make the product. You go to possibly a third partner who has got a packaging house. So you got all these partners in the project. No one really puts up a great sum of the money. They are putting up some of their capital. But for that you need a deal maker, and very few inventors can do that complicated of a deal. They just don’t know how to sell it, and they also don’t know how to give away enough. They say: “I have the world’s greatest invention, and all I need to do is show it to somebody and they will plunk down lots of money for 5% ownership.” That’s not the way it works. People who put up money are going to want control or ownership.

How much does the pitch count before a group of potential investors?

What you need to do is be able to tell them what you want. That is one of the more difficult things. These inventors get up in front of (the Orange County Venture Forum) and tell them how wonderful the invention is, how much money they can make, but they don’t say what they want. They don’t put it in terms of a business deal. Often people sitting there will say: “How much money do you want?” And the inventor will say: “I don’t know. Somewhere between a quarter million and four million.” They say: “Well that doesn’t tell me anything.” That’s the big stumbling block.

How has the recession had an impact?

It has choked off the money. It has made it much more competitive. And a lot of inventors have come out of the woodwork because they are looking for ways to make more money. They want to commercialize an idea they thought of three years ago. They didn’t have time to then when they were gainfully employed and making a lot of money. Now all of a sudden the chips are down and they are trying to get their invention going and they are finding it really hard because financial support has tended to dry up.

Will the U.S. patent system recognize an inventor who is first to file, like in other countries, rather than the current system, where the patent goes to the first person who came up with an idea?

It hasn’t happened yet. A lot of American inventors, small inventors in particular, like (the current first-to-invent system) because they don’t want to have to run out and file a patent on every idea that they have. People in Congress are under a lot of pressure from small inventors not to change to that system. But I believe it will have to change if we are to get a true harmonization (with other countries) and do away with the advantages of foreign countries like Japan.

Will a change give advantages to larger companies, which have the money to file a patent application each time they come up with an idea?

No doubt it will. Companies usually file immediately now anyway. They have the money to do it and they can write it off their taxes. A small inventor is pinching his pennies, and he doesn’t want to file unless he absolutely has to. He’d rather be spending the money on developing the product and prototype rather than filing fees.

On the mind-set of an inventor.

“An inventor is the type of mind that is afflicted with this disease of always improving things and thinking of new things.”

On the need for a uniform patent process.

“I would like to see a worldwide patent office that doesn’t cost an arm and a leg. But it is so mixed up in politics that obviously that sort of thing takes forever to come about.”

On low-cost marketing.

“It’s becoming a necessity. It is making the proper contacts, using influence peddling to get the people to say: ‘Yes we are going to go with this.’ It is a lot of sweat equity rather than putting money out.”

On mistakes first-time inventors make.

“They think they have something marketable. An idea in your head is worth nothing then. You want to develop a knowledge of what the market is about.”