Guidelines for the final report

The final class report should tell a mixed business/technical audience about the virtues of your invention. They will want to see two very different kinds of things:

  1. how cool your invention is (for the tech types)
  2. how to make money with it (for the corporate types).

 To convince this very different kinds of audience you will need a document neatly divided into two independent parts:

  1. a patent description
  2. a business plan.

The idea here is that the reviewers would be able to skip the parts they are not interested in or could give them to an associate to look at.

 Here’s what each part should contain:

THE PATENT

 Write your idea in the same format as a US. Patent. These are its parts:

  1. Abstract (this is the last thing to write; why? Because it requires an overall view of what the patent is about, which you can only provide efficiently after you’ve written the whole thing). Usually it looks a lot like the first of your claims. The drawings can immediately follow the Abstract.
  2. Background: Here you talk about the problem solved by your invention. Mention what was available in the past, what other ideas where patented, and why they were full of defects. Set the stage for introducing your invention as the best thing after apple pie, but do not talk about your idea yet.
  3. Description of the drawings (which are usually placed right after the Abstract): Say what each figure is, but do not explain every detail. This section should be very short.
  4. Operation: Here explain in detail how your invention works, constantly referring to the drawings and the part numbers in it. Every time a part is mentioned, it should be followed by its number in a drawing, as in: "the leg 11, which is connected to the seat 12, of the chair 13." End this section —which you should make as long as necessary, since this is the heart of the patent— saying again why your invention is so much better than anything invented before, based on its operation, which you have just described.
  5. Claims: The legal part of the patent. I don’t expect that you’ll be able to write them like a lawyer, but try at least to write one or two. The idea here is to describe your idea in the most general terms possible, without infringing the prior art, so that other people can’t come afterwards and get around your patent. Don’t mention any elements that are not really necessary or anything that is not shown in the text and the drawings. Here you should not use numbers nor references of any type. An example in a patent for a chair: "I claim a piece of furniture for the purpose of sitting thereon comprising: a substantially horizontal surface, of size and strength sufficient for supporting a person’s rump; a plurality of elongated solid members attached to said horizontal surface on one end and having the other end free and able to rest on the ground, said ends being all in the same geometric plane." You can also add dependent claims such as: "2. A piece of furniture as recited in claim 1, wherein said horizontal surface is covered with a soft padding," or: "3. A piece of furniture as recited in claim 1, having further a substantially vertical, substantially flat surface attached to said horizontal surface, of size and strength sufficient for supporting a person’s back."

THE BUSINESS PLAN

This part is written for the business types. They want to see whether it is possible to make money with your idea, how much, how soon, and just plainly, how. Therefore, the main parts of this document are:

  1. Executive Summary (for some reason, business types will not call this just "abstract" or "summary," which is what it is. Again, this should be the last thing to be written): Say in very few words what your product is, how it will be made and sold, and what kind of money it will generate in how much time. The idea is to convince a very busy executive not to throw your document to the wastebasket right away.
  2. The product: Describe to a layman what it is and why it is better than the competition. The reader will not believe you if you say there’s no competition: people must be using something else, if there’s truly a need: what is it? Talk about its unique features and what can be found today in the market and in patents.
  3. The market: Estimate the potential for sales —which will depend on the distribution channels. Back it up with realistic data. You may want to present several options and scenarios. What will be your marketing strategy?
  4. Costs: How much will it take to make your product in small quantities, in big quantities? Explain the basis of your calculation. Include all expenses: equipment, materials, labor, packaging, distribution, advertising, corporate expenses, real estate, taxes and fees.
  5. Revenues: How much do you expect to make? What is a reasonable selling price, for each distribution channel? Base this on your marketing plan or, even better, on user feedback on your prototype or description: how much would you pay for this?
  6. Seed money needed and Cash flow projection: readers will expect to see the numbers in 4 and 5 above in the form of a spreadsheet, listing time (months or quarters or years) horizontally and items vertically, like this:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter 2nd Quarter etc..

Costs

rental

equipment

materials

direct labor

Taxes, etc…

TOTAL

Revenues

sales

lic. fees

etc…

Seed money

TOTAL

BALANCE

Of course, the way to decide what seed funding is added and when is that the bank balance is never negative. Seed funding can be of several types. Equity comes free, but you are giving up partial ownership. Loans do not require you to do this, but then you have to pay them back with interest.