Who hasn’t dreamed of coming up with a million-dollar idea and becoming rich overnight? While this sounds improbable, it is not entirely impossible. Well, not overnight, but you get the idea. If you are an investor, you will be delighted to hear that you don’t necessarily have to be the one to actually execute your idea to make money off it. This is where selling your patent comes into the picture.
While the transaction may seem quite simple in theory, the reality is that most inventors aren’t appropriately informed about the ins and outs of selling a patent and often end up empty-handed. To avoid this scenario, here is what you need to know about profiting off your original idea.
What is a patent?
A patent is an exclusive intellectual property right that is granted for inventions (products and processes alike) that are novel in some way. What this means is that your original idea should provide a new, innovative way of doing something.
Naturally, the first step to profiting off your idea is going through the patenting process. This process starts with contacting professionals who will determine whether your idea fulfills the criterion of being new. If this is confirmed, you may file an application. Before patenting your idea, you are highly advised not to disclose information about it, online or otherwise.
How much does a patent cost?
Determining how much your idea is worth is everything but easy. Not only the quality of your invention, but the steps you take to ensure it gets exposure are also vital. Should you manage to garner the attention of a corporation by your own efforts, you can expect tens of thousands for your patent or even much more.
On the other hand, if you want to speed the process up and decide to present your patent directly to corporations, you may get to profit faster, but you cannot realistically expect to reap a fortune. Depending on the value of your idea, you can expect a few hundred or a few thousand dollars—which is not a great payoff considering how much the buyer will, possibly, profit off your idea.
Before you sell your patent
As you can see, determining the worth of your patent is more complex than it may seem at first glance. This is one of the reasons why doing extensive research prior to starting this process is paramount. However, there are a few additional steps you should take before selling your patent that is going to boost your chances at a favorable transaction.
Firstly, you cannot expect corporations to trust you blindly; you need proof that your idea is worth it. Gather as much data as you can to back your idea up. Scientific data is paramount in showing investors that your invention is going to produce the promised results. In case a validity search is issued, look for a professional knowledgeable in local law. For instance, if you’re from Australia, an experienced patent attorney from Sydney will be able to advise you.
Secondly, another highly advisable step that is going to help you with selling your patent is gathering as much valid feedback as you can. While you had to be completely silent prior to the patenting of your idea, now it’s time for being vocal. This will not only help you further back up your idea and fine-tune the details, but, more importantly, it will give you some outside perspective on the actual utility of your idea. It’s easy to get lost in your own world, especially when you’ve been working on an invention for a long time. Asking for feedback may be intimidating but it’s what’s going to take you back to reality and boost your chances at making it.
The third thing you should have on your to-do list prior to selling your patent is creating a prototype for your product or service. Naturally, this helps interested parties better imagine what your idea is about. Instead of having to solely rely on words, there will be something more tangible to get them interested.
Finally, this step is also where you will need to utilize your businessperson-like qualities—even if you don’t have them. Marketing your idea is what’s going to make a big difference in selling it. You have several options to boost your exposure.
- Prepare a brochure – A well-designed brochure will provide all the vital information about your invention in a concise way.
- Advertise in relevant trade publications – Publishing an advertisement in a publication is not as expensive as you might think. This is thus a great way to directly reach professionals in your field of interest.
- Attend trade shows – Meeting people in person always beats all the other alternatives. Showcase your idea at trade shows and create meaningful connections with investors.
- Sign up for a patent website – There are a number of websites specializing in publishing patent advertisements. Find the right one and you might be able to publish an ad for free. Try venture capital – Venture capital is a great way to make it possible for your invention to enter the market. Reach out to a patent broker – Finally, you can also contact a patent broker who already has connections and will do the hard lifting for you.
Selling your patent
When it finally comes to selling your idea, you will find that you are faced with two options in general. You can sell the patent directly and gain a more considerable but one-time payment, or you can license your idea and keep profiting from it in the future. In the latter case, you don’t actually sell the ownership of your patent; you just sell the usage rights. As your licensee starts making money, you will earn royalties along the way. While this may seem like a better payoff in the long run, there is no guarantee that your product will be a success, and even if it will, it takes a long time to make a considerable profit. Dealing with a licensee can also be troublesome. Which route makes more sense will depend entirely on you and your invention.
It takes more than just having a patented idea in your pockets to make money. To get the best return on your invested efforts, the selling process must be executed meticulously. Don’t skip any of the above steps and you’ll be on the right path.