Innovations become considerable financial boons if exploited correctly. Before investing resources into the idea, however, consider the wisdom of carefully protecting the invention; a patent attorney is a first port of call. A patent attorney can conduct thorough searches to determine if your innovation is likely to be successful, and he or she will shield your creation by drafting a patent specification and filing for a patent in the right way.
Selling your patent for immediate payment
The most straightforward route to making money is to sell all the rights to your idea. This step can be taken without a patent, but it is much safer to ensure your creation is protected lest someone else runs with the idea while you are trying to find a buyer.
Keep in mind that if the invention is made public before the patent application is filed, the patent won’t be validly granted. Make sure potential buyers sign a confidentiality agreement, especially if a patent has not been approved yet.
In terms of approaching those buyers, industry leaders are usually keen on perusing and taking promising ideas on board from third parties. Alumni associations, trade shows or even an Internet search for companies that purchase and monetise others’ concepts can all serve as workable avenues to the right buyer.
Licensing as a long-term option
If time and money are tight, a sale may be more appropriate. The same holds true if the idea is short-lived – maybe it is tied to a very current and rather fleeting trend. Otherwise, licensing your patented idea to a manufacturer provides a steady income that may outweigh an upfront payment. Typically, the financial arrangements will account for the cost of production, and creators accept a small percentage of the sales as royalties.
As you’re approaching things sensibly, and to ensure you do receive royalties, work with your legal advisor to draw up a licence agreement that specifies a minimum level of production or sales from the licensee. A well-worded termination clause paves the way for licensing the idea out again if and when it makes sense.
Types of licence agreements
A licence agreement can be exclusive or non-exclusive. Either the licensee has the sole right to use and profit from the patent, or multiple licence holders can make use of it.
An arrangement that comprises several licensing agreements based on geographical locations or markets may be in order. A patent can be licensed exclusively in a region where you are not competing with it, or a sole licence could see the licensee exploiting the invention in the same region but without the ability to license it out to anybody else.
Maximising the value
Most inventors are not marketers, and even with a lawyer they may struggle to get the best deal for their idea. Approaching an invention-promotion business has its advantages; they evaluate the specific potential of your patent and develop and market it to maximise its value.
But be careful: the UK Intellectual Property Office has warned innovators about unreliable promoters demanding significant upfront payments and providing very little in return.