Presenting a Patent for Sale to a Company

!±8± Presenting a Patent for Sale to a Company

Typically, these companies also claim that they can patent your idea, which is impossible. (Any competent patent attorney will tell you that only an invention can be patented, not a mere idea.) However, even the sharpest inventors tend to be drawn in by these seductive promises. While it might seem logical to attribute this to laziness, that does not seem to be the case. Inventing is tough, diligent work. The more likely explanation is that inventors are not familiar with the business side of patents and these companies seem like a smart way to go.

In fact, inventors with patent ideas can bypass this chump's game and do most (if not all) of their patent sale presentations themselves. All you need is some knowledge about how companies evaluate patents and how to emphasize the benefits of yours. With that in hand, you will be primed and ready to go out and sell your patent to a buyer.

First, you need to decide how you want to sell your patent. Your two choices are to license your patent or to assign it. Essentially, licensing your patent lets you retain the underlying rights but grant someone else -- the licensee -- the right to make something based on the patent. In exchange, you get royalties and whatever performance obligations you write into the license agreement. Assigning a patent, on the other hand, is an outright transfer to someone else, after which that person is the sole, exclusive owner of the patent. (Read our in-depth article on patent licensing for more information on both options.)

Once you have decided whether to sell your patent via licensing or assignment, the next step is to determine which company you should be making your pitch to. For example, the inventor of a new, lighter and more durable bicycle tire might assume that he needs to talk to Wal-Mart or the Sports Authority. In reality, he wants to speak with companies like Huffy or Schwinn, ie, companies who make and manufacture bicycles. They are who would be most likely to buy your patent, since it coincides with their existing line of business. It's what those in the business call a "natural fit."

He might even want to go further down the chain and approach the company who creates bicycle tires, if this is a different company. The closer you can get to the physical implementation of your idea, the more likely it is that your presentation will be favorably received.

The reason for this is simple. The higher up you go, the more layers your idea will have to pass through until it reaches the people whose lives will be concretely affected by it. Not only that, but other people will not present your idea with the energy and enthusiasm that you will. The importance of narrowing down the list of companies to make your sales pitch to in this way cannot be stressed enough.

Once you identify the company you need to speak to, you need to work on what you will say to them. To keep our example of a new kind of bike tire; you want to emphasize to the tire manufacturer why your design of tire is superior. Beyond that, you want to demonstrate why the company needs to use your design. For instance, you might want to include in your presentation a survey where 75% of respondents said that shoddy bike tires are the reason they do not buy new bicycles. The idea is to focus on benefits to the company, rather than hype and self-promotion. This is what will make them eager to buy your patent and put it to use in their products.

Once you have prepared a clear, benefit-driven presentation, the final step is to make the pitch. Generally, you will find a business development mailing address or e-mail address on the company website. Just send them a short, to the point note saying that you have a business proposal you would like to discuss. Make sure you include enough details to get their attention, but not so much that your note becomes a novel.

Above all, maintain confidence in yourself and your patent. If you have carefully though things through, you can indeed sell your patent on terms that are favorable to you and your future prospects.