Patent Monetize is biggest business model of thriving companies and holders of IP assets. Patents are equivalent to R&D asset, and patent monetization is highly profitable if done properly. Patent monetization is not straightforward; there should be some approach so that the patents can reap the maximum. The post discourses regarding monetization strategies for patents and others which can increase the effectiveness of your intellectual property.
What is Patent Monetization?
Patent monetization refers to the realization of revenues on an invention or a patent technology. Patent monetization can be of the form fluctuating from license to sell-out or patent enforcement activity. It is with an aim to reap the intellectual property as monetary capital earning revenues of the form of direct sale, royalty stream, or payment in litigation.
Monetization of the patent is the privilege of inventors or entrepreneurs who never license but want to benefit from their innovation. Monetization of the patent is a mechanism whereby corporations gain experience on how to have fun with the leverage of their portfolio of patents, print nothing at all but zeros, and sell out patents for dollars.
Monetization of patent strategies
Licensing agreements
Return on highest value patent is through licensing. By means of license, licensor (patent holder) puts right to disposal of use by other party or the company (licensee) in respect of patented invention of him/her in favor of another value object agreed mutually at the rate of royalties. There are two types of licensing prevalent:
a. Exclusive Licenses
b. Non-exclusive Licenses
Exclusive License: Patent rights are given only by license only to licensor and patent owner. Patent owner promises not to rent out to any third party ever. It gives higher percentage of royalty and higher amount of money to licensor.
Non-Exclusive License: Patent is licensed by patent owner under non-exclusive license to various business firms without limiting the licensees. The model provides unlimited streams of revenues from various licensees.
It is patented to the point that the owner of the patent receives passive revenues without divulging such immense business inventions and transactions. Intellectual properties are being sold by patent owners, where they receive revenues based on other individuals’ use of technology via licenses.
Patent Sales
Selling a patent is also a source of income. The owner gives up all rights to the buyer for a large amount of money. Selling a patent can be very profitable if the owner doesn’t mind stopping with enforcement and licensing.
But selling patent implies giving up title of invention and future royalty, if any. Price would be determined by the buyer on the basis of worth of the patent and applications and bargaining power of the buyer. The companies will purchase patents to resale or hold individual collections, hence a proper way of monetization.
Litigation and Enforcement
Their revenues of their patents can be recovered by owners here by increasing statutory right under patent law of infringement by a suit. Or money damages against copying infringement in money damages can be given or recovered by the owner of the patent if so occurs that there is any infringing patent of any business firm or party.
Enforcement of the patent is lengthy and costly but has lower economic return on enforcement of the patent. Owners of profitable patents in industries such as technology, healthcare, and electrical appliances may be offered lower settlements or license agreements on enforcement.
Patent Pools and Aggregation
Patent pools are typical agreements between a set of owners of patents making their intellectual contribution available to third parties on terms similar to these. Surpluses in over-patent-concentrated markets, such as telephony with hundreds of patents employed to make cellular phones, are the norm.
Bundling of patents is gathering the patents in advance to reap their value in bundles. Patent bundling transforms the patents into package licensable and sellable in the future with lower transaction cost and higher bargaining power.
Strategic Partnerships and Joint Ventures
It is applied in the joint ventures where the two companies invest in infrastructure in such a way that they commodity a product with patented technology. Owners of patents do not experience pressure of commoditization because they purchase partners’ infrastructure and their knowledge base via the mechanism of strategic alliance.
Key Things to Remember for Patent Monetization
Patent Quality: Patent value is typically measured in terms of inventiveness, novelty, and marketability. Well-defined, enforceable, legally written and valid claims will render patents of greatest value. Have a healthy, breathing patent portfolio.
Market Potential: Patents of medical necessity or those with widespread industry uses will have more buyers or licensees. Consider the uses and applications the patented technology can be put to.
Cost and Risk: Certain monetization streams such as litigation are costly and risky. It would normally be a question of whether reward potential is equal to cost and risk to reputation.
Patent Valuation: Patent valuation is complicated and may be estimated on the basis of market value, licensing agreement, and relative position. Patent valuation experts are in a position to give a reasonable estimation of your patent value.
Patent development is a good choice to convert intellectual property into an asset portfolio of value, which can potentially generate revenues. The patent holders can utilize the potential of their money agents being maximized by patent offering, litigation, or licensing. This, however, must be done according to the combination of requirements such as patent size of quality, required demand for the same in the market, and accessible finance. A venture capital or independent producer company, there are various choices in which one earns their revenues upon their intellectual properties, and prudent thinking will make the company business or producer so good that the aim of maintaining sustainable success along with value maximization would be reached.
