Companies and your prototype
An 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.
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