Ways To Make Money From Your Patent

By: Michael J Foycik Jr. 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

Ways To Make Money From Your Patent

Here are some ways inventors can make money from their patents. These come directly from actual successes of actual inventors, as told by the inventors themselves in published interviews.

It is important to realize that every invention is different, with different markets. And, different inventions tend to attract different types of investors. Focus on what makes your invention different, and the rest will be easier.

The Licensing Approach - Accumulating Licensees
There are several approaches to gaining licensees. The following is one of the most successful approaches, where there are a number of different infringers. Where there is only one infringer, it may be necessary to threaten litigation, but that only works if the infringer believes you have the resources to do it.

First: identify which companies, products or services may be infringing your patent. Make a list, and try to estimate the sales of each one.

Then, line up the infringers by the estimated amount of infringing sales. Send demand letters to the smallest infringers, asking relatively small royalties. It would not be unreasonable to offer petty infringers royalty rates of 2%, or in some cases even a 0% royalty; all conditioned upon sales being below a certain limit.

As you accumulate more and more licensees, you will approach larger and larger infringers. The more licensees you have, the easier it is to sign on bigger companies as licensees. And, you can ask form somewhat larger royalty amounts. Having ten licensees, for example, is a persuasive factor to a company you approach for royalties, when that company is deciding whether or not to risk being sued for infringement. By this time, the royalty demands should be in the 6% to 9% range.

The largest infringers are saved for last. For those companies, seeing your list of licensees suggests you will have substantial reserves in case of litigation. It is much easier, by this point, to persuade them to pay the higher royalties in the range of 10% to 18%.

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