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There are several steps to successfully licensing your invention. First, you must find the right people to review your idea and ensure that it has appeal. Second, you must raise the money necessary to develop and protect your invention, such that it can be licensed in a complete form to a third party.
Licensing your invention, the options. There are really only two main ways to make money with an invention: license your patent for royalties, or produce your invention yourself, and market it.
Licensing is an alternative way to bring your idea or invention to market with limited risk using someone else's resources and collecting a royalty payment. Invention Licensing means partnering with a manufacturer with an existing distribution chain who will rent your invention and take the product to market.
Locate Manufacturers. Identify potential licensees. Sign a Confidentiality Agreement. Ask potential licensees to sign a confidentiality agreement to protect rights to your intellectual property. Negotiate Patent License. Complete a Patent License Agreement.
Make a prototype of your invention. Search for manufacturers. Present your prototype and ask for a sample once you find a manufacturer that looks like it could fill your need. Inspect your sample.
Licensing or assigning rights to your invention is likely to be a simpler, less expensive route than manufacturing and selling it. Licensing or assigning your invention is often preferable for inventors who want to make money, but care primarily about innovating and spending time in the office or lab.
The patent buyer usually won't want to spend a lot for an unproven product that might not generate a big profit. But what if the product does becomes a hit? You sold the patent for $500 but new patent owner rakes in $500,000 in profits! Deciding on an outright sale of your patent depends on the invention.
An inventor taking this approach to patent selling may attract $5,000 to $35,000 for their patent, or more if it's a valuable patent. Some inventors hire a marketing service to try to interest companies. Such marketing companies usually keep statistics on their success rate.
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