Ways to monetize a patent

6869768383_84f708306e_nThe following are the most common ways to monetize a patent:

Commercialization

Commercialization is the process of developing a product for the market using the protected by patents. Patent rights provide the legal basis for stopping any infringements, and can potentially ensure monopoly of the product, depending on the strength of the patent. Most companies obtain patent rights to protect their products in the market.

Licensing

Another way to monetize a patent is to license some or all the rights associated with a patent to another party that may be interested in commercializing the technology covered by the patents. Licensing may be further categorized into direct and indirect licensing.

Direct licensing refers to the arrangement where a patent owner completely transfer some or all rights to another party (licensee), and the licesee takes control of the commercialization process. An example of direct license would be a patent owner licensing all rights associated with a patent to an entrepreneur interested in developing a product based on the technology protected by the patent.

Indirect licensing refers to the arrangement where a patent owner controls all the patent rights and works in collaboration with another party for commercialization of the technology. The type of relation between the parties involved in a indirect licensing arrangement is circumstances driven. An example of indirect licensing would be a patent owner working with a set of manufactuers and marketers for making and selling the product for equity in the collaborative while still controlling the rights of the patent. Please note that in the collaborative effort, the patent owner must be give sufficient rights to manufactures and marketers to make and sell the product on behalf of the patent owner.

Sale

Yet another way of monetizing a patent is to go for an outright sale of the patent rights. It is a viable option for a patent owner when the patent portfolio that he is looking to sell is driven by at least one strong patent. There are many patent brokers that facilitate the sale of patents by connecting a seller with the right buyer, and a buyer with the right seller.

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By, Arun Narasani, Founder, ipMetrix

If you have a granted patent, and are looking to monetize your patent, please feel free to contact us at monetize@ipmetrix.com. While we cannot guarantee monetization, we may be able to help with commercialization or selling your patent, depending on the technology field and the strength of the patent.

Photo by “401(k) 2013” (on Flickr) / CC BY-SA 2.0

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