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I was reading Stanford's technology transfer statistics. It looks like in the past around one quarter of their patents were licensed whereas now the number is greater than one third. This may at first sound encouraging to the aspiring inventor.

However most do not produce substantial revenue.

The two main reasons are

  1. Small addressable market
  2. Miscalculation of the quality of the value proposition

There are other smaller reasons like

  • poor enforceability
  • poor leverage
  • design arounds

But for the most part Im looking to get an understanding of those two main reasons and which one plays what role.

The reason I ask is that Im trying to create a narrative around inventorship which can explain why some inventors get rich and others don't.

Thanks for your help

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  • I don’t know of any specific research on this. I think your speculation on the reasons is plausible. As for why most inventors don’t get rich, I believe most inventors work for a company and as a result the company owns the invention. This was certainly true for me.
    – Eric S
    Aug 22, 2023 at 2:23

2 Answers 2

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I have worked with university patents and licensing for 16+ years and want to share one big item missing from your list. People.

I have seen many great ideas get licensed and then die because of poor management and leadership. On the flip side I have seen some pretty questionable ideas raise millions of dollars (think Theranos) because they had management that could sell themselves and their vision.

The hard thing for most universities is finding good entrepreneurs to take the risk and work with these early stage inventions. There are plenty of good ideas and good patents but without the right people bringing them forward they will never succeed. This is especially true as you get outside of the life sciences area.

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Some issues that affect independent inventors are:

  • Decision between licensing and starting a company to exploit their invention.

  • Marketing ability vs. technical ability.

  • Unrealistic expectations.

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