Innovators agree that to forestall the compromise of your idea’s novelty before it is patented, you must avoid sharing it with people or on public domains. This is valuable counsel. A patent is a vital document that accords ownership of an innovation or idea to the innovator.
This legal document is the key that grants the innovator access to many opportunities that can come from the use of the innovation. Also, it protects the idea from infringement or being stolen.
After going through the rigorous process of obtaining a patent, many innovators are at loss on what to do next. How do you move from hoarding your ideas and creations to introducing them to their target market?
The popular choice is to sell your patent but that is not the only thing that can be done.
Patent attorneys located in Columbus, for instance, have the necessary network and expertise to help innovators handle the events following obtaining their patent.
But more entrepreneurial innovators decide to pursue the path of building their business with the patent. In this article, you will find a guide on things to consider before you sell your patent.
1. Licensing rights of usage
One of the things you can consider before you outrightly sell your patent is licensing the right to use your innovation. As a patent holder, it is within your rights to release or grant interested party access to your patent.
This access is not tantamount to selling your patent. You will still be the owner of the patent. But this access will only grant this third party called the licensee, the authority to utilize your innovation in their own processes after paying you a fixed amount of money.
Depending on the contract terms of these licensing usage rights, the licensee may be allowed to use your patent for a limited time frame, in certain products or specific regions.
Alternatively, you may choose to receive royalty payments for your patent which the licensee may decide to use in a product.
However, if you have signed a licensing agreement, it could stop companies or buyers from receiving royalties when they buy your patent. Or it could stop them from buying it since it reduces your patent’s value.
2. Evaluate the value of your patent
A recurring concern among patent holders is how much their patents can sell for. It can be difficult to determine this value without conducting appropriate research before filing a patent.
Hence, as an innovator that wants to sell your patent, you must approach your selling process systematically by following the steps outlined below:
• Develop a prototype
First, to assess the value or practicability of your patent, you can develop its prototype to test how easy it is to use. This is necessary if you want to convince the relevant industry investors or buyers of the practicability of your patent. Without a prototype, your patent is just an idea on paper.
• The uniqueness of the technology
To further gauge the value of your patent, you must note if your patent can revolutionize an industry or just improve its processes. A good way to make this finding is to survey the market and see if there are key players already offering a similar product.
Competition is good but is their coverage widespread enough to hamper the growth of your patent-incorporated product? This evaluation process will also let you know if there is a thriving market for your patent.
As an innovator, you may find a use for your patent but do others see that need as well?
Is there a demand for products built around your patent? This would be an indicator that there is a budding market for your patent. The result of these assessments will help you gauge the market size.
• Reproducibility and patent life
Exclusive rights to a patent expire after 20 years. Many more expire before that. The life of a patent remaining when the patent is put up for sale in the market is critical to its value determination.
This is so because the time left is what any potential buyer will have to utilize the patent before others can start reproducing it without paying royalties or going into a licensure agreement.
Additionally, the ease of incorporating the patent into a product can impact its value. A patent that takes time to be built into a product will cost a lot of resources.
For buyers, this can limit their commercial efforts and market penetration. So, you must take measures to see that your patent (especially the prototype you developed) can be easily reproduced.
3. Map out relevant industries and potential buyers
The value of some patents is transferable. This means they can be applied across diverse industries. You can note these industries and proceed to carry out more research to identify the buyers there. Some buyers may be willing to purchase your patent but they may not be the right clients.
One of the results from your market research should be who the competitors for your patent are. In the actual sense of it, these market players may not be your direct competitors but their products infringed on your patent in one way or another. You can map these competitors as your potential buyers.
All solutions start with thinking about a problem. The idea that is patented is formed to provide solutions. Having gotten the patent, you must now seek out those who face the problem you sought to solve. These are another category of buyers for your patent.
Additionally, some companies buy patents. They buy them either to scale up their business and gain a competitive advantage or to grow their portfolio for patents. You can select them as potential buyers of your patent.
4. Pitch your patent and finalize the deal
In trying to get buyers to buy your patent, you must prepare a pitch to convince them of the need for your patent and its price. Your pitch should include the use of your patent’s prototype, the solution it offers, and the findings of your market survey i.e. market size, and the projected future value.
Reach out to your potential buyers through whatever channel that’s accessible and allowed – emails, meetings, presentations, etc. Then, pitch your patent and begin negotiations after acceptance of the patent.
In the process of selling your patent, it is crucial to note that a non-disclosure agreement must be prepared before finalizing any deal. This will help secure your patent in safe quarters, outside public spaces.