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interested company may want to keep your prototype for a period of evaluation.
If you have only one prototype, this can limit your ability to approach other
companies. Your prototype is your
property, so to help you to stay in control of it:
Do not leave a prototype behind at first visit.
Insist that the company first sign a
legally binding agreement on
conditions of loan, drafted by your solicitor or patent attorney. It should cover
most of the issues raised below. (Feedback from inventors suggests that such
agreements are necessary. If the company refuses to sign, it may be too risky
to have any further dealings with them.)
Establish who will be responsible
for the safe keeping of your prototype, and that they agree to compensate you
for any damage or loss.
Specify the length of the loan
period and an end date.
In most cases a month will be long
enough. Do not loan your prototype for a
longer period without some form of payment. The company should also pay if
it insists that you do not approach other companies during the loan period.
Payment should depend on the
potential value of the IP. Your patent attorney can advise you on this.
- Ask for payment in
instalments and make it clear that if any instalment is not paid on its due
date, the loan agreement is immediately void.