How to Purchase a Patent: Everything You Need to Know
Determine how to purchase a patent by first understanding what a patent is. 4 min read
2. Find a Patent to Purchase
How to Purchase a Patent: Everything You Need to Know
Determine how to purchase a patent by first understanding what a patent is. Companies invest and make millions in revenue each year by patenting or manufacturing patented items. Before the first penny of profit, however, manufacturers have to lock down the legal rights to a patent.
Manufacturers are required to either develop and curate items of their own to patent or to pay for the use of existing patents. Finding these patents may be difficult, but it’s essential for most manufacturers to operate. Once a manufacturer identifies a proper patent, the seller and buyer have to transfer rights to the patent and must register the transaction with the U.S. Patent and Trademark Office (USPTO). Patents give their owners the right and legal authority to manufacture, license, or otherwise utilize a particular invention.
Among other things, these patents can cover:
- A new physical invention
- A creative idea
- A means of conducting business
- A piece of software
They are considered business assets, which means they fall under the same category as things like company vehicles, computers, or a company’s headquarters. Just like these other assets, a company can seek to purchase patents that may be useful or beneficial to them.
Once an inventor or inventors have legally acquired a patent for their invention, they have a very limited period of time in which they can make money from their exclusive rights before the patent expires. For this reason and others, inventors often sell their patents to the highest bidder — usually a company that is better equipped to manufacture or market the invention to the public.
Rights concerning patents may be bundled out in the form of licenses for limited, particular use. Choosing the patent to buy is best done carefully — by reviewing both current and former issues of the USPTO newsletter, which is published weekly and announces weekly patents that have been issued.
Individual, unique announcements about newly-minted patents from the U.S. Patent and Trademark office include the contact information of the owner of the rights and basic schematics of the newly-patented invention.
One should contact a patent owner and ascertain whether or not they are willing to sell their rights to a given patent. If so, attempt to negotiate purchase terms so ownership transfer can occur.
Find a Patent to Purchase
Whoever currently owns the patent is the same individual who has the legal authority to make the sale. If they deem your offer good enough, nothing is stopping them from accepting it and legally transferring the patent rights to you.
If the owner of a patent is a business, one can negotiate to buy the entire company, thus acquiring a patent of interest as one of the business’s assets.
One can browse auction houses or trade show listings, as well. Hard copy and digital means of doing so both exist, and are a great source of patents that are not directly available for sale through the United States Patent and Trademark Office.
One should identify the patent they want to buy and should study the procedures of an auction. If, should you attempt to purchase patents this way and require guidance as to what patent types fit your needs the most, you should contact a patent attorney.
If you see a product and wish to see the associated patent — for example, if you wish to license it or purchase it outright — there is an online database made available by the USPTO. The full text and image database allows users to search the text of every single patent issued since 1976, and it includes the most recent patents, too.
Online marketplaces allow inventors to post their patents for sale or licensing.
Before using these websites, one should check with the United Inventors Association to ensure that the marketplace is legitimate and not a scam. Brokers are excellent allies in these situations. Consider hiring one, as they can connect investors to buyers, thus introducing parties who may have patents the other is interested in.
Before contacting an investor or broker, it’s important to know which rights would make a good asset and what has to be done in order to obtain those rights. The process can be quite convoluted already, and nothing slows it down more than improper research.
Consider an example: As a business owner, if you see a tool or invention that is patented by somebody else, such as the inventor of the tool, and you want to incorporate the invention into a device you already manufacture, you would be required by law to obtain the licensing rights to that tool before manufacturing a product that used it.
It’s often beneficial to purchase a patent outright, which allows you to avoid needing to pay royalties to the inventor or holders of the original patent.
Lawyers and brokers are adept at keeping tabs on inventions and patent sales relevant to their clients’ industries.
Staying current on the news and developments in a given industry is a great way to maintain and further your understanding of patents related to it. Of course, it’s also prudent to learn about the inventors and owners of a given patent.
If you set out to purchase a patent, you would do well to treat the situation as if it were one big job interview. You would position yourself to learn as much about the company or people you may be doing business with.
A common approach to researching an inventor is to check out their social media presence or any websites he or she may own.
If the patent owner has a business, that business probably has a website. You should research the website, the business’s reputation and activities, as well as its strengths and weaknesses.
Only through understanding an inventor’s position in their respective industry can you obtain a full picture of how best to approach them about buying their invention.
If you’d like assistance or more information on purchasing a patent, post your legal need to UpCounsel’s marketplace. Lawyers from UpCounsel consist of Harvard and Yale graduates who have an average of 14 years of legal experience. They are top lawyers who have worked with the largest companies in the country and are standing by to assist with your legal needs.