Should Your Patent be For Sale?
If you invent a product or formula, it is highly important that you obtain a patent to protect your ownership rights to that product. However, developing and patenting an invention does not mean you will automatically reach financial success, as neither the design nor the patent will bring in income. In order to effectively earn money from your invention, you need to market the product, produce it, and sell enough to earn more than your costs. Many inventors do not have the capital or means to market and sell a product effectively enough to make a substantial profit on their own.
If you are unable to produce and sell your patented product yourself, it does not mean that your invention was useless, as you have other potentially lucrative options. One important option is to sell the patent for your invention to another company that does have the resources to manufacture and market your product. However, selling your patent is not always the right option in your situation and you should always seek guidance from an experienced business litigation attorney who understands intellectual property law.
Benefits of Selling a Patent
Selling a patent can be very beneficial for numerous reasons, including the following:
- The financial earnings are immediate and you do not have to wait for the product to be produced and sold;
- It will no longer be necessary to track down financing for your project and business;
- You can use the proceeds of the sale to pay for your next big project and endeavor;
- Your dealings with the company that bought the patent will end once the sale is final and you will not have to worry about ongoing communications;
- The sale of a patent is often relatively hassle-free and quick to close; and
- You will not have to track down royalties for years as you would if you granted a license for the patent instead of selling it outright.
The benefits of selling a patent can be very attractive to inventors who would like to profit from their invention as soon as possible. For this reason, too many patent holders sell the rights to their invention without fully realizing all the implications of the sale. A patent sale can have downfalls as well as benefits, and some of these downfalls may include:
- A company may offer much less that your patent will ultimately be worth if the product is relatively new and non-established in the market;
- If the true value of the patent is later realized, you will have no rights to additional compensation; and
- You will have no rights to use your idea or produce and sell your invention in the future.
Some patent holders have sold the rights to their invention believing that they earned fair compensation for their patent. However, they later witness their invention revolutionize an industry and create billions of dollars in profits for the patent purchaser. There is nothing an inventor can do in this situation but wish they had more carefully considered the sale.
Selling a patent can be the best idea for certain inventors and a poor idea for others. Before making a deal, you should consult with a West Palm beach business litigation attorney at Pike & Lustig, LLP who can review your situation, weigh your options, and provide valuable advice. Call us today at 561-291-8298.