Why do you want a patent? Part 2

Why do you want a patent? Part 2

Why do you want a patent? Part 2

I’m not an expert. I’m just a guy who likes to think about stuff.

Why do you want a patent?

I asked this question last week. I had an answer then, and I have another one now.

Your answer may be, “I want to license or assign my invention.” Having a patent, or at least starting the patent application process, is a good idea in this case.

Let’s make the distinction between licensing and assigning. Licensing your invention is essentially renting it out. You give a company or companies the right to make and sell your invention for a specific time period. The licensing deal can be exclusive (only one company has access to your invention) or non-exclusive (more than one company has access). For instance, you may give a company the right to make and sell your invention for an initial investment of $25,000 and subsequent payments of 3% gross sales for 5 years.

Assigning is selling your invention to a company. You give a company all the rights to your invention – forever. If you look at the first page of a patent application or issued patent, you will see the inventors and the assignee. The inventors are the assignors – the ones who sell their invention to the assignee, typically a company. I worked at medical device companies for several years. Employees of these companies were often obligated to assign their inventions to the companies if the inventions were conceived on company time using company resources.

For independent inventors, licensing is typically the better option. Licensing is for a finite time, after which you can assume total control of the invention. Assignees are typically less likely to pay favorably on an unproven invention, too, so the payout in a licensing deal is often more attractive.

If you’re approaching angel investors or VC firms to invest in your invention, they often want to see that you’ve at least filed a provisional application. They want to know that anyone can’t just start making or selling your invention. A filed provisional application helps to give them that peace of mind. I once was speaking to an inventor at a networking event. She said that she has entered a number of pitch competitions to get investment in her invention. Once she informs the pitch panel that she hasn’t filed a provisional application, interest wanes immediately.

Patents are time consuming. Patents are expensive. But if you’re looking to license or assign your invention, you should look into at least filing a provisional. A provisional costs $130 to file for a small entity with the US patent office. Also, a patent practitioner won’t charge you as much to write a provisional application as a utility application. The company that licenses or is assigned your invention will typically take on the cost of the patent application process after you file the provisional application. So what are you waiting for? File the provisional already!

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