1. How to Get a Patent License: Everything You Need to Know
2. What Is a Patent License?
3. How Is a Patent Licensed?
4. What Are Licensing Rights?
5. What Are Some Options for Selling a Patent or Licensing?
6. How Are Inventions Licensed?

Updated November 27, 2020:

How to Get a Patent License: Everything You Need to Know

To get a patent license, you must go through the patent application process. Patents are a protection given by a regulatory agency for your invention and can be kept or sold. Keep in mind that an invention only needs to be patented when there are plans to market, license utilization rights, or sell the innovation to someone else.

What Is a Patent License?

A patent grants its proprietor the right to exclude others from utilizing the patented invention, while a patent license reflects utilization rights obtained by an investor for that patent. By granting a non-exclusive license, the patent proprietor basically guarantees to not sue the licensee for patent infringement.

How Is a Patent Licensed?

A patent is licensed by selling utilization rights to an investor. This can be an individual or a corporation. The terms can vary from being very simple in a one-time licensing fee, to more complex where fees are determined by audits of revenue or utilization. The documentation is also quite straightforward, although it may be prudent to have a patent license agreement reviewed by a legal professional. You will want the agreement to have typical terms, such as a specific geographic location, how long the license lasts, etc.

What Are Licensing Rights?

Licensing rights provide others with the ability to utilize a patented innovation. As a patent holder, you own the invention and can earn royalties or licensing fees by selling licensing rights to investors or another company. It is possible to grant varying licensing rights to one firm, or several firms. Of course, how much revenue can be generated through your invention will also determine the licensing fees that you receive.

A larger firm may provide a greater possibility for growth than a smaller firm. The licensee assumes legal responsibility for any product issues. Before obtaining a patent, you may want to do some market research to determine the potential in your innovation, and then contact various organizations, such as the United Inventors Association, to provide you with some guidance.

What Are Some Options for Selling a Patent or Licensing?

There are various options when selling a patent or when licensing it. Thus, it is important to generate a list of possibly interested companies and customers for your invention. Your licensing doesn’t need to be limited to just one firm. However, keep in mind that each firm will want to find potential for generating revenue from your innovation.

One way to broaden the range of your contacts is through commerce or invention exhibits and trade shows. You’ll have a larger group of potentially interested businesses to talk with. Additionally, investigate new product bulletins in trade publications and inventor’s magazines to find potential customers. It may also be helpful to find angel investors or other sources of funding, such as crowdsourcing, to expand your outreach.

Several firms have websites where inventors can promote their patents on the market. A broker will market your invention to manufacturers and will acquire the fee from companies if the product is purchased. Before utilizing the companies of any broker or firm verify that they are reputable with the Better Business Bureau and United Inventors Association.

How Are Inventions Licensed?

Potential firms will evaluate your innovation based on the potential for generating revenue, which will determine how much they are willing to license your innovation. Depending on the innovation, and subsequent product, service, or other use, will determine whether you will want a one-time license fee, recurring royalties, or licensing fees based on the revenue generated.

It will be important to include both a method to audit your licensee and also to set limits for time period and geography. It is often helpful to have prototypes or sufficient materials to explain the benefits of your innovation. If your invention has shifting components which are necessary for a demonstration, make a video and duplicate it. A digital prototype can also help an interested investor perceive the value of your invention.

Are you trying to get a patent license? Help is available by posting your legal need on UpCounsel's marketplace. Lawyers on UpCounsel come from 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. Get the assistance you need from legal experts that know how to get a patent license.