How a Patent Broker Can Help You Sell Your Patent
The majority of inventors who apply for a patent do so because they want to monetize their idea. They know that a patent establishes legal ownership of an invention, and with that ownership comes the exclusive right to make and/or profit from the invention in the country in which the patent is issued.
How Can You Sell Your Own Patent?
You can sell your own patent, but it’s far from easy.
Where Are Your Potential Buyers? Be prepared to research what companies might be most likely to take an interest in your patent.
Be Ready to Deliver the Details Buyers Want. A potential buyer for a patent wants to make an educated decision. They will want a lot of information. Can you deliver?
Unfortunately, most inventors don’t understand what kind of information potential buyers need, or even how to obtain that information. The research involved can be challenging and time-consuming.
Instead, an inventor might put together a sales pitch that wastes everyone’s time. As Schibanoff says, assembling a prospectus that a potential buyer will take seriously involves, among other things, “putting together the right marketing materials so that the potential buyer has in front of him or her exactly the information they need, and no information that they don’t need.”
A few examples of information that potential buyers typically want to know include:
- Whether anyone else is infringing on your patent. If so, the buyer will want to see claim charts professionally prepared by an impartial third party
- The size of the market that exists for the product(s) that can be developed from your patent
- What products similar to yours exist on the market, how much they sell for, and how briskly they sell
- If the need or demand for your product(s) is on the rise or waning
Good Luck Getting Past the Gatekeeper. Most companies that buy patents have a general policy of not accepting direct sales pitches from inventors.
There simply isn’t enough time for the folks at these companies to talk to or meet with every inventor who thinks they have a great idea.
The gatekeepers who answer the phone at such companies are typically receptionists or assistants, and they probably hear from hopeful inventors all the time.
Resist the urge to tell them about your invention and then expect them to be dazzled.
“I remember one of our clients who tried for two years to sell his invention but was unsuccessful. Then he came to us for help,” says Alec Schibanoff, a Vice President at IPOfferings LLC, a U.S.-based patent brokerage. “He offered to share with us the list of contacts he had made at different organizations. When we looked at the list, we realized that his contacts were all receptionists. He thought he could get the receptionist to fall in love with his idea, and the receptionist would go to the right people in the company and persuade them to take a meeting with this brilliant inventor. That’s not how it works.”
Making Them Come to You. With no welcome mat at the door of your target buyer, you may have to persuade them to come to you.
How does that work?
The most common method of marketing a patent is to list it in an online patent marketplace.
Patent marketplaces are essentially websites where patents are listed for sale.
However, keep in mind that anyone who can create a website can call it a “patent marketplace” and charge you a small fortune to publish a description of your patent. Does this bring you any value?
Put a Patent Marketplace to the Google Test
In order to be worthwhile, a patent marketplace must be widely used and well-known to serious patent buyers.
Is a so-called “patent marketplace” trying to sell you space on their site? Look to see how easy it is for genuine patent buyers to find them.
Put yourself in the patent buyer’s shoes and perform the Google test.
“Go to Google, type in ‘patents for sale,’ and look at the top ten companies in your search results,” advises Schibanoff. “They’re the equivalent of a mall that sees thousands of customers a day. If I wanted to have my product displayed in a store, would I want it in the mall, or in a little shop on some back street that gets no traffic? If your patent is listed on a marketplace that can’t be found on the first one or two pages of Google, it’s on a little back street. What good is it to be listed on a website that nobody visits?”
That’s What Patent Brokers Are For
Taking a do-it-yourself approach to selling your patent is an uphill journey all the way.
However, patent brokers exist to do the work of selling your patent for you. But using a patent broker is about more than just lightening your load.
A well-established patent brokerage with an expert staff can do the job right and give you a winning edge.
It could take you months to research potential buyers and the market dynamics for your product. And do you know where to begin to search for possible infringements on your patent? A good patent broker will have team members with years of specialized experience dedicated to these tasks.
And when it comes to getting past the gatekeepers, the best patent brokers have their own set of keys. After doing thousands of deals with companies in various industries, a patent broker will have well-established relationships with the right people.
Even in companies where they may not have a contact, a patent broker can get their calls answered. Companies know that any patent offering that’s represented by a broker has been well-researched and comes with a lean, informative prospectus.
Top-notch patent brokerages often find other, more creative ways to get a patent in front of the right eyes.
For example, Schibanoff’s brokerage IPOfferings sometimes gets articles about their clients’ inventions published in trade magazines, where the appropriate industry people can see the possibilities in an invention and get excited.
How Patent Brokers Get Paid
Most patent brokers work on a contingency basis. They get paid a commission only if your patent sells. At that time, they take a piece of the pie, sometimes referred to as a “success fee.”
Beware of Guarantees
Using a patent broker won’t guarantee that you’ll sell your patent. In fact, Schibanoff at IPOfferings suggests that such promises from a patent broker should make you leery.
“Making promises about finding a buyer is extremely unethical,” says Schibanoff. “We make it clear, as would any reputable broker, that we are going to put forth our best efforts. We earn a commission, so we’re incentivized to do so. Making our best efforts is the only thing we can guarantee.”
However, a patent broker has the expertise, contacts, and experience to maximize your chances of selling your patent.
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