By Debby Winters
I recently met with a potential client who asked me the value of having patents or patent applications. Patents and patent applications offer tremendous value to a company because they are viewed as company assets, just like a building or real property. In fact, for most start-up companies and most technology companies, patents and patent applications are the most valuable assets the company owns, and sometimes the only assets you are trying to raise money for your company or license your idea to another company, then patents and patent applications are essential.
Here are some ways you can make money from your patents and patent applications:
1-License the rights to another party. You can divide these rights up many ways. For example by region (i.e.: North America vs. Europe), by time (i.e.: only license for the first 5 years of your patent’s life), or by scope (i.e.: rights to manufacture only), etc.
2-Sell the patent as an asset. This is done through an assignment agreement where you assign the rights to another party. It is a process that is similar to selling your car or your house.
3- Cross license the patent rights. If you have patents in a certain area and another company has patents covering a slightly different area, you may be able to cross license your rights to expand their product offerings and generate new sales.
4-Sell your product or service at a premium or higher price. A patent should exclude others from making or selling the same product or service therefore reducing competition and allowing you to charge more money.
5-Sue others who are copying your idea. If you find other people are copying your patent, you can sue them for monetary damages.
If you are starting a new, a solid patent covering your idea is essential. A good patent should protect your ideas and serve as an asset for your company. AND remember this asset can be sold or licensed.