Sell A Patent - How to
I’ll just sell the patent!” Ever find yourself saying this as a kind of all-purpose declaration of how all your hard work will eventually pay off? The truth is that while selling a patent can be very lucrative, certain steps need to be followed. In this article, we will offer 10 tips to make your patent selling efforts more effective.
1) Target your efforts
Of all the tips on this list, this is the one you should circle, underline, write on your forehead and read to yourself when you look in the mirror each morning. You cannot sell a patent to someone who does not want it. While this seems obvious enough, many inventors (especially those with Inventor Baby Syndrome) cannot fathom why totally unrelated companies are not interested in buying their patent. To ensure that this doesn’t happen to you, do some research at the Thomas Register. There, you can search for manufacturers and suppliers by the field they are in. This will provide you with a nice, long list of targeted, potential buyers.
2) Do not be greedy
Remember the old saying: pigs get fat, but hogs get slaughtered. The idea is to not be too greedy in setting or insisting upon a price for your patent. This sounds easy to say in theory, but difficult to do in practice. The key, however, is to remember an all-important truth about patents. Many of them produce no income for their owners. In fact, some patents even expire while the owner fails to capitalize upon them! This does not mean you should be desperate to sell, but it does mean that you should not be turning away reasonable offers. Do not try to squeeze every last drop out of the buyer.
3) Make your patent look appealing
Why should someone want to buy your patent? You had better ask yourself this question, because anyone thinking about buying it is going to be wondering the same thing. Is there a large market waiting to be capitalized on? Does your patent position the owner to jump in before competition gets fierce? Is your asking price paltry compared to the expected profits? These are the types of things you will want to emphasize in your selling efforts. Focus on benefits to the buyer. See step 6 for more on this crucial point.
4) Get legal advice before the sale
Selling a patent is not like holding a garage sale. There are complex laws governing how and under what terms a patent may be sold. Therefore, you should not attempt to sell yours without getting competent legal advice. A patent attorney, while expensive, can ensure that your sale takes place in compliance with the law, and in such a way where the other party cannot use “weasel clauses” to back out later on. Consider this a must in your patent selling efforts.
5) Create a powerful presentation
The ins and outs of a powerful patent presentation are beyond the scope of this article, but suffice it to say that you should have one. Fortunately, IdeaBuyer has a comprehensive how-to article on this very subject! See our article “10 Tips for Creating a Powerful Presentation” for practical guidance and key considerations to keep in mind.
6) Decide whether selling is truly what you want to do
Some patent holders are unaware that they have other options besides selling. The other main option is to license your patent, or grant someone rights to it without actually turning over the patent itself. The advantage of this approach is that you can capitalize on the patent in the form of royalties while still owning it, and being able to revoke it if certain conditions are not met. Of course, selling may still be the best option, but you should make sure this is the case before you sell.
7) Run the numbers before setting an asking price
While you don’t want to be greedy (as per tip number 2), you also want to make sure the price you get is worth your while. This becomes important if you are already capitalizing on your patent in some way, such as by selling a product. You want to make sure you make enough from selling your patent to replace that income and then some. Otherwise, why not just keep the patent for yourself? Tally up the profits you’ve been making and try to get a price at least 10x the yearly amount that you make. This is the standard calculation in corporate acquisitions and a good starting point for patents you are already making money from.
8) Bring the underlying idea to market first
Most patent holders want to sell precisely to avoid this task, but think about it from another angle. If you are a potential buyer, which are you more likely to buy: a totally unproven patent that just sounds nice, or a patent which has already been capitalized on, and demonstrated its success? If you are at all entrepreneurial, and you feel you are up to the task, you should definitely consider bringing the patent to market. This will make the task of selling it far easier, and allow you to claim the residual income that result after some initial hard work.
9) List your patent on a patent listing website
Thanks to the Internet, patent holders have a whole new medium for selling their intellectual property. One of the best ways is to use listing websites that bring buyers and sellers together and help them complete sales in a safe, legal way. IdeaBuyer.com, for example, allows patent holders to list their patent and help ensure that only relevant potential buyers will see it. They will also receive assistance in negotiating with buyers and closing the sale in the proper way. No matter which site you use, patent listing websites are worth looking into.
10) Attend trade shows
One great place to find patent buyers is at trade shows. If you have a technology or software patent, for instance, it may be worth your while to set up a booth at a tech expo where relevant professionals and corporations can see what your patent is all about. It is a more proactive approach than placing ads and can sometimes be highly effective in getting the patent sold.
Chances are, some of these tips will fit your style, strengths, and weaknesses more than others. Just pick the ones that suit you best and you should be well on your way!
