How to sell patent rights
How to Sell Your Patent
cash right cash talks are you looking to
sell your patent you want to hear about
how you can make money with patents hey
everyone I'm JD Hooven ER USPTO patent
attorney CEO and Managing Partner here
at bold patents law firm today I'll be
talking about selling your patent and
getting you everything you need to know
about moving it forward
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today I'll be sharing with you five
steps about how to make money with your
patented product the first step of the
process is identification of the parties
now when you're looking to sit out at
the table and negotiate a patent sale or
patent license you have to know who
you're dealing with if you're an
individual inventor and you're sitting
across the table from another individual
that's looking to acquire the rights
it's very straightforward but things get
complicated quickly if they're a company
and if that company has many moving
parts you're going to want to know who
will have rights to make use sell or
import your invention and how much of
its can be licensed or sold and now it's
time to consider what the party's
intentions are the party a which is the
one giving up their patent rights and
party be the one receiving them in the
contract you've got to lay it out
clearly what the goals are and what the
what is being conveyed right this is a
transaction the party giving up their
patent write needs to say exactly what
is being granted in a patent you've got
the ability to grant the ability to make
it to use it to sell it in to import it
okay and depending on how many countries
we're talking about this is a lot of
different rights and so clarifying who's
giving up what and who's receiving it is
also in part of this the major part of
the patent sale after the parties and
tensions are clear and we already know
who the parties are now has talked about
the actual rights themselves what is it
that you own in the contract you're not
going to want to specify the whole list
of claims that are listed in the bottom
of a patent in the top of the contract
what you want to do is instead is say
look at Exhibit A or C Exhibit A in the
exhibit down at the bottom of the
contract will identify the patent number
the patent applications that may be
pending and the whole portfolio that's
being conveyed from there each party
will want to inspect each of those
identified to make sure that those are
indeed the patents publication numbers
serial numbers and dates that are
associated with the conveyance
the actual rights aren't gonna be listed
in the contract at all you want to make
sure that you look at each of those
exhibit references at the USPTO gov to
make sure those claim scopes of
independent and dependent rights are as
you've specified and negotiated for the
next step before you move on to the
purchase statement which of course is
probably what you're all hoping to hear
about is the money part of the contract
you've got to talk about the prior or
existing licenses these are conveyances
right transactions at the party a who's
giving up rights may already may still
be under the obligations for right if
you're one trying to license your right
to party be its party bees job to make
sure that you are getting that they're
receiving the full amount of that right
if you have actually licensed your
invention out to a to someone else in
the past or you're under an obligation
to assign your patent to another company
that needs to be cleared up right up
front if the party bee is gonna be a non
exclusive licensee that needs to be
cleared up upfront as well in the
contract that means that they're not
going to be the only one that gets to
make use or sell the invention they're
gonna have competitors built-in now
whether those competitors are actually
only to market or not is irrelevant it's
that they could enter the streaming
market against them in competition and
in that scenario just painted for you
it's gonna likely decrease the value and
help them party be the one receiving it
negotiate down the royalty or the lump
sum payment all right so now it's time
to talk about price right this is the
part the contract that everyone probably
Scrolls down tunes okay how much and
you're right
this is key this is probably the most
important part of the negotiation
process what's at play here is the money
in terms of lump sum what's received
upfront and what's potentially received
over time or including contingency
payments contingency payments are when
you see receive money via royalty if and
when a product is sold these are terms
that get negotiated
patents can be sold out right for a lump
sum payment tour there's no license at
all it's being sold or the purchase
price can be one that's paid for over a
several quarters or years or contingent
upon certain activity up to an including
sale something else to include here in
purchase price is to make sure it's not
just about the revenue you've got to get
more specific are we talking about gross
revenue or net revenue that's a big
difference
it's easy to calculate gross revenue so
that's how most deals are done if we're
doing net you've got to really get into
the business and see what expenses are
at play to calculate this properly last
but not least once you've negotiated the
purchase price and all the other terms
of the agreement now it's time to record
it with the US Patent Office recording
an assignment or license is important it
helps to publish the information so that
any other competitor or folks that may
need to look at this later in a
litigation will have the record
preserved it's also useful for making
sure that deals get done and it's a
clear a clear transparent transaction
towards there's no no third party that's
going to be left out of the loop this is
something that both parties agree to and
it's not going to be a private
transaction it's for all their customers
and all the folks that may need to see
this after the fact look it up online in
the public USPTO database all right
we've had fun we talked about how to do
a patent sale transaction and what
you've got to think about in order to
make that happen we talked about how
each party has their own intentions and
how they need to be articulated right up
front in the contract how it's no joke
that you've got to make sure you do your
diligence to make sure the patents that
you're buying are indeed contain the
claims that you hope they do then make
sure you've done the diligence as well
to put down in writing the price point
okay is this going to be a royal tea
payment lump sum payment or a
contingency based on some other activity
or performance later on and make sure
before you close up that agreement
before you both part ways that you've
record the document with the USPTO so
that's clear and transparent for all
third parties later now you know how to
make and
a transaction right this is the the
finish line you've done all the hard
work of researching applying for getting
your patent granted and now you've made
some money with it congratulations
thanks for watching I'm JD Hooven or
managing partner and CEO here at bold
patents law firm have a great day
everybody go big go bold
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