Invention Invention &&

Innovation Innovation

Choosing a VentureChoosing a Venture

Entrepreneurs may seek a business venture in one of two ways:

1. Idea-Driven Enterprise

2. Market-Driven Enterprise

Idea-Driven EnterpriseIdea-Driven Enterprise

The idea and/or innovation or invention The idea and/or innovation or invention comes first.comes first.

Then you need to find out if enough Then you need to find out if enough people actually want, need, and would people actually want, need, and would purchase it to earn a profit.purchase it to earn a profit.

Market-Driven EnterpriseMarket-Driven Enterprise

Entrepreneurs look for existing opportunities where Entrepreneurs look for existing opportunities where there is a need, or want for a particular kind of there is a need, or want for a particular kind of product or service.product or service.

Entrepreneurs research trends in the market, Entrepreneurs research trends in the market, particularly in following areas:particularly in following areas:

1. technology1. technology 2. social and demographic (i.e. the environment,2. social and demographic (i.e. the environment,

fashion, health, family and entertainment) fashion, health, family and entertainment) 3. the economy3. the economy 4. political and legal4. political and legal 5. competition – Does the product or service exist? If 5. competition – Does the product or service exist? If

so, how will yours be different from the competition? so, how will yours be different from the competition? If not, how will you keep yourself ahead of any If not, how will you keep yourself ahead of any competition that may eventually exist)competition that may eventually exist)

Business PlanBusiness Plan

A successful entrepreneur will develop a A successful entrepreneur will develop a business plan which will include industry business plan which will include industry and market research, a marketing and market research, a marketing strategy, and sales and profit projections.strategy, and sales and profit projections.

In order to obtain financial support from In order to obtain financial support from banks and/or potential investors an banks and/or potential investors an entrepreneur needs demonstrate s/he has entrepreneur needs demonstrate s/he has done his/her homework and is confident done his/her homework and is confident the business has real potential for success. the business has real potential for success.

Part 1: InventionsPart 1: Inventions

Invention Defined:Invention Defined: A product or process that does something A product or process that does something

that has never been done before.that has never been done before.

Inventions and EntrepreneurshipInventions and Entrepreneurship When the invention fills a market need, its When the invention fills a market need, its

sets the stage for entrepreneurship.sets the stage for entrepreneurship. Not all inventors are entrepreneurs.Not all inventors are entrepreneurs. Some inventions do not make it into the Some inventions do not make it into the

market.market.

Canadian InventorsCanadian Inventors

Alexander Graham Bell – telephoneAlexander Graham Bell – telephone Joseph-Armand Bombardier – snowmobileJoseph-Armand Bombardier – snowmobile Gideon Sundback – ZipperGideon Sundback – Zipper James Hillier – MicroscopeJames Hillier – Microscope James Naismith – BasketballJames Naismith – Basketball Frederick Grant Banting – InsulinFrederick Grant Banting – Insulin Wilfred Bigelow – PacemakerWilfred Bigelow – Pacemaker Dianne Croteau – Actar 911 (CPR Doll)Dianne Croteau – Actar 911 (CPR Doll)

Taking the Next StepTaking the Next Step

Entrepreneurship beginsEntrepreneurship begins when the new invention when the new invention oror innovation becomes the innovation becomes the inspiration for a new inspiration for a new ventureventure for profit or not-for-profit. for profit or not-for-profit.

Those First StepsThose First Steps

1.1. Protect the invention or innovation byProtect the invention or innovation by obtaining: obtaining:

a. a patent; or a. a patent; or b. a copyrightb. a copyright

Creator must decide to either:Creator must decide to either: a. license the idea;a. license the idea; b. franchise it;b. franchise it; c. produce it; orc. produce it; or d. or sell the rights to someone else to do d. or sell the rights to someone else to do

withwith it as s/he pleases it as s/he pleases

Intellectual Property Intellectual Property Patents, Copyrights, & Patents, Copyrights, &

TrademarksTrademarksPatent Patent Gives the holder the sole right to Gives the holder the sole right to

make, use, or sell an invention for a make, use, or sell an invention for a set period of time, preventing others set period of time, preventing others from using it without permission.from using it without permission.

If someone were to use it without If someone were to use it without permission, s/he or they could be permission, s/he or they could be sued for a great deal of money.sued for a great deal of money.

Intellectual PropertyIntellectual Property

CopyrightCopyright Gives someone the exclusive right to publish, produce, Gives someone the exclusive right to publish, produce,

sell, or distribute works of literature, music, art, and sell, or distribute works of literature, music, art, and software.software.

Trademark:Trademark:

A word, symbol, or design, or a combination of A word, symbol, or design, or a combination of these,these,

used to distinguish one company’s goods or services used to distinguish one company’s goods or services from other goods or services. from other goods or services.

Government WebsiteGovernment Website http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/

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Name that Trademark?Name that Trademark?

PatentsPatents

The process of obtaining a patent or The process of obtaining a patent or copyright:copyright:

is longis long is expensiveis expensive often requires the help of a lawyeroften requires the help of a lawyer requires a search for similar patents or requires a search for similar patents or

copyrights to ensure it is not too much like copyrights to ensure it is not too much like something else that is already patented or something else that is already patented or has a copyright.has a copyright.

Licensing AgreementsLicensing Agreements

LicensingLicensing The inventor allows another business to The inventor allows another business to

use his or her invention for a fee.use his or her invention for a fee. The inventor is not responsible for The inventor is not responsible for

manufacturing or distributing the productmanufacturing or distributing the product

RoyaltyRoyalty The fee, collected by the inventor, which The fee, collected by the inventor, which

can be either a fixed amount or a can be either a fixed amount or a percentage of the total sales revenue.percentage of the total sales revenue.

Examples of Licensing Examples of Licensing AgreementsAgreements

Computer software programs are Computer software programs are licensed to computer manufacturers licensed to computer manufacturers and software developers. Javascript and software developers. Javascript was licensed to Microsoft and IBM.was licensed to Microsoft and IBM.

Sports teams, stars, musicians Sports teams, stars, musicians license the use of their name, license the use of their name, pictures, and logos on products.pictures, and logos on products.

Franchising AgreementsFranchising Agreements

Franchise AgreementFranchise Agreement Similar to licensing agreementsSimilar to licensing agreements It is an arrangement for one business, such as It is an arrangement for one business, such as

Tim Horton’s, to license the rights to its name Tim Horton’s, to license the rights to its name and procedures to another business or person.and procedures to another business or person.

FranchiserFranchiser The parent company who grants the franchise The parent company who grants the franchise

and provides goods and/or services to the and provides goods and/or services to the franchises.franchises.

FranchiseeFranchisee A person who runs a franchise operation and is A person who runs a franchise operation and is

under a contract, or licensing agreement, with under a contract, or licensing agreement, with the franchiser.the franchiser.

Producing the InventionProducing the Invention Long and very expensive processLong and very expensive process

Venture CapitalistsVenture Capitalists Inventors may partner up with venture Inventors may partner up with venture

capitalists who provide capital capitalists who provide capital (funding) to help produce the (funding) to help produce the invention. In return, the venture invention. In return, the venture capitalist often retain part ownership capitalist often retain part ownership of the company. (i.e. Dragon’s Den of the company. (i.e. Dragon’s Den venture capitalists)venture capitalists)

A contract will outline the role of each A contract will outline the role of each person.person.

Selling the RightsSelling the Rights

When an inventor gives up complete When an inventor gives up complete control of his/her/their invention and control of his/her/their invention and sells the patent or copyright to sells the patent or copyright to someone else.someone else.

Pros?Pros?

Cons?Cons?

Part 2: InnovationPart 2: InnovationInnovation DefinedInnovation Defined Using new technology, materials, or Using new technology, materials, or

processes to improve:processes to improve: a. existing products, or a. existing products, or b. how they are used;b. how they are used; c how they are produced;c how they are produced; d. how they are packaged;d. how they are packaged; e. how they are distributed; and/ore. how they are distributed; and/or f. how they are designed.f. how they are designed. Innovators often benefit from building on Innovators often benefit from building on

what inventors have already done.what inventors have already done.

Most innovations arise out of seeking a Most innovations arise out of seeking a competitive advantage over another competitive advantage over another business.business.

ActivityActivity

1)1) Explain the difference between an Explain the difference between an invention and an innovation. Give an invention and an innovation. Give an example of eachexample of each

2)2) Outline the three ways to protect Outline the three ways to protect your ideas and innovations.your ideas and innovations.