You have a brilliant idea for a product or service and it’s patented, congratulations! But now what? How do you make money from that idea? Numerous things can stop us from putting patented ideas into production, no matter how big our operation is. You may determine that it's too expensive for you to produce, or that you want to concentrate your efforts in another area of development. One way to make money from an underutilized patent is to sell or license your patent to a company.
When you want to sell your patent, there are two ways it could happen. You can attempt to sell your patent to a company or a company could be interested in purchasing the patent from you. Both instances involve similar processes, but here is how they work similarly and differently.
Selling Your Patent to a Company
You have a patent and you want to start making money from it, but you don’t want to take on the responsibility that having a patent idea commercialized would entail: running a business, overseeing the manufacturing of the product, marketing the product, etc. In this case, you mainly want to be the idea man and then ideally have a company take over the rest, if the product is successful.
This process involves first researching companies and manufacturers that may potentially want to purchase your patent. Knowing your product market can help you investigate which companies would possibly be open to patent pitches. The next step is then pitching the company about why they would want to purchase your patent and then develop and market the product to consumers.
If this is successful, you then need to transfer the patent ownership to the company. This process is called assignment and essentially means that you are transferring all legal rights from your patent over to them. It is highly advised that you get a lawyer if you don’t already have one to help facilitate this process, as it will be complex and have a lot of documentation that you want to record, rather than just relying on handshake agreements.
Once this process is complete, you will need to register the assignment with the USPTO, so that the office can recognize the transfer of ownership legally. From then on, the company has sole ownership of your patent and you receive a lump sum from the sale of your patent (this is most common.)
What If a Company Wants to Purchase My Patent?
If a company comes to you looking to purchase your patent, the most important thing to do is research. Getting a lawyer is also crucial in order to protect yourself and ensure that the company and their intentions are reliable. You want to be wary of scams, especially since you’ve gotten this far in the process of having your patent approved. This patent is your brainchild, so you want to make sure it gets into the right hands that can take it to success.
Generally, the process will still be the same as if you contacted a company. The patent will still need to go through the assignment process and need to be registered with the USPTO.
What If I Don’t Want to Give Away Complete Ownership? Licensing Your Patent
One other route you could take is licensing your patent. With this option, you still own the patent, but the company can use it and make a profit from it. In this circumstance, you often receive royalties from the sale of the product that the patent came from. This option can be viable for those inventors who want to maintain ownership and potentially want to make money from their product, but who don’t want to handle the knitty gritty details of producing and marketing it. This can potentially be lucrative depending on the product and its value or need in the market.
Global Patent Solutions does much more than patent search. Our state of the art and freedom to operate searches can help you make knowledgable projections about the profitability of your patent before you buy or sell. We can even enable sales, matching operating companies with patent holders to provide mutually beneficial arrangements. Contact us today to get started.