Buy Patents: Everything You Need to Know
Individuals or businesses buy patents to increase their standing in the patent market.3 min read
Individuals or businesses buy patents to increase their standing in the patent market. It gives them the right to sole ownership to license or manufacture their inventions. Creating and implementing a patent buying program can improve the success of your company.
Pros of Patent Buying
- There has been an increase in patent buying in recent years, which means there is a thriving market available to individuals and businesses.
- Recognizing the fact that there are billions of dollars in patents available can help you realize the importance of management and the temptation to overbuy.
- Setting limits on buying patents while tracking potential patent purchases can help reduce spending, which results in a better chance of succeeding.
- The patent holder has the option of selling his patent outright to another buyer.
- An inventor has the option of offering limited licenses via a contract with other buyers.
- Patents are considered a business asset.
- Licensing allows the buyer to manufacture an owner's invention. The owner will receive either a royalty from sales or be paid in a lump sum.
- Inventors may be more motivated to license their patents to sell, use, or manufacture their products because this can be more profitable over time.
Cons of Patent Buying
- Getting a patent does not mean you have it for an indefinite period to make it succeed. There is a limited timeframe to turn the exclusive rights into a profit before the patent expires.
- If multiple inventors file for a patent together, each can do as he pleases when it comes to manufacturing the invention or selling or licensing the patent to someone else. He does not need permission from the other inventors who filed with him.
- Before agreeing to a licensing arrangement, do thorough research of the interested party. Also, contact the United Inventors Association for information and resources.
- If you're in the market to buy an existing patent but the owner information is not available, contact the United States Patent and Trademark Office (USPTO) and do a search. The owner of the patent will be identified.
- To buy a patent with full control, it is necessary to finalize the sale with the patent owner.
- When buying a patent, you want to be sure it is free from any legal disputes. You can research this information at the USPTO.
- Determine the types of patents that will have the most impact on your business needs.
- Ask yourself if the patents you're interested in will increase the value and/or profits of your company. Just because the patents are available for purchase and they have no issues, does not mean they are a good fit for what your company needs.
- Do a search of the USPTO online database for product and patent information.
- Check the online advertisements placed by inventors in the Gazette at the USPTO website. Also, search for online marketplaces where inventors post their patents they're interested in selling or licensing and visit industry trade shows.
- Once you decide on a patent to buy, know what rights you want to be included in the purchase.
- Contact the inventor and follow up with a letter of interest for purchasing the patent outright or licensing the rights.
- Discuss your plans with a patent lawyer.
- Execute the agreement and have it notarized.
- File the assignment with the USPTO.
Q. Once I buy a patent from an inventor, do I take care of registering the change in ownership?
A. No. It is the responsibility of the owner to register with the USPTO the change in ownership. The registration must be in writing, and it must be notarized to assign the rights, title, and interest to a buyer who is purchasing the patent or the patent application.
Q. When I buy a patent that needs to be registered, is this done in person?
A. No. the USPTO website has an Electronic Patent Assignment System that allows the owner to file online.
Q. If I choose to license my patent, who is considered the owner?
A. The original patent holder retains the rights to the invention. The person or person(s) you assign a license to will be responsible for paying you based on the agreed terms.
If you need help with buying patents, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to it site. Lawyers on UpCounsel come from renowned law schools, such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.