Just by owning a patent the inventor cannot generate dough. After turning your idea into a commercial product, there are certain things that you should do to make money from it. A patent, as is, will not do that for you.
Here’s the hard truth. There are thousands of inventions that get patented every year. Do all of them make money? No. In fact, only a few of them generate profits.
In this article, we are going to learn about a few patent selling strategies for businesses.
- Offer non-core patents to others:
Businesses that have a huge patent portfolio can sell off some of their patents to other companies. The only caveat is that the ones it plans to sell should not be key to its business. One of the main reasons why companies often do this is because they have to pay maintenance fees on patents over their 20-year lifespan. Companies that have thousands of patents might find it a wise idea to sell off those that aren’t making them money or if it doesn’t align with their goals.
In one of its sales pitches to startups, IBM offered a variety of data analytics patents at $37,000 per patent. The technology giant holds more than 38,541 patents, and tops the list for companies that have the most number of patents in the US.
- Remove low-quality patents:
By removing low-quality patents, you will not only increase the value of your patent portfolio, you will also weed out patents that do not bring any value. How do you go about doing this? Companies should analyse their entire patent portfolio. Find out which are the patents that are of low-quality. Once you take a note of all the low-quality ones, decide which ones can be sold off without affecting your bottom line.
If the company can find a chunk of low-quality patents, then it is better to sell it off as you are only going to spend on its maintenance fee. It is even worse if the patent doesn’t even give your business any form of protection from competitors.
There are high chances that some patents which are related to old technologies have now become useless to the organization. They can be sold to startups that are still working in the same domain and might be able to find some uses with it.
- Outright patent sale:
When you sell a patent, you will get immediate payoff. But the question is at which stage is the patent being sold off. If the inventor has not built a commercially viable product yet, the sale might not fetch a lot of money. By selling it when there is no product yet, the inventor claims to give up the rights from future profits.
On the other hand, if the product has been in the market for a long time and is also popular amongst its customers, then it can be sold off at a substantial price. Deciding on when to sell the patent is the discretion of the inventor or the organization, based on the future goals and necessity for money.
- Licensing the rights:
Offering another entity the rights to make, use or sell your product is called licensing. It is one of the most profitable routes for most inventors or organizations that hold patents. The inventor not only retains the ownership of the patent, but also earns payments on each sale of the product made by the licensee.
The best part about licensing the rights is that you can grant it to more than one company. If you sell the licensing rights to a big company, it will also increase the perceived value of your patent. The only downside to licensing is that there are no guarantees of financial riches. Your royalty checks will stop if the sales stop. You will get anywhere between 5 and 25 percent in terms of royalties from the sale of each product.
Another headache with licensing is that you might have to face legal headaches. Ensure that you do due diligence before signing on someone as a licensee for your invention.
- Publicize your patent:
The good old method of using traditional marketing techniques still holds value in the patent industry. You can spread the word in trade publications and investors’ magazines to grab the attention of potential buyers. Patent offices will have a section which allows inventors to advertise their products for a fee.
- Patent marketplaces:
There are many marketplaces where you can sell off your patents by advertising on these platforms. While some of them are free, many of them do charge a fee. Marketplaces are online platforms where one can buy and sell patents.
- IP Marketplace, Inventorhaus Inc, PCTXS.com are some free platforms.
- IAM Market, Yet2.com, IPNexus.com, and IdeaConnection are some of the paid platforms.
- Find brokers:
In this field, you will find brokers who will spread the word about your invention to those who might be potentially interested. In lieu of this service, the broker gets paid in the form of royalties or a percentage of the sale. Before you hire the services of these brokers, ensure that they are reputed businesses.
- Sell patents that are in the right niche:
If you have a patent that is in a niche which is considered popular, it is the right time to sell it. When you hold a patent in an area where there is a lot of innovation happening or are making the right noises, you will find a lot of buyers as well. Hire the services of an IP firm like ResearchWire that will tell you the right value for your patent.
For example, computer systems that were based on biological models were the fastest growing technology patent category in 2021, it rose by at least 67%, according to TechRepublic.
How to share the value of your invention to potential buyers?
Communicating the value of your invention to interested parties is a pivotal part of the selling process. You need to have the right mix of communication, negotiation, sales and marketing skills. Here are a few things you can do to share the kind of value that the buyer will get by buying your patent.
- Represent the patent in a short, easy-to-understand manner that clearly helps the buyer understand the value of the invention
- Use visual, audio and video modules to explain the invention
While not everyone will have these skills, you can hire IP firms that know the right strategies that you can use to share how your invention can affect their business positively.
The patent selling strategies that we have mentioned in this article can be the game-changer for your business. Your selling strategy should be based on your business objectives, and not because something is in vogue. By having a solid patent strategy, viable product, and the right kind of business advice, you can get good returns from your invention.
If you are looking for end-to-end intellectual property services, ResearchWire is an IP firm that can provide you the best results. Our team of highly experienced IP experts and technologists allows us to gain a superior understanding of your industry with little effort. ResearchWire’s patent monetization services help inventors and businesses to get the right deal for their invention.