My first full time job out of college was working in a trophy factory. It was a repetitive motion job which I despise, but somehow each day I would keep my head in the game between breaks. Sometimes during the breaks I would go into the bathroom and vomit because of the mindless slave labor I had to endure. I just didn’t see any way out of my situation and passive income ideas were foreign to me. I became close with one of the other assemblers there and we would talk to make the days go by quicker. Anyway, one day he told me that years prior, he had submitted a patent for a witty invention which really perked my interest. It revolved around his interest in eating ice cream out of large cartons with a spoon. He told me that when he’d reach the bottom with his spoon his hand would always touch the side of the sticky ice cream carton. So he created two smaller cartons that were bound together by a cardboard strap. The bottom of both cartons were to face each other and the strap was to be wound around the connecting area and glued into place. The idea was that after buying the ice cream you could take off the strap and both cartons would come apart, making it easy to eat the ice cream. No mess at all for the consummate ice cream aficionado. When I heard about his idea I asked him if he had done anything with it and he said no. His patent existed but he never contacted any ice cream companies to find a buyer. He seemed content with the job and being able to just get by in life.
Isn’t that sad? It’s such a great idea but it never gained any traction because Chris was never willing to take the extra step to market it. However, there are others who are willing to do what’s necessary and they become folk heroes when they reveal their millions in passive income. These kinds of people may even have somewhat lackluster ideas but they find people who are interested. For example, a few years ago there was a heavy set lady who had a passive income idea for the portly woman. She didn’t like how her skin would bunch up around her bra shoulder strap so she created fabric strips that covered he entire shoulders. Then she made the ends hang down and attach to the area that supports the chest. Anyway, she liked how it looked and felt and she thought other women would too. So she contacted 40 bra manufactures to see if they would buy her witty invention. Finally one company responded and now she has a great business agreement where she collects passive income on the international sales of her witty invention.
Another woman who didn’t even graduate from high school was a long term employee at McDonalds. All day she would take orders and prepare the fries and drinks. Anyway, she liked a tidy home and one day she tried to clean the skirt around her bed. But to do this, she had to take the mattress off the frame. Then she had to take the cover attached to the skirt off which proved to be a major undertaking. Her husband didn’t want to help her but suddenly she had an epiphany. She decided to cut the skirt off the bed and put a zipper on it. From that day bed cleaning was made easy because of what she had figured out.
To get the word out about her witty invention she didn’t use the internet. Instead, she managed to send 50 hand-written letters to mattress manufacturers about her idea. 49 companies said no but 1 said yes. Now she gets income on every sale of her product throughout the world. So far she has amassed over 10 million dollars through her simple idea. You can think of things like this too my friend.
In any country where there is a solid democracy, you can take advantage of some amazing opportunities. First you need that “Aha” moment and the will to finish your idea till the end. You also need to know about how to protect your idea with a patent. In the last story that I covered, the inventor was lucky because she had not patented her idea before approaching potential partners. Fortunately, one was honest and helped her create a patent in her name before partnering with her in the marketing. Other unseasoned inventors haven’t fared as well, however, so it makes sense to protect your ideas before you go public with them.
In this interview, I talk about patents and trade secrets: two subjects that you will have to deal with as an inventor. If you apply for a patent, you will have to disclose everything in regards to your invention’s design. With a patent, anyone can access and read about what you have invented. This has allowed Samsung to keep up with Apple. The stolen technology is refined and used in Samsung’s mobile devices. Apple sues Samsung for these infringements and gets compensated financially, but it’s never more than the profit that Samsung has made from sales.
This is an issue that needs to be discussed if you plan to market your witty invention. In this blog’s second example, we talked about a woman who invented a bed skirt that uses a zipper. That inventor was lucky because she had not patented her idea before approaching potential partners. Fortunately, one was honest and helped her put the patent in her name before partnering with her in the marketing. I used to be friends with a guy who marketed a Chinese herb that cured acne. One day he told me the humble beginnings of his product and the story only reaffirmed my distrust for people. His boss was the company CEO and inventor of the product. She spent years testing thousands of Chinese herbs to find out which one fought acne the best. One herb really stood out so she went to many pharmaceutical companies to find a marketing partner. One of the people that spoke with her seemed friendly and supportive but never made any commitment to work with her. It turns out that right after the meeting, this man filed a patent for the herb under the same therapeutic indication… but it was rejected because the woman had already filed one. In the end the man lost his job because the inventor raised a stink about his dishonesty.
Anyone who knows about the quandary between Apple and Samsung can safely assume that they will be at each other’s throats for a while. It’s the way of things in the field of technology where every idea has to be patented. But there are some situations outside of technology where a company can get away with protecting a product without revealing the nuts and bolts behind it. This is especially true in the food industry where they commonly file trade secrets. When you secure a trade secret, you tell the patent office the ingredients of your product but not how the ingredients are implemented. Case in point, you can see all of the yucky ingredients of Coca-Cola on the side of each can, but you won’t get enough information to emulate the production process. The same holds true for Kentucky Fried Chicken, which keeps their production process written on two slips of paper. They are both stored in safes and if they need to be moved, they are transferred with the help of armed guards in security trucks.
There are some products like WD-40 that are not protected by a patent or a trade secret. This is done because disclosing anything about the production process would make it too easy to copy the product.
Have you ever heard of Fage yogurt? I haven’t but I sure have heard of Chobani. It’s unfortunate that Chobani yogurt may have its origins with Fage, which was unable to grow fast enough to get enough market share. According to the ex-wife of Chobani president, Hamdi Ulukaya, the Chobani yogurt recipe was stolen. She claims that her then husband met with a former employee of Fage in Europe and paid $40,000 for the recipe. Right away we can see that the Fage recipe was protected (or not well protected) by a trade secret. Each of Fage’s employees signed a confidentiality agreement and if the accusation is true, one broke that agreement for the sake of money.
It’s sad that even through the press, we learn about recipe details in the court proceedings. It’s been reported that Chobani uses 3 cups of milk to make one cup of yogurt. We also find out that the yogurt is made with the active cultures “L. Acidophilus, Bifidus, L. Casei, S. Thermophilus and L. Bulgaricus. It’s been proven through these open disclosures that the Fage and Chobani recipes are similar but not identical. However, if I were a president of one of these companies, I would furious that my recipe was being dictated by major news sources covering the court proceedings. I would also be angry at myself for trusting the recipe of my livelihood with one of my employees.
One more thing should be mentioned about the issue of securing a trade secret to protect your witty invention. If someone invents the same thing on his own by natural endeavor, he has the right to call the invention his own as well. And even if he did reverse engineer the design of something protected by a trade secret, there’s no rule that says he should be penalized for doing so.