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Turning an Invention Idea into Money

Lesson Nine: How Do I License an Invention?

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(c) FreeFoto.com
(c) FreeFoto.com
Introduction - About These Lessons

If you have a patent or have applied for a patent (patent pending) you can attempt to license your patent rights. Non patented inventions can be licensed as well and the research/marketing methods would be the same, however, extra/different steps would be taken that are not covered here.

Use This Resource - List of Manufacturers

Create a list of potential manufacturers who may be interested in your product. In our lesson on searching for prior art it was suggested that you write down any patent assignees - now you can understand a use for them. Aim for a list of at least 50 or more.

Find manufacturers by looking in stores and magazines for similar products. Visit product related tradeshows. Your local library should have great reference material on manufacturers. Use online manufacturer databases such as the Thomas Register to search for companies that make a product like yours. You can do an Internet search for manufacturers by using the keywords of your product.

Send a Marketing Letter

Send a brief individually tailored and professional looking marketing letter to each company on your list. The letter will state that, you are willing to consider selling or licensing the patent rights to your invention. With your marketing letter, it is superior to include a professional looking brochure and a website address connected to your product. A short one-page color brochure with photos, that describes your invention and its benefits, should also be included with the marketing letter. A second choice would be to send a copy of your patent drawings. Wait one month, if a company has not replied you can then telephone them to see if they are interested in your product.

Treat Your Licensing Agreement Seriously

If you have the opportunity to negotiate for a licensing agreement, you may want to use an experienced lawyer. It is not advisable for you to negotiate the contract on your own. The license agreement will include provisions for upfront payments, royalty percentages and infringement issues. You can give an exclusive license to one party, or a non-exclusive license to more than one party. You can set a time or territory limit on the license or not.

The USPTO will publish in its official gazette a notice that your patent is available for licensing or sale for a fee.

Continue > Lesson 10: Business Plans

  1. About.com
  2. Money
  3. Inventors
  4. Selling Your Product
  5. License an Invention - Basics on Patents

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