To sell a patent, the patent holder must determine the quality of the underlying invention outlined in the patent. Unlocking the Full Potential: Selling Patents through Expert Patent Valuations, 426 Industrial Avenue, Suite 150, Williston, VT 05495. We and our partners use cookies to Store and/or access information on a device. But there's no sense in spending time on options that don't align with your objectives or financial needs. Be professional with your marketing efforts. As you and your advisory team consider the best approach in selling your business, it's helpful to consider how deal structure can affect valuation. How do you know when your idea is just an idea, as opposed to an idea that you could patent and put to profitable use? Share it with your network! We use cookies to make wikiHow great. So many engineers believe they know what people want and try to build a revolutionary product in their basement without it ever seeing the light of day. This strategy entails making potential business partners aware of a joint venture opportunity, which in turn necessitates conversations regarding your patent. You can also search for companies that sell products similar to the one youve patented, or you can look for companies that might be interested in using your patented invention in their own product. Before posting your invention anywhere, check out the United Inventors Association website, which has news on unscrupulous invention schemes. Go to source. Don't send your originals to record with the USPTO, since they won't be returned. This is because your product has a proven track record of earning profits because of its popularity with consumers. Your invention has a better chance of taking off if you can license it to an established company that already has good brand recognition. Once your idea is patented, you should end your creative silo and solicit as much feedback as possible. Eliminating the production and startup costs if you were to manufacture the item yourself. Is my invention groundbreaking or just a fad? I graduated from Loyola Marymount Law School and obtained my Juris Doctorate in 2014. 1. Many inventors, especially newcomers, take too long to abandon ideas because they fear their first idea is the only idea they will ever have. Licensing the use of a patent is a great option for those who want to keep the ownership of their patent while still earning some money from their patented invention. Here is how to create a list of prospective investors or licensees (buyers of your product invention license rights). It also helps to have a prototype or at least a good drawing of the product. Before youve filed for a provisional patent, its important to maintain the novelty of your idea by avoiding disclosure, which is describing your invention in print or online. The same applies if you patented an improvement of an invention that makes an existing invention much better. Whether you're ready to retire or just move on to a new venture, here's a primer on how to sell your business. The third option an inventor has is to manufacture the patented invention on his own and proceed to market it and sell it to the public. A letter of intent (LOI . Jennifer Mueller is an in-house legal expert at wikiHow. By recording with the USPTO, you give legal public notice of the transaction. Find out more about how to see if someone has patented your idea. If your idea has already been patented, you will not necessarily need to approach the company in a reserved manner to protect your patent. Remember that inventors have infinite ideas. )Registered USPTO patent attorney, J.. But with a little business savvy and a touch of marketing sense, you can find the companies that are looking for innovation. If everything is agreeable to both parties, make sure to hire a notary to preside over the signing of any legal documents. This article was written by Jennifer Mueller, JD. Providing for yearly minimum payments, or requiring royalty percentages to escalate each year, is a contractual way to give the licensee incentive to market and distribute your product aggressively. 1. If you're ready to license or sell your patent, these tips and links can help you get started. Number of customers and relative size? Learn about the company you're interested in pitching your patent idea to by researching it in advance. Months of tinkering and experimenting have turned your idea into a viable product. If the invention solves a problem that no other invention has solved in the past, youre likely to make a ton of money on your invention. Time is your enemy - changes inside the business (departure of key employees) or outside (regulatory risks, industry shifts) can kill the deal, Work with your M&A attorney and CPA to discuss the tax implications of different deal structures and your possible tax liability (examples: asset vs stock purchase, Section 1202 gain exclusion, state tax implications). The consent submitted will only be used for data processing originating from this website. Once you've patented an invention, you've got two options if you want to make money off of your invention without producing and marketing the product yourself. As the conversation moves forward, the business development team may come to the conclusion that it would be beneficial for them to own the patent themselves and make a proposal to buy them instead. RPX delivers guaranteed value today for your patent assets with lower transaction costs for both buyers and sellers of patent assets. Licensing the right to make, use, or sell your product is usually the most profitable route for inventors. However, most companies will not sign this agreement as their R&D team may already be at work on a similar idea. U.S. government agency responsible for registering and protecting patents and trademarks The patent or patents at issue become a topic of discussion, and the prospective purchaser may decide that buying your portfolio outright is the easiest way to move forward with the transaction. We have brought unprecedented scale and efficiency to the patent ecosystem by working with both buyers and sellers in the market. What's My Patent Worth? Taking this step necessitates communicating with mergers and acquisitions (M&A) professionals and indicating to them that you are considering selling your business. Patents are intellectual property rights that allow inventors to stop others from making, using, and selling the patented invention for a limited time. Relative growth in gross sales and net income? The primary way inventors and you can profit from your patented invention is to sell your patent. Now what? How Are Patents Sold? Lawyers on UpCounsel average 14 years of legal experience, which includes representing companies such Google and Menlo Ventures. All rights are reserved. If you don't have the resources available to produce and distribute your product, you could end up in the red for quite some time. In this article, we will discuss five Trojan Horse strategies that can make the process of selling your patents simpler and possibly result in higher profits. Owners commonly sell their businesses for any of the. Finance your invention by soliciting partners to provide capital required to launch the product. In fact, culture and technology are evolving so rapidly that even if you could achieve a perfect version of your product it wouldnt perfectly fit your users needs and the markets demands for very long. If your company was producing significant cash flow, it'll be critical for you to assess whether the sale proceeds will allow you to maintain that lifestyle. Sell or license your invention idea or patent to a company or business. That said, you should hire an experienced patent attorney to assist you with drafting a patent license agreement so that you and the party that youre entering into an agreement with fully understand the obligations under the agreement. These documents should contain your name, the title of the invention, the patent number, and the date of patent issue. How to Put a Value on Your Patent 4. So, unleash your inner Greek strategist, and consider using a Trojan Horse strategy to sell your patents. [2] Follow up your meeting with a written thanks, a reiteration of the points you discussed, and plans to follow up with further discussion and negotiations. The amount of money you can earn from selling a patent also depends on the complexity of your invention, the more complex an invention, the more you will probably be able to earn from selling it. This is required by federal law and your assignment could be invalid if this information isn't included. Last Updated: May 19, 2021 Research source Trademarks, as defined by the USPTO, protect words, names, symbols, sounds, or colors that distinguish goods and services. Attorneys with you, every step of the way. A letter of intent (LOI) is a mostly non-binding document outlining the proposed terms of the deal. Instead, all of the information and content provided on this site should be used for general informational purposes only. Clean up QuickBooks, prepare financial statements, projections, and ready key metrics for your industry. Understand the real-world value of your business in the current market by working with a valuation expert, business broker, or investment banker. If you make and market your invention yourself, all the profits will go to your bank account. The website will then guide you through the rest of the provisional patent filing process. 5min read. You can sell your patent by following these step: How much you can sell a patent for depends on the invention described in your patent application. The USPTOrefers to the sale of a patent as an assignment. Any written documents related to your patent should also be given to the other party. Do you want to sell 100% of the company at closing and walk away with the cash? Plan your sales pitch by preparing a demonstration of your invention and practicing in front of other people. How well does management build a portfolio of patents and apply them? To summarize, selling your patents to a large company requires careful planning, strategic communication, and building relationships. Selling gives you the opportunity to diversify your investments and create an income stream for retirement. From here, you can formulate questions to find out your patent's worth: Once you've figured out the answers to these questions, you can put a dollar value on your patent. But with a little business savvy and a touch of marketing sense, you can find the companies that are looking for innovation. Here is your complete guide! It grants you ownership to an invention and excludes others from using it.4 min read. You can find sample patent assignment agreements available online that you can adapt to suit your needs. We use cookies to optimize our website and our service. If the product fizzles in the marketplace, so will your royalty checks. Write targeted marketing letters to companies or representatives you think might be interested in your product and let them know you are interested in selling your patent. Selling Patents Made Easy We provide patent sellers with a fair market price and fast cash payments - usually within 90 days of receiving your offer to sell. This information is readily available online at the United States Patent and Trademark Office (USPTO) website. However, keep in mind that patenting an invention is a costly and time-consuming process, so only patent an invention if you know that you can profit from it. If a patent hasn't been proven to help sales, most companies aren't willing to spend much on a conceptual idea, even if it's useful to consumers. After finding a buyer, it's time to draft the assignment agreement. So, if you do not want to miss out on the potential profits of your invention, ask an experienced patent attorney about licensing your patent instead of selling it. Is it an innovative idea that will revolutionize an industry? So, if you or your company has a valuable invention, you should patent it to keep others from using or selling your invention without your express permission. You do want to keep in mind that when you assign your patent, you lose any right to future profits. Consider hiring an intellectual property to assist you with drafting your agreement. 5. Stage 1 : commercial potential and marketing material. Before using the services of any broker or company that offers to market your invention, check them out through the Better Business Bureau and United Inventors Association. Take the next step to gain more information about how to sell your patent. The content is Recording this event is crucial to the sale, as if you don't record the assignment within three months of the effective date, you lose the right to sell it to any other party, even if you still have an interest or partial ownership of the patent. This article has been viewed 63,043 times. If you're ready to license or sell your patent, these tips and links can help you get started. If you have a legal or patent-related issue that needs to be addressed, you should contact an experienced and licensed patent attorney from your own jurisdiction. Jennifer Mueller is an in-house legal expert at wikiHow. Selling too early also may also prevent the inventor from making larger profits in the future, as he or she gives up the rights to such ventures. Most inventors make lousy business folk. Then, once a buyer agrees to your price, negotiate and draft an agreement. Work with your business advisory team to make sure you're not disclosing more than you should early in the process. Recording the assignment with the USPTO provides legal public notice of the assignment. Although chances are you won't realize any profits anyway for awhile, you risk losing out if you assign your product and then it becomes a big hit. Include sketches, designs and descriptions that you used during the patent application process, especially if you have a highly complex patent. How to sell your patent Finding a way profit from your patent can be tricky if you're not sure how to do it. Your goal in your presentation should be to demonstrate how your patent will be financially beneficial to the company youre attempting to sell it to, and how it differs from competing products. This portion of the site is for informational purposes only. President, Darrow Wealth Management in Boston, MA, These Democrats Just Joined Republicans To Repeal Student Loan Forgiveness, This Week In Credit Card News: A No-Interest Credit Card; How ChatGPT Could Be Used In The Card Industry, Why Kids Should Do Chores At Home (And How To Get Started), Student Loan Relief And The Debt Ceiling Bill: 5 Key Takeaways For Borrowers, Owe The IRS Money? Selling the rights to a patent has two main benefits: However, it also has some drawbacks. By using PatentRebel.com, you recognize there is NO attorney/client relationship between you and Patent Rebel or any of its representatives. This is particularly true when two or more inventors are on the patent application. Contact Us Now! You may record the assignment in two ways. You must also submit an official cover sheet that's required by the USPTO. The first step is to get your business financials in order. If you need help with selling a patent, you can post your legal need on UpCounsel's marketplace. Some industry giants may be able to iterate at rapid speed, because they have such large teams that are constantly prototyping. Selling a patent is usually not feasible unless and until you have actually built a prototype. Licensing isn't a full sale, even if the license is exclusive, because you are still the record owner of the patent. ", https://www.legalzoom.com/articles/selling-your-patent-what-you-need-to-know, http://www.uspto.gov/web/offices/pac/mpep/mpep-0300.pdf, http://www.lambertinvent.com/licensing.php, http://www.uspto.gov/web/offices/pac/mpep/s301.html, https://www.legalzoom.com/download/pdf/patent-assignment.pdf, http://www.nolo.com/legal-encyclopedia/sample-patent-assignments.html, http://contracts.onecle.com/type/224.shtml. Thousands of inventions are patented each year, but only a minuscule amount actually generate substantial, if any, profits. A key part of deciding what to do with the money after the sale of your business is understanding your risks and options. Documents like annual reports and earning statements can be valuable in giving you information about the company's net worth and the amount of money it invests in research, development and patent procurement. Selling a business is time-consuming for business owners, even when they have an advisory team. When Does the Right to Enforce Patent Protection Begin. Make sure you include provisions for advance payments, royalty percentages, and infringement issues. But what if the product does becomes a hit? The Patent Trade Office publishes a gazette where inventors can advertise their products for around $25. Having spent several years and hundreds of thousands of dollars working on an invention I eventually had to shut down, I know how painful this process can be. Even if you don't need to make any substantive changes, messy or incomplete books can kill the deal before it even gets started. Corporations, LLCs, and other business entities need a registered agent. Assignment agreements are permanent and cannot be undone. Prepare formal letters and nice looking brochures to showcase your invention. Lawyers on UpCounsel come from law schools such as Harvard and Yale Law and average 14 years of legal experience, including work with or for companies like Google, Menlo Ventures, and Airbnb. Do you want to hear about how to make money selling patents? An assignment agreement is basically a contract where the assignor can transfer any rights he has in a patented invention to a third party. Three steps to turn your product idea into money, How to patent an idea and become an inventor, Before applying for a patent: 3 questions to ask yourself. For information from our Legal reviewer on how to license your patent rights, scroll down! In a similar manner, selling your patents may necessitate the use of a circuitous strategy, in which you initially approach potential purchasers with a different intention and then, at a later time, reveal that purchasing your patents is the optimal course of action. Monetizing a patent can often take substantial time and resources. Frequent citations of prior artwork are an indicator that this a good patent. However, those profits may be eaten up by legal and accounting fees, business start up costs, and headache medicine. Your project should be recorded with the USPTO for it to take full effect. She received her JD from Indiana University Maurer School of Law in 2006. A provisional patent application allows you to claim "patent pending" status for the invention. For example, if a patent is owned by two people, one of those owners can assign 100 percent of his ownership interest to someone else. For more information on the worth of patents, check out the section titled how much can I sell my patent for above. At the same time, you should thoroughly research whether someone else has already executed your idea through the United States Patent and Trademark Office. Patent company provides a patent consultant to patent your idea and market your invention. There are lists of inventors who have paid thousands of dollars to these companies and have nothing to show for it but an empty wallet and broken dreams. 1. The patent buyer usually won't want to spend a lot for an unproven product that might not generate a big profits. Here are a few career-boosting concepts new inventors can learn from my mistakes, so they dont have to learn the hard way. Focused advertising and marketing letters can be sent to corporations or representatives that may be interested in your product. Why? But first, you will need to find them! You can also assign a percentage of your ownership to the buyer, especially if he or she wants to work with you to manufacture the item. Licensing agreements can be complicated and you may forget to cover an important term that results in a significant loss to you. Do you have plans for a major purchase? Once completed, send the assignment, cover sheets, and all pertinent documents to: Make sure to only send copies and not the originals, as any originals sent will not be returned. RPX is one of the largest, most active patent buyers in the patent market and has spent over $4 billion to date to defensively acquire more than 195,000 patent assets and rights. Documents , Agreements in Patent commercialization. Brokers will market your invention to producers, sometimes taking a share of royalties for their services as soon as the patent is utilized. Are you willing to keep working for 3-5 years after selling all or a portion of the business? Your invention stands a better chance of generating big bucks if licensed through a well-known company that already has the consumers' confidence. For companies like Apple, Facebook, Google, and Microsoft, 70 percent to 80 percent of an organization's market capitalization comes from having certain intangible possessions, which embody nonphysical properties, such aspatents, logos, copyrights, and different enterprise information and know-how. Selling to RPX guarantees you will receive 100% of the value of your patent. How to Sell Your Patent to a Company If there is ever a need, it is important to know how to sell your patent to a company. A patent is a vital doc that grants possession to an invention. A patent is a crucial legal document and affirmation that grants possession ofan invention. It may also be worth considering an independent audit of your financials to help give buyers confidence. This includes filing a patent infringement suit. To feel confident that it isnt too early to retire, your plan should include a Monte Carlo simulation to account for market volatility. They do this by considering whether or not the patent is properly constructed and by attempt to determine a way to extract worth from the patent. But what steps should you take once you've made the decision to sell that patent? Whenever youre trying to determine how to use, and thus value a patent, it's important to describe prior artwork, which describes how your concept isnovel by referencing all previous related patents and literature and methods that are completely different from yours. By investigating existing patents similar to your invention, you may uncover ways to refine and improve your own technology before applying for a patent. Apatent lawyercan be helpful for drafting a full project related to your patent to make sure the settlement meets all typical regulations and legal matters. Login admin@ownmyinvention.com +1 888 344 6836 For more information about how much can I sell my patent for, contact a patent attorney or patent agent to assist you with evaluating the value of your patented invention or product. At the final settlement meeting, both you and the purchaser sign all documents in front of a notary. Prototyping and asking people for feedback is often the only way to hone your idea into a marketable product that generates excitement and attracts the attention of investors. Conduct online research and identify legitimate websites that can help you sell your invention. Smaller teams might want to take longer. Call the company to find out who is responsible for making decisions about purchasing new products and patent rights. Promoting your patent directly to a different firm allows you to quickly gain revenue from your concept. Was this document helpful? Selling your patent may be the right thing to do because having a patent on an invention does not earn the inventor any money. Patent assignmentscan be partial. Now, if you have a patented product or invention that is already for sale, you might be able to sell your patent at a higher price if your product sells well in stores. Your job becomes significantly easier if your invention solves a problem that no other invention has been able to solve. If there is ever a need, it is important to know how to sell your patent to a company. Selling your patent entirely to another company allows you to make a quick profit off of your idea, which you can use to recoup some of your research costs or even finance a new invention. Fill the form to get the PDF delivered in your inbox: Here is the table of content, so if you are interested in a particular marketplace, you can land on it directly. 3. And thats okay. The amount given during each assignment is entirely up to the patent holder. Jennifer reviews, fact-checks, and evaluates wikiHow's legal content to ensure thoroughness and accuracy. This article has been viewed 63,043 times. There is no worse feeling for an inventor when he finds out that he sold his patent for a small amount, such as $15,000, and later finds out that the party that purchased his patent is raking in millions of dollars of profits from the inventors patents. Experts can guide you and add a layer of cover, ensuring that you maintain a strategic advantage. Find out how you file a patent application, whether you need a lawyer or can do it yourself, and what it means to have a patent pending. Alternatively, sign on with a broker to market your patent, but be prepared to pay them a percentage of your royalties for their work. Include a paragraph or two in your letter that explains how your background or education helped. Find out how to get started researching your patent, drafting the application, and what to do while you wait for an official response. This may be a development director, purchasing professional or marketing department head. There's a lot of complexity to consider: structure of the deal, ways to retain key employees, tax planning, cash flow planning post-close, etc., so it's really important to work with a team of specialists that can help you navigate your options. 2023 ipCapitalGroup, Inc. All Rights Reserved. It can be hard to give up on a patent that ultimately isnt marketable. Once a patent holder assigns his rights to a third party, he can no longer use, make, sell, or import the patented invention. Some languish so long that their patent expires. You may or may not discuss finances during this initial meeting, but be prepared to talk about numbers regardless. When the Greek soldiers emerged once the horse was inside the city walls, they caught the city off guard and took it by surprise. Before youve filed for a provisional patent, its important to maintain the novelty of your idea by avoiding disclosure, which is describing your invention in print or online. The assignment must be submitted together with a required cover sheet and a $40 fee to Mail Stop Assignment Recording Services, Director of the United States Patent and Trademark Office, P.O. Develop a sales presentation that outlines the merit of your patent as. If you have the right patent, many companies will vie for the rights, providing a quick payoff and eliminating startup costs. You must do the research, market analysis, and testing to understand your market.
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