Assigning the ownership of a patent is to a third party for the production and sale of your invention is called Patent Licensing. In other words, it is signing an agreement between two parties which the owner chooses to make and sell their product.
As the patent owner, you will receive royalties from sales of that product and keep ownership of your invention. You should use the service of a top-tier company that’s already familiar with your invention.
Before licensing your product, ensure that you research the licensee and other organizations such as the United Inventors Association, an American company.
Doing this will help you take the necessary steps in case your business relationship gets spoiled. Below you will find 5 Tips on Licensing Your Patent, especially if you’re new to the business.
Why should you license your patent?
The process of getting a licensee isn’t an easy feat. There must be instances where your invention is introduced to people so that they’re familiar with it; this will provide you with the licensing opportunities needed.
1. Showcasing your invention in the best way possible.
A company doesn’t have to be in the same field to select for a patent. It can be that the company sees the opportunities and profit that can arise from having such a patent. After all, an established company wouldn’t want to opt for a patent that won’t make a profit.
The best way to get a licensee is to present the patent so that people can’t resist it.
2. Hiring the best patent licensing company
Finding the best company to patent your invention is crucial, and so you should hire a patent brokerage with experience that will find you a company that best suits your needs. Note that you should only consider this step if you know your invention will capture its market.
Before considering licensing your patent, you should consider whether you’d be okay with not being included exclusively. After thinking about this, you should then create a listing with all potential companies then break down the list to the ones you feel will best suit your patent.
If you’re in the US, you can research The Thomas Register of American Manufacturers or North American Industry Classification to find some of these companies; this can help make your work more manageable.
3. market research
Doing market research is essential before licensing. Find companies who produce similar products as yours and find out if they’d be interested in investing in your invention. Considering larger companies is also a great move.
Almost all company’s interest is to get an IP that will protect their inventions so that no one else will manufacture and distribute the same products. SO, if your patent is something that is or will be prominent on the market, big companies will want a piece of the pie too.
4. Reviewing and advertising
Analyzing current publications of trade associations or trade shows, business directories, the patent database, and library databases will assist you with more knowledge. Also, you can list your patent on a marketplace for others to see. There are many ways you can advertise your patent as for sale, including finding brokers, market places, or contacting companies who are in your industry directly.
5. Finding intriguing companies
Your job isn’t over when you found a licensee. If you find other companies that manufacture similar products to yours, you should check if they have a license. Suppose it’s a case where they don’t have a license for the products; you will have to take action against them.
These cases are prevalent and see almost every company, both big and small, having court cases about this matter. These lawsuits can run into millions of dollars with the chance of the patent getting invalidated. The court weighs the pros and cons and makes a decision.
We’ve explained what a patent is and the steps you should take before licensing one, and how to find a potential company to manufacture your invention. We hope this is enough information for you to decide what’s best for your invention.
While this information will be beneficial to you, you should be aware that the chance of you getting a licensee depends almost entirely on the type of patent that you possess.
It doesn’t matter how long you marketed your invention or how much money you spent getting it made; if other companies don’t see where it’ll benefit them, they won’t want to be a part of it.