If you have obtained a patent for your invention, then congratulations are in order! However, the next step is equally important. You need to monetize your patent. Making money with your patent is the reward for all of the hard work you have done to develop your invention.
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Selling Your Patent
Not every inventor is willing to sell a hard-earned patent, but many are. If the offer is good enough, it may be too tempting to pass on a sale. Often a company will find your patent intriguing, but they want to make changes to it or perhaps take the idea and develop it in an entirely different direction than you originally intended. Maybe a firm simply thinks it will be cheaper for them to buy the patent than to purchase a temporary license for it. Whatever the case, a one-time patent sale is one way to make money from your invention.
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Licensing Your Patent
Licensing, in general, means that the inventor will retain ownership of the patent but will be making money at the same time. In some cases, there may be a potential to make money, but how much exactly will be dependent upon the nature of the licensing agreement. There are a few different ways to license your patent.
- Patent licensing with a flat fee You can license the use of your invention for a specific amount of time. This time can be short or quite long; it will depend upon the nature of the invention. The good thing about a flat fee for licensing is that you will have cash in your hand by selling a license for its use. Chances are that this will be the only money that is made until the license is up.
- Patent licensing with royalties This is a great way to make a lot of money on an invention. The company that licenses your invention will pay you a percentage of every sale they make from the products that are made with your invention. The downside to this is that the license may not be used at all. If the company that purchased the license never gets around to making a product involving your invention, you never make any money with it.
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Launching a Business Partnership
One person may have the expertise needed to manufacture a product along with some seed money to get a company up and running. However, this same person may not have anything to manufacture. This is where you come in. With your patent and a partner who has some start-up capital, a partnership can be formed. The patent will belong to the new company, of which you have a significant portion of ownership. If your invention is popular, you can become very rich as the owner of the company that makes your invention.
