Hacking an Industrial Machine for Profit?
July 6, 2011 2:13 AM   Subscribe

Someone has an idea to put to use an existing industrial machine that would expand its capabilities and reach other markets. At the moment there are 3 companies that manufacture this machine that he'd like to approach.

Essentially he wants to bring to the companies' attention an oversight on their part, that this particular machine has never been used in this certain way, to get them interested in changing their marketing schemata to include this information to potential buyers and users for a fee.

The companies are all located in Italy. The person is not.

Is what he wants to do practical? Is there any way to safeguard his idea? He would not be adding to the existing machine, only re-purposing it - would any laws be applicable in this case that would ensure the idea remained his?

And how would one approach a company with such a proposal off the bat?

Thanks for any help with this. Trying to help someone out here.
posted by watercarrier to Work & Money (6 answers total)
Is what he wants to do practical? Is there any way to safeguard his idea? He would not be adding to the existing machine, only re-purposing it - would any laws be applicable in this case that would ensure the idea remained his?

No. It is not practical.

Unless your friend has a patent (or has applied for a patent), disclosing the idea to any company in Europe without a signed agreement of confidentiality is essentially placing it into the public domain. Article 54(2) of the EPC covers "everything made available to the public by means of a written or oral description, or use, or in any other way, before the date of filing of the European patent application." An offer to sale without any written agreement of confidentiality is considered a public disclosure, but asking a potential buyer to sign a confidentiality agreement prior to disclosing your idea is very hard to do.

If your friend believe in his idea, if he thinks there is real commercial value it it, then he should consider filing an application for patent (in any country) before trying to flog it to industry.
posted by three blind mice at 2:49 AM on July 6, 2011

seconding the patent idea...its a PITA, but it's worth it...what he'd be doing is patenting the PROCESS...using machine A to do task B...
posted by sexyrobot at 3:20 AM on July 6, 2011

are the potential purchasers for this new use also located only in Italy, or also wherever this person is?

an idea with no validated implementation (in this case, sales leads in a new market) is just an idea. I'd think the way to monetize it would be to verify the proposed new market, then start selling into it through a distributorship. assuming this person has contacts in or an understanding of the new market, then there's enough advantage over the existing dealer channel who don't know that market to get established before anyone else. if they don't want to do sales, find an existing distributor and arrange for a cut or finders fee on every sale where they introduced the customer.

but if it's an existing product being sold without modification into a new market, I wouldn't think you can get IP protection to take a cut from anyone selling that product into this market.
posted by russm at 3:22 AM on July 6, 2011

three blind mice- I had suggested to him that he apply for a patent on a intellectual property basis - since he's not adding or detracting or modifying the machine in existence in any way, but this is in the realm of *idea* only.

Because this is such an iffy and gray area anyway - would the patent even be issued - and on what basis? Just as a sidenote - I did suggest he make cosmetic changes that would alter the design in someway - to be able to submit the patent. And would that be legal, acceptable - etc. are questions I'm still not sure of.

russam - the machine manufacturers are in Italy - potential buyers - worldwide. Are there precedents for selling an idea to a distributorship - cutting out the manufacturer - for any kind of decent remuneration?

Thanks for your replies in advance. Much obliged.
posted by watercarrier at 3:40 AM on July 6, 2011

The bottom line here, is the bottom line. The profit.

The machine manufacturer cares about: (1) increasing the quantity of machine sales; (2) increasing the price of each machine; (3) increasing the frequency of purchase of machines, or replacement parts, or consumables; (4) reducing the cost involved in the production of each machine; (5) reducing cost of after-sales repair, support etc; (6) reducing the expense of having a machine manufacturing business as such.

How can your friend help with each of these issues? If he has identified a completely new use for the machine, then in theory, he could increase the sales of the machines to people in that industry - presuming that the machine cost, speed of production, reliability, consumables use etc is at least comparable to and ideally better than whatever process those people currently use to make things. If the machine is capable of doing more things at comparable cost, it should sell better. (For example, a desktop printer that also folded paper would be inherently better than either a printer or a paper-folding machine, and thus could be sold to printer-users and also to paper folders ... however, there are now twice as many ways for the machine to go wrong.)

Price increase to some extent naturally follows increased sales. Frequency of purchase, or purchase of parts, is a bit tricky for machinery; if the user is buying another one, that means that either their business has done so well that they need an additional one, or that the machine has worn out and must be replaced. Consumable usage increase is probably a good thing for the machine manufacturer.

It's not very likely he can help with the other elements there, and it's possible that his new use may increase the machine manufacturer's after-sales support costs. ("So, how do I make it do that new thing again?")

The purchaser of the machine has some purpose for it, and cares about the exact same things as the manufacturer does, in the context of their own business. Say that they make widgets with the machine; they want more widgets sold, for more money, more often, etc etc. The value of the machine, to its purchaser, is entirely in its ability to achieve one or more of these goals.

What I would suggest here is that if your friend has a novel use for the machine, for example if he had developed a method of using microwave ovens to melt steel, then the economic benefit, the value he can add, is in selling those ovens to people who have a use for melted steel. He can make money there with very little personal outlay. The way he could do it, is approach the manufacturer, offer to generate sales for them, saying that he has a novel use for the machine that allows it to be applied to a different industry, and ask for a commission on the sales. Chances are good that the manufacturer will say sure, why not, go ahead and see what you can do. In this case, he doesn't have to reveal any of his secrets, except to the potential buyer. If he sells more than one machine, chances are good that the manufacturer will suddenly become extremely impressed with him, and want him to sell more.

If he can't add value somewhere, ie help someone else make money, then his process won't make money. If it's the kind of thing that's obvious in retrospect, he can't depend on its secrecy as an income stream; probably the best he can do with that, is approach someone who already uses the machine for some purpose, but doesn't use it all the time, and ask to rent machine time to do the thing he wants to do; then approach the buyers of that secondary product and offer to sell it to them. If the margin's good enough, he could train someone to do the work, or just pay the machine owner to do the work. If the margin's not good enough, well, that's probably why people aren't already doing whatever it is.
posted by aeschenkarnos at 3:45 AM on July 6, 2011 [3 favorites]

These replies are off the charts amazing. Thank you so much. This is incredible.
posted by watercarrier at 6:02 AM on July 6, 2011

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