10 Tips for Commercializing Your Patent
When it comes to selling or licensing your patent, there are a number of ways to close the sale. Whether you directly approach a buyer, place ads or join listing websites, the methods open to you are virtually limitless. The key is to use the techniques that suit your own needs, strengths, and weaknesses. In this article, we’ll explore 10 different ways to sell or license a patent and you can evaluate which one(s) suit you best. The first five will focus on attracting a buyer, and the latter five on closing the deal.
1. Use a listing website
Thanks the Internet, various websites exist for buyers and sellers of patents to find each other. One such website is IdeaBuyer.com, where patent holders can list their patent and receive professional help in finding a buyer for it. Other websites do this as well, and the advantage is that everyone on the site is ostensibly there to accomplish this same task. This cuts down on the friction involved with other methods, where you are trying to take someone out of some other task and get them into the mindset of buying or licensing a patent.
2. Approach manufacturers directly
If you already have a manufacturer or a few manufacturers in mind, you can approach them directly about setting up a meeting. The key is to get in touch with their buyers or business development personnel, as these are the people with the scope and authority to make decisions like buying or licensing patents.
3. Set up a website
If your patent is complex or highly desirable, you might want to set up a website explaining it. Additionally, this website would offer a way for interested buyers or licensees to get a hold of you and learn more information. Having a website gives off an air of professionalism and seriousness that high-spending buyers will like to see. It helps defray the fact that they will be dealing with “just some guy.” You can combine this strategy with placing ads or using listing websites for maximum effectiveness.
4. Search the Thomas Register
If your patent is at all mechanical in nature, the Thomas Register is an excellent place to look. Not only does the Thomas Register list a lot of manufacturers and suppliers, they allow you to search for them based on the products they make. This makes it very easy to find people who create or sell things relevant to your patent, which is where you want to target your efforts. The link below will take you to the Thomas Register’s website. You can search by product/service, company name, brand name, and more.
5. Place ads
Another effective way of selling or licensing patents is to advertise for it in places your target buyers are likely to see. For example, a patent covering new industrial equipment could be advertised in a trade magazine or journal relating to that field. Ads can also be placed in general interest locations like Craigslist.com. The idea is to place it where people you want to reach are likely to see it. Think about the types of magazines or websites those people visit and make your ad placing decisions from there.
6. Use an exclusive license
When you license a patent, the first decision should be whether it will be an exclusive or non-exclusive license. In general, people looking to license your patent will prefer an exclusive license. This way, they will be the only ones allowed to profit from the patent, and have the right to enforce violations of it if anyone tries to “copycat” what they end up bringing to market. However, you may prefer a non-exclusive license.
7. Use a non-exclusive license
As the name suggests, a non-exclusive license grants someone rights to utilize the patent, but on the understanding that you may license those rights to others as well. For obvious reasons, potential licensees do not usually like this kind of licensing deal. It creates the threat of competition in the future that will make their lives harder. However, some licensees will agree to this, and it would be advantageous to try and work out such a deal.
8. Use performance obligations & milestones
One of the biggest fears you may have as a patent holder is “What do I do if the licensee fails to capitalize on the patent?” Not every licensing deal works out as hoped, and this is a reality you must in some way face. Therefore, you may want to write certain requirements into the contract so that you can revoke the license if this happens. These are called performance obligations, or milestones. Simply put, you can write sales targets, profit margin expectations, or just about anything else that both parties agree on into the contract. If the other party does not meet these obligations, you can revoke the patent.
9. Use royalty requirements
Another way to ensure that your financial needs are met is to simply use royalty requirements. Under this approach, you do not require them to capitalize on the patent in any specific way. Your only concern (and the only thing written into the contract) is that by X date, you want to start receiving Y dollars in royalties on a monthly, annual, or semi-annual basis. This might be worth looking into if you want to get paid, but don’t want to be hassled with figuring out what reasonable sales or profit targets are.
10. Approach buyers as a Product Developer
It seems like a silly semantic difference, but calling yourself a Product Developer as opposed to an inventor reassures people. It makes companies and individuals think that you are savvy, that you are in the business of creating and selling patents as a career and you know what you are doing. Filling this role will assist you whether your goal is to sell or license your patent.
No matter what your strengths are as a person or what your patent covers, some assortment of these 10 strategies will help you accomplish your goals!
Also, for more information on how to sell your patent, view our powerpoint tips below.
Selling Your Patent Power Point Presentation