Steps in Licensing a Patent

Licensing your patent is a method new inventors use to make money faster. You license the patent rights to your invention but retain ownership rights. If you choose not to license your patent, you must manufacture and market your invention yourself to make money. It is often less of a hassle to license your patent to other manufacturers. In patent licensing, there are several types of compensation.

Licensing a Patent

• 1

  You need to create a list of manufacturers that may be interested in your product. To find manufacturers, look through stores and magazines and on the Internet for products similar to your invention. Search through manufacturer databases, such as Thomas Register. You will want to find at least 20 manufacturers that have products comparable to your invention.

• 2

  Prepare a professional marketing letter to the manufacturers in your list, catering the letter their business and products. Ensure the letter looks professional and state that you are willing to sell your patent rights for your invention. Provide pictures of your invention, website address, if any, as well as an explanation how the invention can benefit the company and its consumers. If you have not heard from the company within 30 days, contact it by phone to see if it is interested in your invention.

• 3

  Negotiate your license with the manufacturer. If you lack experience negotiating with manufacturers, hire an experienced attorney. You will need to negotiate exclusive and nonexclusive rights to your product, as well as your compensation. There may be up-front payments, royalty percentages and infringement issues Royalty percentages are a type of payment in which you can retain a certain percentage of profit from your invention. An attorney can help negotiate all the legal implications of the contract prior to obtaining a license for your patent.