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Selling Your Patent – How Much You Can Expect
Michael J Foycik Jr
by Michael J Foycik Jr.
Septemper 25, 2013

The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

Many inventors have profited from selling their patents.  So how much do they get?  The answers are surprising, or at least they surprised me.

Having talked with many inventors, and also having talked with many corporate patent departments, I've heard many examples.  Let me give you a few general examples, based on published accounts and interviews with public speakers. 

Assuming the inventor has an issued patent for an article and has sold that article through at least one retail store, there will almost certainly be corporate interest.  Vendors often report new products they see when visiting retail stores, which accounts for the corporate interest.  If the corporation makes an offer, it will typically be anywhere from $50 thousand to $8 million, and can be higher. 

On the other hand, an inventor trying to simply market an issued patent to corporations, is likely to get anywhere from $5,000 to $35,000.  This does not take into account the likelihood of a corporation making an offer.  Some inventors hire a marketing service to try to interest companies; such marketing companies usually keep statistics on their success rate, which varies.  I recommend that anyone considering such companies first check out their success rates. 

Or, if going through a television marketing company, the numbers are different.  If that company is of the type that develops and makes the products based on your patent, they may prefer to license the patent rather than buy it.  The royalty rate in such a case might be $2 million per year guaranteed plus a bonus based on sales.   Such agreements may be for two years, and can be longer.  This all varies, of course, depending on the specific company and the nature of the product. 

Here's a very typical experience based on a successful inventor who was giving a public talk at the U.S. Patent Office.  He saw many inventors going to trade shows, winning prizes and drawing much interest, but typically receiving little or no actual offers.  Unless, that is, the inventors could take orders and actually had products they could deliver.  Such inventors typically spend a great deal attending such trade shows, so a cost-benefit calculation should be made before considering this option.  In an example of a successful result, which may not be typical, a distributor may take an interest in the product and offer a royalty.  Typically, such royalties are fairly small, typically between 2 and 9 per cent (though this varies), and there are no guarantees of actual sales.  

What about software-related inventions and patents – are they any different?  Maybe so: some large corporations you've definitely heard of have been buying up software-related patents for significant sums of money.  This will certainly vary tremendously, but at the higher end such significant sums may be in the tens of millions of dollars.  Most readers will have heard of much higher prices for certain iconic companies, but that is for the whole company and not just the patents. 

Where should you start to find out where invention fits in, and what should it be worth?   I would suggest starting with a patent attorney. 

The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.