If you own a patent and are considering selling or licensing it, whether or not to hire a professional patent broker is a decision you will have to make. Although most brokers work on a contingency fee, some will also charge an upfront fee to cover their costs if the patent does not get sold or licensed. You also should realize that not all patents get sold or licensed. Typical success rates are 25 to 35 percent. Good patent brokers can increase this success rate, based on their experience in the area and the contacts they have at patent buying companies.
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If you want to try to sell or license your patent by yourself, you will have to wait until the patent issues, because most companies will not review patent opportunities until there is the patent has actually been issued. You then can submit your patent through a company’s patent submission portal or try to find someone at the company whose job it is to review outside patent opportunities. Neither of these techniques can be guaranteed to provide results. Most good patent brokers earn their fees because they know these internal patent reviewing people personally or can find out easily through their contacts. A patent broker also brings knowledge of how to create a marketing package for a patent, how to make sure the right companies review the patent, how to price the patent, and how to negotiate a patent purchase or license contract.
Some items to consider:
Know the difference in licensing your patent and selling your patent rights
Selling your patent is like selling your car, typically a one-time fee and an assignment of title. A license is where you grant rights to use your patent in the production of a product, typically in exchange for some up-front fee and a running royalty. Today, a lot of companies would rather buy a patent and pay a reasonable sum rather than pay an ongoing royalty. This is due to several reasons such as, the company may or may not want to produce the product and only want the patent for offensive purposes. Another is that the resulting product may have several patent technologies and stacking a lot of royalties on top of each other would make the product uneconomical.
Selling a patent is often the quickest way to make money. Licensing, however, can make you more money if the royalty bearing product is wildly successful. Bu that is a big “if.”
One other way to monetize your patent is to allow another entity to enforce it against infringing companies. This can be very lucrative if it is successful, but again there are a lot of “ifs and pitfalls” in this monetization technique. A good patent broker can help you sort out the pros and cons of all these techniques; again earning their fee.
Rahul Bhardwaj is a project manager with online marketing agency Trignosoft Solutions. He especially enjoys learning and sharing thoughts about search engine, social media, and website development. His job is to create value for clients in their particular niches that eventually bring them links and business through digital mediums. In his spare time, he’s an avid traveler, aspiring photographer and amateur cricketer.