Selling or Licensing a Patent (Invention)
This is a long discussed issue. Many of my clients and friends have asked me about how to License or sell a patent to get bigger monitory gains. Everyone finds it little difficult to start manufacturing or assembling the product on their own and then selling it. As we all know the pains of manufacturing industry. Yes, it is easiest way of commercializing of the invention/patent. But the success rate is as low as 2-5% even below. In last few years I have seen many companies listing services like “commercialization of IP” promising inventors that they will help them to sell or license their patent application/patent. How many of such patent have licensed. ? It’s a big question. Most of the big companies do licensing and selling regularly, the problem I am trying to address is of independent individuals or small companies.
Most of the inventors/applicants tend to develop inventions based on their understanding and their perception, without considering any external factors which means they are providing a solution, which may not be relevant or may not be what a company is thinking to do in near future.
For Example: Many patents are being filed by MIT – Massachusetts Institute of Technology through their students. What they do with these number of patents. Are most of the patents licensed, sold. MIT helps its students to form a company around these patents which means inventors themselves manufacture and sell their patented products. This is the best tried and tested way. The vision with which the product is invented is best known by the inventor. He is the right person who can convince the advantages of his product and influence the market to buy the product. This vision mostly cannot be transferred and cannot be equally convincing for others. Does that mean patent licensing is a myth? Certainly not. We have also seen many inventors doing it successfully for more than one technology. If you have decided that, you don’t want to manufacture and sell the product that you intend to patent and want to license or sell it out. Then you need to do a little homework first, even before thinking about the invention.
Following the given steps may maximize your possibilities to sell or license your patent/technology:
1. Do a general research, which industry, more specifically which company (based on our research abilities) you want to license your invention;
2. Try to find out what kind of products company had launched, if you are able to find all the patent filed by the particular company, that would be great. Patent will give insight to the products that are about to be launched in near future;
3. Based on the most recent product either filed for patent or launcher, try to identify problem and technical solutions to the same. Even you can come-up with some other product, which the company may like.
4. Restrict your research area around the products of the company. If it is possible, you can meet the R&D head or concern person well in advance and ask him, if the solution or the product that you have thought of is of their interest or not. To be on a safer side, file a provisional specification before discussing this with the company, just to safe guard your interest.
5. Thereafter, start inventing your time in further research and finalize the product.
6. If you think your product development is complete and the final product is ready, draft a complete (non-provisional) specification and file it with respective office, if you think your product has international value, then filing PCT application before demonstrating the actual product would be recommended. Most of the inventors think good product can generate good value. True, you can get a good deal cracked. But when it comes to patent, your product is no more considered for valuation, but the patent document is considered. Stronger and wider the protection, more is the value. If the patent document is too narrow, the company or any other competitor may easily get away with your invention, even if you have patent. This not what any buyer would like. Therefore, get at least correct value, the patent document should be correctly drafted with wider scope. This will prevent competitors from design around your patent by doing minor modifications. Granted patent has more value than applied one. Now, you are ready to get your product licensed. Following these steps will maximize your chances of getting your product licensed or even sold at good value.
