Creating and acquiring a patent is a time-consuming and expensive process. One must reap the benefits of their resources, body, and mind investment by commercializing their creations and leveraging them to create and open new doors of opportunity. The licensing of a patent is an important part of the patent life cycle. Mybusinessfilings, the No.1 Patent Licensing Services provider, can assist you with creative Patent Licensing Strategies for your Patent.
Patent Licensing Agreement
A patent grants the patentee exclusive rights to prevent others from manufacturing, marketing, selling, or using the invention if it is used without their permission. As a result, a patent may only be used by another person if the patent owner consents to such use, which is also known as patent licensing. A patent licensing agreement is essentially a legal document that allows the patentee to exchange intellectual property or patented technology (along with manufacturing, marketing, selling, or usage rights) with the other person for an equal value as agreed upon by the two parties. It can be a one-time lump sum payment or, more commonly, a royalty on revenue generated. The other person may have to agree with the condition of the patentee, if any, in order to get their hands on the patented invention. The license can be an exclusive or non-exclusive depending on the patentee.
Long ago, in the 1990s, Apple invented an input and output connector (an ancient type of USB), despite the fact that its performance was not cutting-edge, they demanded high royalty fees from third parties. This is a licensing strategy that aims to establish a standard. The inventor of the company or corporation holding the IP asset benefits from this strategy by removing barriers to widespread market acceptance. Patent licensing attempts to establish a standard and broadens the market for the invention on a global scale.
Advantages of Patent Licensing
There are numerous benefits to licensing your invention at the appropriate time. The primary goal of licensing a patent is to increase royalties. When a patentee lacks sufficient capital to manufacture and sell a valuable invention, rather than risking solely running the market, you can minimize such risk and recover profits by transferring them to licensees.
Sometimes small things which are over sighted while licensing a patent!
Some of the inventions are extremely valuable and have the potential to generate large sums of money. If the patentee or company is aware of the value of their patent, they must be very selective in their licensee selection. Patent royalties are typically charged in advance or annually by the patentee or companies. Royalty rates must be considered based on a variety of factors, which may differ from industry to industry and product to product. As a result, you should be aware of the appropriate value of your patent and royalty request.
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