Introduction
A patent grant is a major milestone in the invention process since it provides the inventor with many new options. To begin with, it gives the inventor a legal title to the creation, making it impossible for anyone else to profit from or steal the concept. Next, it gives the inventor monopoly rights over the invention.
Do you have a brilliant idea that you’ve patented, but don’t have the resources or expertise to bring it to market? Selling your patent could be the solution you’ve been looking for! Not only can it provide you with a substantial amount of money, but it also allows you to transfer ownership to someone who has the means to commercialize it. If you think your invention has enough potential then selling it might generate huge revenue instantly. Let’s have a detailed read on the process of selling a patent!
Patents: an overview
A patent for an invention is a lawfully granted right to a person, to prevent others from creating, using, or selling the invention without their permission for a specified time. The motive behind providing this exclusive right is to promote originality and help people benefit from their inventions.
Prior to launching your product to the market, it’s important to prioritize filing a patent. This is particularly evident in the strategies of major companies like Google, Facebook, and Apple, who have established a formidable IP portfolio, resulting in substantial returns on their investments. The rationale behind this approach is that:
- It gives exclusive rights and keeps the infringers at bay and prevents them from selling, making, or marketing the invention.
- It gives the inventor a chance to commercialise and obtain returns on his innovation by giving his patent an exclusive right and prevents others from selling or making the same product.
- The inventor can sell or license the rights to another enterprise and can earn royalty and revenue out of it.
Selling of patents
Selling a patent means transferring ownership of the exclusive rights of the invention or the intellectual property to another party in exchange for a sum of money or other agreed-upon consideration. The person or entity who buys the patent becomes the new owner and can use the patented invention for their own commercial purposes while the original patent holder relinquishes their rights to it. This can be a way for patent holders to monetize their inventions without having to invest in commercializing them themselves.
Why is selling a patent a good way to generate revenue?
An example of selling a patent would be a small business owner “X” who invented a new product and obtained a patent for it but lacks the resources or expertise to manufacture, market, and sell it themselves. In this case, the business owner could sell the patent to a larger company that has the resources to commercialize the invention. As the new owner of the IP, the larger company would then be able to manufacture and sell the product and potentially generate a significant return on its investment. The original patent holder, in turn, would receive compensation for selling the patent and may use the funds for other purposes.
By just selling the patent for the invented product he can easily make good money. This would allow him to cash in on his invention’s earnings without having to go through any cumbersome processes, allowing him to earn a profitable amount instantly.
Roadmap to sell patents:-
Step 1: Market evaluation
The first step in successfully selling a patent or IP portfolio is to determine the commercial value of the patented innovation. Identifying any existing product or business activity that violates the patent in any way is one of the greatest approaches for evaluating these two aspects.
Step 2: Adapt according to the consumers and investors
It’s always important to know your market and accordingly list your patent so that it appeals to your target audience. Additionally, research the potential investors in the market and approach and pitch the idea to them as they are often eager to invest in a product that has potential.
Step 3: Determine the fair market value
One of the most important steps in selling the patent is to evaluate and estimate its fair market value. Evaluation is an integral component of the process because it informs the inventor/seller of the value of their patent, helping them maintain the stance throughout negotiations. There are numerous techniques for achieving it, but the most prominent ones are detailed below.
1. Market-based Approach — This method evaluates transactional data for similar patents to estimate the patent’s value.
2. Cost-based Way – Another alternative method is determining the value of a patent by evaluating the overall cost of duplicating a similar patent.
3. Income-based Approach — In this method, the value of a patent or patent portfolio is determined by its capacity to generate income.
Step 4: Identification of prospective buyers
After determining the optimal price for your patent, it is time to locate potential purchasers. In this phase, we search for parties that may be interested in the patent’s underlying technology by researching companies in the relevant industry.
Alternatively, you can also identify the parties filing patents in the same domain. This would indicate that they have an interest in the particular technical subject and are likely to purchase the patent since the inclusion of such patents will strengthen their IP portfolio.
Step 5: Contacting identified prospects
Prepare for an elevator pitch! Creating an Attention-Grabbing Intro is the first step in selling or licensing your invention. Your introduction must have compelling reasons why you have obtained a patent for a product and what innovation you are bringing through this product. To finalise the identified prospects, it is essential to initiate contact with the prospects effectively.
Conclusion
In conclusion, selling a patent can be an excellent way to monetize your invention and transfer ownership to someone who has the resources to commercialize it. However, to successfully sell your patent, it’s important to follow the essential steps, such as assessing its value, finding potential buyers, negotiating the terms of the sale, and closing the deal. For inventors looking to sell their patents quickly and efficiently, working with a reputable IP law firm can be a valuable resource. Photon Legal is a team of experienced IP attorneys dedicated to protecting your intellectual property rights. To learn more about our services and how we can help you with your IP portfolio, visit our website. Don’t wait any longer to monetize your invention – take the first step today!
Also read: why does an investor love patents
