It’s a common misconception that filing a patent means you’ll end up making the big bucks. Unfortunately, somewhere between 2% and 10% of patent holders generate money off their patented work, which is pretty low. Given the expenses of patent filing and attorney fees, money put into a patentable project and other related costs, it’s likely that many people take a loss of patenting their inventions. But on the other hand, some patent holders are able to generate funds from their patented products, or by selling their patent altogether.
Selling Your Patent
If you’ve got a great invention that’s been patented, you may be on the road to generating income or making your innovation a household product. But sometimes, the work and expenses that go along with marketing and selling items can be too costly or overwhelming. In this case, you can consider selling your patent to an interested buyer — often times research and development companies or larger companies looking for new, similar products. An interested patent buyer may approach you, or you can consider approaching them with your patented product. Depending on the level of discovery or innovation, its possible to walk away with a large sum for your patent, but know that some buyers will be weary of patented products that haven’t been marketed or sold simply because they’re unsure of how successful the item will be. One perk to holding the patent to your design is that you have full control over how much you will sell it for, meaning that if a potential buyer is giving you an offer lower than you believe reasonable, you can walk away with no losses and without worry that they’ll copy your product for their own use (if they do, that’s patent infringement).
Licensing Your Patented Item
If your patent is just gathering dust, licensing your product can be a great way to recoup your losses or make a fortune. In some cases, you may not be willing to let go of a patent, but still want to make money from an interested buyer. You are within your legal rights to license use of your innovation to companies or individuals, which allows them to use or sell your product, all the while generating money for you (called royalties). Licensing is a great alternative to selling your patent because it can protect you from big losses if your product turns out to be a success. In some cases, patent owners who sell their ideas for a small amount regret this move when their invention becomes wildly popular, and they aren’t entitled to any additional funds. Licensing can guarantee that your income can grow based on how successful your idea is. And in situations where your patented product isn’t a hit, you haven’t taken a loss.
Check Your Eligibility
Being Cautious of Patent Scams
Finding a buyer or licenser for your patent can be hard work. You may want to consider creating a website, generating a list of potential companies or manufacturers to approach, or attending tradeshows to find a possible investor. Regardless of how you market your patent, be weary of patent scammers who look to purchase your hard work for minimal amounts or invention submission companies that offer marketing for your big ideas that often comes with a hefty price tag. Many patent scammers offer to research and advertise your patented product to investors in the hopes of helping you reap the rewards of savvy thinking, but instead fail to provide actual services. Before signing an agreement with any buyer, licenser or submission company, thoroughly research them by visiting your local attorney general’s website or visiting the Federal Trade Commission’s website.