Should You Sell or License Your New Product or Idea
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Sell or License Your New Product or Idea
Selling your patent is a pretty weighted decision, one that shouldn’t be taken lightly. It’s your property. Your idea! The product of countless hours invested into perfecting the brilliance that pops into your head.
At the same token, it’s yours to legally do whatever you want to with. This include, selling your rights or offering a variety of licensing agreements to interested persons.
When Is It Ok to Sell a Patent?
There’s no hard and fast rule for pinpointing the perfect time to sell, but there are a few signs that may indicate you’re in the best position to profit off your idea. Theoretically speaking, you may decide to sell your patent if:
- You’re ready to move on to a new idea and give it 100% of your attention
- You’ve experienced enough with your current patent and are ready to cut ties with the venture
- You’re looking for quick cash and need an easy way to turn a profit
If your present situation fits into at least one of those categories, then you’re in the right place. Let’s go over the 4 main ways patent owners can transfer the rights to their inventions.
Method #1: Licensing Agreements
If you’re looking to retain ownership of your patent and turn a profit over the long-term, then licensing your idea may be the best route for you. With your permission, another company will pay for the right to create and market your idea as a part of their business.
To find qualified buyers, you can advertise the patent yourself; which would require the constructive of a specific marketing campaign and a considerable amount of legal leg work on the back end. Or, you can hire a qualified partner to guide you along the way.
The process is not straightforward, by any means. Licensing agreements require capital to get the deal off the ground. It also takes a decent investment of time and effort. Still, if you know how to navigate the licensing waters, it’s a deal that can benefit you for many years to come.
Why Is Licensing Such a Good Idea?
There is a laundry list of advantages tied to establishing a licensing agreement. For one, you’ll get the chance to see your invention being mass produced, enjoyed by people all over the world. Your idea will proudly wear the label of a well-known company and, with time, the value it brings to society will earn the invention its proper respect.
Don’t set your sights on major names like Wal-Mart and Target, unless you’re prepared to offer multiple patents in the same deal. Larger companies usually leave their licensing negotiations up to the marketing and PR teams. They’re backed with the capital and resources to perform a massive launch, usually handling any upsets and legal ramifications for the patent’s original owner.
If you fit these criteria, then get ready to collect. Major brands cut the royalty check and don’t expect you to do anything else.
Method #2: Selling the Patent
With a patent in hand, you have the exclusive right to market and sell your idea. You’ll need to know where to look for buyers and have a strong patent attorney by your side. More importantly, you must know how to determine your patent’s market value. The last thing you want to do is sell yourself short. Marketing your patent too high may also make the sales process next to impossible.
Method #3: Wait It Out
Inaction is always an option. If you chose to do nothing at all, you’d be amongst a pool of about 90% of all patent owners. According to the U.S. Patent & Trademark Office, almost all inventors never make a move on their ideas. They go through the trouble of getting a patent to protect the invention, but never capitalize on what they’ve created.
If you ask my opinion, I don’t think you’d want to fall into that third category. Getting a patent approved can be a tedious process. Why go through all the hard work for nothing?
Don’t be intimidated by all that’s required to get your licensing or sales agreement off the ground. When you’re partnered with a knowledgeable group of professionals, the “worry” gets removed from the equation. The only thing you have to do is decide which route works best for you and your situation.