When a large company obtains a patent, it often has the resources it needs to use it. This means that they have a production unit that will create a new product. Or maybe the patent covers a minor improvement to an existing product. In this case, the company will simply incorporate the new component into the assembly process.
However, international conglomerates are not the only ones in obtaining patents. . Some patents are owned by individuals or a very small business just starting out.
What is Patent Broker?
Imagine you have a house you want to sell. In order to save on broker fees, you decide to list the house yourself.
The problem with this approach is that it is quite a lot of work. Despite organizing a house and holding several “open door” events, weeks or even months pass and no one is bidding on the property.
You are starting to worry. It took a long time and money to sell this house, but nothing happens.
A patent broker is like a patent sales agent. They use their business ties to try to sell your patent. This sometimes happens at an auction.
Sounds like a perfect setup, and may work in some cases. However, working with a patent broker is usually not the best option for a number of reasons.
Working of Patent Brokers Do
If you add patent brokerage services, you are legally and ethically required to exclusively protect your interests. The result is that they are much more inclined to close a fair deal.
It is precisely as critical a patent attorney may provide valuable legal advice with regard to the scope of its invention, so that it can be implemented without violating the patent of
How To Work With Patent Broker
Theoretically, patents may be a major asset to impose competition and generate permits. In reality, most patentees do not exercise their own patents or miss only the financial resources to get them on the court. This environment is often patents in more liability than an asset, as they are expensive in their 20-year life to maintain and maintain. So it should be good news for inventors that there is now a growing market to help patents for monetization by selling them in buyers who will implement or label them in their products.
If a patent is a little when selling a house, there is an important distinction between the two: while most houses ultimately sell the right price, many patents will not be independent of the price. A patent is essentially a real estate title granted to its owner to exclude others from practicing the protected invention.
So sell a patent transfer to others the right to assert it or to tackle your own infringement. This means that a non-relieved patent has a small or no value when the industry starts with the invention as there is no value “exclusion”. Since the quality of patents is notoriously inconsistent, recent studies show that more than half of the circulation margins will ultimately become ineffective if they are challenged.
Finally, the sale of patents requires a large part of the technical, legal and business experience. It is therefore of the utmost importance to approach the patent sales process with open eyes and maintain the correct intermediary to prevent valuable errors.
How to Choose Patent Broker
Unlike real estate agents who actively advertise and find consumer feedback easy to find, finding a patent broker can be difficult. There is little regulation and transparency in the patent broker market. Commission coverage varies widely, as do brokers’ success rates, but is difficult to pin down.
Hearing multiple brokers before picking one
Don’t trust your chosen commercial copy broker on their website. Look for brokers that specialize in your industry. Talk to your patent attorney who may have a recommendation.
Getting your comfort level
When interviewing, try to get as much information as possible about your broker experience. Ask for their success rate and past trades they have made that are similar to yours. Check out their many years of experience and any professional licenses or certifications they may have.
Most patent brokers are not lawyers and can enter into a contract, but will not act as legal representative.
Ask for examples of old packages and closed trades
Ask the brokers you interviewed for examples of old packages. This will show how much work they put into marketing patents and presenting them in the best light possible. If your package looks unprofessional or careless, go ahead. Put yourself in the shoes of the buyer and ask yourself if you had received this package if you would have been tempted to buy.
Also ask for examples of closed deals, preferably from your industry. Ask for the offer price, possible sale price and the time it takes to close the deal.
Get an estimate of your selling price and selling time
Once you’ve narrowed down to one or two brokers you are comfortable with, find out how they rate your particular trade before proceeding. There are many factors that affect the value of a patent and the different ways in which it is examined. You should be comfortable with the price the broker thinks your patent will be sold and the reasoning they are using to achieve this.
At this point, you will need to share some information with the broker in order to get a reliable price estimate. In addition to information about your patented invention, they need to know things like:
- If someone infringes your patent today and you can prove it, it will affect the costs. This is attractive to some buyers as they will pursue the offender for damages after they purchase the patent.
- For other buyers, this can be a negative issue if they plan to use the patent themselves and know that competition in the market is already active. And sometimes the intruder himself can be a potential buyer. In any case, if the breach is a factor your broker should know.
Understanding the fee and commission structure
It is very important to understand how fees are calculated. In many cases, the broker will make more money selling your patents at a higher price (e.g. by selling a house). However, you should know how much the broker is spending and if there is a limit to these costs. As a seller, you also need to understand how long the broker’s representation takes to avoid paying commission. Many brokers may ask for a commission or interest in advance to cover their expenses. Often times, fees range from $ 5,000 to $ 15,000 for small patent portfolios.
Be ready to sell yourself
There is nothing more important to a patent holder than being ready to sell not only yourself but also your portfolio to a potential broker. As strange as it may sound because you think they are happy to welcome everyone’s interests, brokers who lead the industry can often be quite picky as their sales figures are twice as high as others on the market.