Do I need a patent, trademark, or copyright to protect my idea?

Because we are not attorneys, we can't provide legal advice. If you have a legal question, we recommend you contact a practicing attorney. To receive licensing royalties from your idea, you do not need to register statutory rights. Toy and gift companies only look at the commercial potential of your item; if they see potential and wish to license it, they will often pursue a patent or other rights on your behalf.

Do I need a working prototype?

We prefer to work with photographs, sketches, a DVD or even just a written description of your idea, whichever is most appropriate for your situation. If you have a game, send us a copy of the board and a clear set of rules. If you have a toy, send photographs, sketches or a DVD. If you have just an idea, write a description and tell us how it works.

In an ideal world, every inventor would have a high-quality, fully functional and beautifully decorated prototype. But this is not an ideal world. To avoid unnecessary investment, you're much better off having your item reviewed during its early developmental stage.  We prefer to work with photographs, sketches, a DVD or even just a written description of your idea, whichever is most appropriate for your situation.
If you have a game, send us a copy of the board and a clear set of rules. If you have a toy, send photographs, sketches or a DVD. If you have just an idea, write a description and tell us how it works.  We try to see the potential in your new idea no matter what your submitted materials look like. Send us what you can; if we need more, we'll call.

How long does a product review take after I submit my idea?

Our goal is to complete a product review within three weeks of receiving your submission; most are done in 7 to 10 business days.

How long is the licensing process?

The length of time it takes for us to achieve success is uncertain; no one can give you a definitive timeline.  Allow at least 18 months for Excel to present your idea to industry and, once licensed, 18 to 24 months before your idea arrives on the retail shelf.

How much can I make?

The rule of thumb is that inventors are paid five percent of the wholesale price. There are three ways your invention can make money.

1) OPTIONS. This is a fee a company pays to have your item for exclusive review during which time we promise not to show it to anyone else. Option payments can range from hundreds to thousands of dollars per month.

2) ADVANCE ROYALTIES. This is a payment advanced against future royalties usually paid upon signing a license agreement. The company deducts this advance from royalties payable later. Advances can run from a few thousand to tens of thousands of dollars.

3) ROYALTIES. This is what it’s all about! Royalties are rent that the company pays for the use of your idea. There is almost no limit to total royalties, which can range from a few hundred dollars over the advance to millions upon millions.

How are royalties calculated?

Estimating royalty income is based on the wholesale price, not the retail price. Let us say you have a doll that is manufactured and sold by Hasbro that retails for $34.99 with a wholesale price of $20.00.

If the royalty rate is five percent and 300,000 units are sold, then the income will be: $20.00 x 5% x 300,000 = $300,000 and your share will be 60% = $180,000.

Now suppose your idea is a mini-game from Cardinal Industries that includes a well known character license such as Dora The Explorer™. The royalty rate is likely to be only two or three percent, because the manufacturer is also paying Nickelodeon 12 percent, more or less, for the character rights. Hence the calculation will be as follows:

If the royalty rate is 2.5 percent with a wholesale price of $9.00 and 100,000 units are sold, then the income will be: $9.00 x 2.5% x 100,000 = $22,500 and your share will be 50% = $11,250.

How do you make money?

We do not sell your idea outright but rent it for a fee-per-unit sold, called a royalty. If your new concept has a unique and legally protectable feature that could excite a marketing manager, we will present it for you. When we enter into a license agreement on your behalf, we do not charge a fee but share in the royalties generated, and our percentage depends upon the size of the company licensing your product idea (the licensee).

If the agreement is with either Hasbro or Mattel, then the split is 40 percent to us and 60 percent to you of any payments received; for example, options, advance royalties or royalties. If the licensee is small, with limited geographic distribution, then we share equally in the income and continue to find licensees for other countries.

Are there specific things you're looking for?

Yes. Toy and gift companies are always looking for exciting products with new and unique features. Check out our Wish List for details.

Do I have to come to Minneapolis to see you?

We always welcome inventors, but there's no need for you to visit us. Most inventors send us their materials for a product review. If you'd like to consult with us in person, however, call to make an appointment.

Do you do anything besides toys and gifts?

While we don’t often venture outside the toy and gift arena, if you do have a great idea, let us know.

How do I know you're honest?

Check up on us here National Inventors Fraud Center and here Better Business Bureau.

What do all these terms mean?

Intellectual Property: A new idea that can be trademarked, copyrighted or patented.

Licensee: The company or entity who acquires the right to manufacture your intellectual property.

Licensing Contract: An legally binding agreement between the licensor and licensee granting permission for the licensee to use the licensor’s intellectual property. The document includes specific terms and conditions such as distribution territory, compensation, warranties of ownership, etc.

Licensor: The individual or entity that grants permission to use an intellectual property.