How to Sell a Patent
Analyze the market for your invention., Advertise that your patent is for sale., Consider using an intermediary., Make contact with potential buyers., Negotiate the terms of your patent assignment., Draft your agreement., Execute your patent...
Step-by-Step Guide
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Step 1: Analyze the market for your invention.
Figure out how much investment you would have to make to sell your product to the public, and compare that to the profit you project the product will earn.
Selling your patent entirely to another company allows you to make a quick profit off of your idea, which you can use to recoup some of your research costs or even finance a new invention.You do want to keep in mind that when you assign your patent, you lose any right to future profits.
Although chances are you won't realize any profits anyway for awhile, you risk losing out if you assign your product and then it becomes a big hit.Honestly assess your own strengths and weaknesses.
If you have few business or marketing skills, it probably will be to your advantage to assign your patent to someone who is strong in those areas if you want to make any money off of your invention.Understand that manufacturing a product requires a lot of time, effort, and cash investment.
If you don't have the resources available to produce and distribute your product, you could end up in the red for quite some time. -
Step 2: Advertise that your patent is for sale.
You can use online marketplaces and trade shows to reach potential buyers for your product.
You also can find manufacturers or distributors by looking at products similar to yours in stores or in magazines.
Online databases such as the Thomas Register enable you to search for companies that manufacture or distribute products like yours that might have interest.
Buy space for a product announcement in trade magazines or the USPTO gazette, and advertise that your patent is available for sale., You may benefit from using a broker or web service to market your patent to potential buyers, especially if you have few connections in the industry.
Brokers market your invention to manufacturers, typically taking a percentage of royalties for their services once the patent is sold., Let interested parties know your asking price and the business projections you've made for the product.
Write targeted marketing letters to companies or representatives you think might be interested in your product and let them know you are interested in selling your patent. , Once you've decided which buyer you're going to go with, you can start negotiating the finer points of the agreement.
Although full assignments that transfer 100 percent of an ownership interest in a patent are common, you also can transfer only a portion of the ownership.
For example, if a patent is owned by two people, one of those owners can assign 100 percent of his ownership interest to someone else.
However, this ownership interest only represents 50 percent of the ownership interest in the patent as a whole.Assignments also can be partial.For example, you could assign a quarter of your interest to a buyer, leaving you with three-quarters interest.
You could sell those quarters to another buyer or keep them for yourself.
The interest sold is up to the patent owner. , Write up the initial terms as negotiated and circulate it back to the buyer for comment.
You might consider hiring a patent attorney to draft a full assignment of your patent to ensure the agreement meets all federal law requirements.
Additionally, some states have laws that require certain formalities be observed if you are selling or transferring patent rights.
All written documents relating to your patent should identify it by its number and the date the patent was issued, along with the name of the inventor and the official title of the invention.
This is required by federal law and your assignment could be invalid if this information isn't included.You can find sample patent assignment agreements available online that you can adapt to suit your needs., When you've come to a final agreement, meet with your buyer to sign the agreement before a notary. , Your assignment must be recorded with the USPTO for it to take full effect.
If you don't record an assignment within three months of its effective date, the patent can't be sold to anyone else.
There are two ways to record the assignment.
Recording the assignment with the USPTO provides legal public notice of the assignment.
Recording the assignment in the patent file allows the new owner to take action in any patent proceeding, such as filing a patent infringement suit.The USPTO requires all recorded assignment documents be written in English.
If your assignment is written in another language it must be accompanied by an English translation signed by the translator.The assignment must be submitted together with a required cover sheet and a $40 fee to Mail Stop Assignment Recording Services, Director of the United States Patent and Trademark Office, P.O.
Box 1450, Alexandria, VA 22313-1450.Don't send your originals to record with the USPTO, since they won't be returned.Make sure you fill out and include the official cover sheet required by the USPTO to accompany all assignment documents. -
Step 3: Consider using an intermediary.
-
Step 4: Make contact with potential buyers.
-
Step 5: Negotiate the terms of your patent assignment.
-
Step 6: Draft your agreement.
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Step 7: Execute your patent assignment in front of a notary public.
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Step 8: Record the assignment with the USPTO.
Detailed Guide
Figure out how much investment you would have to make to sell your product to the public, and compare that to the profit you project the product will earn.
Selling your patent entirely to another company allows you to make a quick profit off of your idea, which you can use to recoup some of your research costs or even finance a new invention.You do want to keep in mind that when you assign your patent, you lose any right to future profits.
Although chances are you won't realize any profits anyway for awhile, you risk losing out if you assign your product and then it becomes a big hit.Honestly assess your own strengths and weaknesses.
If you have few business or marketing skills, it probably will be to your advantage to assign your patent to someone who is strong in those areas if you want to make any money off of your invention.Understand that manufacturing a product requires a lot of time, effort, and cash investment.
If you don't have the resources available to produce and distribute your product, you could end up in the red for quite some time.
You can use online marketplaces and trade shows to reach potential buyers for your product.
You also can find manufacturers or distributors by looking at products similar to yours in stores or in magazines.
Online databases such as the Thomas Register enable you to search for companies that manufacture or distribute products like yours that might have interest.
Buy space for a product announcement in trade magazines or the USPTO gazette, and advertise that your patent is available for sale., You may benefit from using a broker or web service to market your patent to potential buyers, especially if you have few connections in the industry.
Brokers market your invention to manufacturers, typically taking a percentage of royalties for their services once the patent is sold., Let interested parties know your asking price and the business projections you've made for the product.
Write targeted marketing letters to companies or representatives you think might be interested in your product and let them know you are interested in selling your patent. , Once you've decided which buyer you're going to go with, you can start negotiating the finer points of the agreement.
Although full assignments that transfer 100 percent of an ownership interest in a patent are common, you also can transfer only a portion of the ownership.
For example, if a patent is owned by two people, one of those owners can assign 100 percent of his ownership interest to someone else.
However, this ownership interest only represents 50 percent of the ownership interest in the patent as a whole.Assignments also can be partial.For example, you could assign a quarter of your interest to a buyer, leaving you with three-quarters interest.
You could sell those quarters to another buyer or keep them for yourself.
The interest sold is up to the patent owner. , Write up the initial terms as negotiated and circulate it back to the buyer for comment.
You might consider hiring a patent attorney to draft a full assignment of your patent to ensure the agreement meets all federal law requirements.
Additionally, some states have laws that require certain formalities be observed if you are selling or transferring patent rights.
All written documents relating to your patent should identify it by its number and the date the patent was issued, along with the name of the inventor and the official title of the invention.
This is required by federal law and your assignment could be invalid if this information isn't included.You can find sample patent assignment agreements available online that you can adapt to suit your needs., When you've come to a final agreement, meet with your buyer to sign the agreement before a notary. , Your assignment must be recorded with the USPTO for it to take full effect.
If you don't record an assignment within three months of its effective date, the patent can't be sold to anyone else.
There are two ways to record the assignment.
Recording the assignment with the USPTO provides legal public notice of the assignment.
Recording the assignment in the patent file allows the new owner to take action in any patent proceeding, such as filing a patent infringement suit.The USPTO requires all recorded assignment documents be written in English.
If your assignment is written in another language it must be accompanied by an English translation signed by the translator.The assignment must be submitted together with a required cover sheet and a $40 fee to Mail Stop Assignment Recording Services, Director of the United States Patent and Trademark Office, P.O.
Box 1450, Alexandria, VA 22313-1450.Don't send your originals to record with the USPTO, since they won't be returned.Make sure you fill out and include the official cover sheet required by the USPTO to accompany all assignment documents.
About the Author
Matthew Webb
Writer and educator with a focus on practical cooking knowledge.
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