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What You Need to Know about Selling Your Patent - BizAdvisors


Selling Your Patent: What You Need to Know

Selling Your Patent

One of the most essential steps in the innovation process is filing for a Patent since it gives the innovator some chances. First, it transfers ownership of the innovation to the inventor, protecting the concept from infringement. After that, it grants the inventor the only right to use it. And as a result, it recognizes the consistent effort over months or years that an inventor expended to build something that had never existed before. We will go over the various steps for selling a Patent in this article.

What is a Patent?

Before we go over the many steps involved in selling a patent, let’s define what a patent is. An essential component of intellectual property (IP), a patent gives the proprietor the legal authority to prevent others from creating, utilizing, or selling an innovation for a certain amount of time in exchange for publishing or otherwise publicizing an enabling disclosure of the creation. According to national laws and international agreements, there are significant differences between countries in the process of registering a patent, the obligations put on the patentee or owner, and the scope of the exclusive rights. A patent application must typically include one or more claims that specify the scope of the protection being sought. Each claim in a patent, which may include several claims, defines a distinct property right. These claims must adhere to various patentability standards, which in the United States include originality, utility, and non-obviousness.

The procedure for Selling Patent

The following are the steps to follow to sell a Patent:

Step 1: Assessing Market Applicability

The likelihood of selling a patent increases with ease of invention implementation. Recognizing the market applicability of the claimed innovation is therefore the first step in successfully selling a patent. We must evaluate two factors, as follows:

  • How simple it is to produce something using a patented invention.
  • How economically feasible is the entire production process? For instance, whether there is a market for the product or good.

Recognizing any existing product or business process that infringes on the patent in any way is one of the best ways to evaluate the aforementioned two aspects. It serves as evidence of the patent or patents in the portfolio’s high level of market applicability. Conducting an infringement analysis is necessary to determine whether a patent has been violated, and doing so will assist you in identifying the market participants who are responsible. It implies the infringement and its kind, allowing us to build our selling story around it and present our offer more favorably. It becomes imperative to maintain the emphasis on the most significant Patents in the collection when the portfolio contains a diverse range of Patents.

Additionally, being aware of the underlying technology and its characteristics aids in identifying all potential markets where a patent or patent portfolio may be applicable. By doing this, they allow the Patent to be used in hitherto unexplored ways.

Step 2: Calculating Market Value

The next stage is to evaluate the patent and determine its fair market value once it has been determined that it has a broad market use. The evaluation is a crucial step in the process since it keeps the seller or innovator aware of the value or worth of their patent. It leads to better decision-making as a result, and it keeps the seller on the same page throughout the negotiation process. There are various ways to make it happen, but the most effective ones are highlighted below:

  • market-based strategy
  • income-based strategy
  • Hybrid-Approach
  • Cost-Based Methodology

Step 3: Finding the Capable Buyers:

Finding potential purchasers is the next stage in selling a patent after determining the patent’s optimum value. In this step, we look for potential partners who would be interested in the patent’s core technology. There are several ways to do this, which are listed below.

Finding the market participants who are infringing the Patent in any way is the simplest method once you have identified a potential infringer. Such infringers become our primary audience to whom we present the offer and who may be given two choices. To prevent infringement, they can either buy the patent, purchase a license, or modify their process.

If there are no violations, the alternative is to search for players who are having similar issues. These are the players operating in the relevant field who can gain from the technology covered by the patent. This is accomplished by looking up or contacting businesses in the relevant industry to learn about their operations and difficulties. Using the proprietary technique, people can be located and advised of the answer to their issue. This will raise the possibility of selling a patent for a fair price, finally resulting in a situation where both the buyer and the seller come out ahead.

Finding competitors who are filing patents in a related field is another option. Identifying these players would indicate their interest in the relevant technical field and potential interest in buying the Patent. The justification is that adding such Patents will strengthen their Patent Portfolio, making them potential buyers.

As a result, when searching for such players, the seller must consider if the company has an internal R&D practice, a history of patent applications, or a history of company acquisitions. This strategy indicates that the corporation prefers organic expansion for its portfolio of patents rather than actively seeking out buyers. However, if it has a history of acquisitions, it is more likely to pursue organic expansion and may voluntarily buy the Patent.

Therefore, businesses that choose to expand through company acquisitions may be attractive candidates to sell their patent portfolios.

Step 4: Talking to the Identified Prospects

It’s crucial to correctly initiate contact with the prospects in order to close the recognized leads. A good plan can help you achieve your goals, but a bad one can ruin your chances of success.

As a result, the first stage in a proper execution is to properly package a list of patents. The conclusions drawn from an analysis of Infringement should reflect this. In this way, the pitch is kept closer in line with the demands of the client and the market.

In this step, a pitchbook is prepared to interact with potential businesses and bargain for a price. It includes all the information needed to let a knowledgeable purchaser or licensee understand how a particular invention might benefit them. For instance, it contains information about the patent’s facts, the technology’s applicability, the issue it resolves, a market analysis, additional benefits, etc.

Step 5: Negotiation Executing the agreement involves two steps, which are as follows:

First, a CDA (Confidential Disclosure Agreement) or NDA is signed by all parties involved in the transaction (Non-Disclosure Agreement). These contracts are necessary to prevent patented knowledge and other important insights from entering the public domain. The seller can confidently provide additional information after the CDA, or Confidential Disclosure Agreement is in place. Here, service providers for intellectual property[1] can purposefully make collaboration between the parties easier.

In addition to these, it’s crucial to make sure that these discussions produce a situation where both parties benefit. The seller must also keep in mind that the buyer will anticipate the Patent and present factors to negotiate the asking price down. Better deal negotiations would result from referring to the pitchbook’s arguments and data. As soon as the talks are through, the sale would be finalized by assigning the Patents to the purchaser. 


The secret lies in a methodical methodology that starts with a market applicability analysis of the Patent. This helps the inventor make well-informed choices on the sale of a patent, including whether to sell the patent. It also considers several patent evaluation techniques to help the seller determine the patent’s fair market value and to protect the buyer from undervaluing the patent. Additionally, it provides information on how to identify the right buyer for the Patent. Seek professional advice for selling Patents. You can also reach Bizadvisors.io for more information.

Read our article:All You Need to Know About Expired Patent Renewal Process

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