Commercialize Your Invention
Patents have the potential to significantly increase your profits from a product. By obtaining a patent, you can limit the number of companies that can sell the patented product, creating a scarcity that drives up its price. When the supply is low, you become the sole supplier, enabling you to sell the product at a higher price.
However, it’s important to understand the limitations of patents to avoid making costly mistakes. Here are seven pitfalls to consider:
Pitfall #1: Not a Monopoly
A patent grants you the right to exclude others from making, using, selling, offering for sale, or importing the patented invention. However, it does not give you a complete monopoly. Other patents might still exist that you could potentially infringe upon, even if you have your own patent.
Pitfall #2: Weak Market Demand
A patent does not guarantee market demand. Consumers must want the patented product and be willing to pay for it. Without strong demand, even the best patent cannot generate revenue.
Pitfall #3: Small Market Size
For a patent to be profitable, the market size needs to be significant. You must have a large number of potential customers to make money from your invention.
Pitfall #4: Competitive Alternatives
Competitors may develop different solutions to the same problem your invention solves. If their solution is as desirable as yours but offered at a lower price, consumers might choose the cheaper alternative. This can lead to lost sales and decreased profits.
Pitfall #5: Weak and Narrow Patents
Not all patents offer the same level of protection. The breadth of patent protection depends on the claims outlined in the patent. Narrow claims make it easy for competitors to design around your patent and offer similar products without infringing.
Pitfall #6: Expensive Patent Litigation
Enforcing your patent rights can be costly. It requires time and money to engage in litigation. However, if your patented invention becomes popular and profitable, the profits generated could fund the litigation.
Pitfall #7: High Startup Costs
Manufacturing and selling a patented invention involve significant upfront costs, such as creating molds, building a website, renting space, hiring employees, and establishing a distribution network. These expenses can be a barrier to entry for many inventors.
Market Invention as Patent Pending or Patented
One effective strategy is to use your patent as a marketing tool. Highlighting that your product is patent pending or patented can enhance your reputation and deter potential competitors. It demonstrates that you take your intellectual property rights seriously.
Sell Your Patent Rights
If you’ve successfully developed and sold a product based on your patent, you have proven the concept and market demand. This provides an opportunity to sell the revenue stream built around your invention. Selling your patent rights can be lucrative, especially if you’ve built a profitable business.
License Your Patent Rights
While licensing your patent can generate income, it requires more than just having a patent. Building a portfolio of patents, specialized knowledge, or industry connections can increase your chances of success. However, licensing deals often arise from litigation or specific business needs.
Route 1: Police the Market
If you notice a competitor infringing on your patent, you can send a cease and desist letter. Litigation may follow, and a license agreement could be reached during the legal process.
Route 2: Cross License Deals
Cross-licensing occurs when both parties offer each other licenses to their respective patent portfolios. This often arises from lawsuits where both sides choose to settle and peacefully coexist in the marketplace.
Route 3: Actively License or Sell Your Patent
Some companies have procedures to consider external ideas. However, they may require you to have a patent application filed to protect your idea. Simply having a patent does not guarantee licensing success; additional expertise and proof of concept are typically necessary.
Route 4: License Outside Your Vertical Market
If your patent covers a broader scope than your specific market, you can license it to others in different industries or niche markets.
Remember, generating significant income solely through patent licensing is challenging. It requires substantial effort, investment, and a deep understanding of the market.
By understanding the nuances and limitations of patents, you can navigate the patent landscape more effectively and increase your chances of success.
For more information on patents and intellectual property, visit Garrity Traina, a trusted resource for all your legal needs.
