Introduction
Patents are a valuable asset and the best way to monetize it is by licensing it. Offering another entity, the rights to make, use or sell a company’s product is called licensing. There is a need to realize the maximum and efficient value of your assets in order to increase patent revenue. Also, a unified institution that can ensure patents are protected legally and recognized is necessary. Only when you know the value of your patents, would you be able to make use of it appropriately and generate revenue. Finding the value of IP can help you make significant business decisions that can alter your entire business trajectory and help in creating larger patent pools.
Patent pools are a type of partnership of two or more companies who have agreed to cross-license patents. These patents are available to the licensees and the licensing fees are shared among parties based on each patent’s value.
Many industries need patent pools to function and avoid business risks and generate profits. For example, the automobile industry shares patents to standardize components.
Ways to Increase Patent Revenue
1. Licensing and commercialization:
One common way to generate patent revenue is by licensing the technology to other companies and businesses. This can include licensing the full patent or entering into a joint venture to commercialize the technology being used. In this process, the inventor retains the ownership of the patent as well as earns payments on each sale of the product made by the licensee. Moreover, licensing rights can be granted to more than one company. If licensing rights are sold to a big company, it will also increase the perceived value of the patent.
2. Litigation:
If another company is found to be misusing your patent, you can take legal action to stop the infringement and seek a refund for any revenue you may have lost during this time period.
3. Selling patents:
Another way to generate patent revenue is to directly sell the patent to another company. This is a good option if a company’s portfolio of patents is well known and they want to monetize their IP. One of the main reasons why companies do this is because they have to pay maintenance fees on patents over their 20-year lifespan. Companies that have thousands of patents might find it a wise idea to sell off those that aren’t making them money or if it doesn’t align with their business goals.
4. Remove Low Quality Patents:
Companies should analyse their entire patent portfolio. Remove low-quality patents. Once a company assesses all the low-quality patents, it can decide which ones could be sold without affecting its bottom line. They can be sold to startups that are still working in the same domain and might be able to find some uses with it. This will again generate revenue for the company.
5. Strategic partnerships:
Partnerships with other companies are another way to generate revenue from patents. Strategic partnerships with other companies to jointly develop a new technology can be developed and revenues generated by the resulting patents can be shared.
6. Government funding and grants:
In some cases, government grants and funding can be used to support research and development, which can lead to new patents and revenue.
It’s important to note that generating revenue from patents can be a complex and time-consuming process, and it may be helpful to work with a patent attorney or IP strategy consultant to maximize your revenue potential.
Patent Licensing and Search for New Markets
The success of a patent licensing program depends on several factors such as market size, industry growth rate, and the level of innovation in technology. To increase patent revenue in new markets, it’s important to identify key industries that are experiencing rapid growth due to a high level of innovation and have a large number of potential licensees.
Divestment and licensing strategies allow the patent owners to determine how their patents will be utilized. If their portfolio affords broad patent protection, then the value of the technology is high. Valuing patents can be performed in a number of techniques, both quantitative and qualitative. Qualitative analysis helps in determining the scope and strength of the patent rights. On the other hand, a quantitative analysis leverages these findings to assign a monetary value to those rights.
Patent Marketplaces
Patents can be sold off in marketplaces by advertising on these platforms. While some are free, many of them charge a fee. Marketplaces are mainly online platforms where one can buy and sell patents. IP Marketplace, Inventorhaus Inc, and PCTXS.com are some free platforms. IAM Market, Yet2.com, IPNexus.com, and IdeaConnection are some of the paid platforms.
Key Industries as sources of new Patent Pools
1. Artificial Intelligence:
AI technology is rapidly evolving, and there is a growing demand for AI-based products and services in many industries, such as healthcare, finance, and retail. It is necessary to sell patents in the latest evolving and growing industry. If you have a patent that is in the AI/ML top niche, it is the right time to sell it. When you hold a patent in an area where there is a lot of innovation happening, you will find a lot of buyers. ResearchWire will tell you the right value for your patent.
For example, computer systems that were based on biological models were the fastest-growing technology patent category in 2021, it rose by at least 67%.
AI recorded the highest annual average growth rate of patents filed between Q1 2018 and Q1 2022. According to GlobalData’s Patent Analytics, the growth of 28% was primarily related to developments in machine learning models, speech recognition, image analysis, and natural language processing systems.
2. Fintech-related patents:
filed grew on an average of 6% across this time period. The fintech industry’s research areas explored payment architectures, e-commerce, and cryptography.
3. Cybersecurity:
registered an annual average growth rate of 4% between Q1 2018 and Q1 2022, with China’s tech giant Huawei standing as the top filer. Most of Huawei’s patent inventions are related to security arrangements to protect computers against unauthorized activity, verifying user identity or authorization, and 5G security.
4. Internet of Things (IoT):
IoT technology is becoming more widespread and is being integrated into a growing number of products, including home appliances, automobiles, and wearable devices.
5. 5G Network Technology:
The launch of 5G networks is expected to drive growth in many industries, including telecommunications, automotive, and healthcare.
6. Virtual and Augmented Reality: Virtual technologies are being used in a growing number of applications, including gaming, education, and retail. This sector is more likely to grow and potential buyers of patents will be visible soon.
7. Healthcare:
Healthcare technology is rapidly evolving, and there is a growing demand for innovative healthcare products and services. This includes areas such as telemedicine, personalized medicine, and medical devices. Today, skin diseases can be detected through AI-patented tools, and dermatologists and patients are benefiting from such tools. Buyers of such patents are growing at a fast rate in this sector too.
8. Power and Utilities sector:
GlobalData’s Patent Analytics states that an average annual growth rate in patents increased to 14% between Q1 2018 and Q1 2022, with the highest share in power generation using solar-based technologies.
9. Retail:
The Covid-19 pandemic has made this sector develop new methods of approaching customers including online retail, delivery robots and supply chain analytics, which have boosted growth and business revenue.
How to Attract Potential Buyers of Patents
The key to generating revenue from patents is based on the success of a marketing strategy to attract buyers:
1. It is necessary to represent the patent in a short, easy-to-understand manner that clearly helps the buyer understand the value of the innovative patent.
2. Use of visual, audio, and video modules are useful to explain the invention.
3. Hire IP firms that know the right strategies that you can use to share how your invention can affect their business positively.
4. Look out for Independent Inventors, working with small teams independent of any business or company. These inventors look for buyers to purchase or license their patents. It is also a chance for businesses to get patents at a reasonable price since the inventors know that their invention has a sell-by date and keep filing patents in their niche.
Conclusion
It’s important to note that the success of a patent revenue program depends on effective marketing and licensing strategies. A company has to identify key partners and negotiate licensing agreements that provide value to both parties. Additionally, companies need to invest in marketing and outreach programs to raise awareness of their patent portfolios and attract potential licensees.
In this context, it is necessary to conduct a careful analysis of the company’s patent portfolio. The process of analyzing a company’s patent portfolio is called patent due diligence. It audits the quantity and the quality of IP assets owned by or licensed to a company, business, or individual. The assessment also includes how intellectual property is captured and protected by the business.
A business’s patent selling strategy should be based on business objectives. By having a solid patent strategy, a viable product, and the right kind of business advice, you can get good returns from your invention and earn more income by selling or licensing it too.
If you are looking for end-to-end intellectual property services, Researchwire, a leading Technology and Intellectual Property consulting company can become your one-stop solution provider. Our team of highly experienced IP experts and technologists allows us to gain a superior understanding of your industry. Researchwire’s patent monetization services help inventors and businesses get the right deal for their inventions. We analyze Patent data, R&D data, Market data, Product data sheets, and Technology blogs to provide a complete picture of the technology development stage.
