Patent Licensing is one of the core business models within the intellectual property and product development fields. It refers to the sale or temporary grant of usage of a patent, copyright or trademark. Licensing is considered a passive business model, because it requires less investment and experience than active business models such as the startup model. When inventors have established intellectual property, they have the right to award licenses to companies or individuals who want to use the invention in the patent. Licensing a patent allows companies to share patent rights with the inventor in exchange for royalties. Drafting agreements to share patent rights is a legal specialty within the intellectual property field. Licensing attorneys help to establish fair licensing terms and assure that royalties are paid to the intellectual property holder.

Background

Throughout history, intellectual property has often been treated similarly to real property like homes and land. Licensing is similar to renting a property, rather than selling it outright and is a way for businesses and individuals to earn royalties or rewards on intellectual properties they own. Licensing agreements create a relationship between the inventor and manufacturers, distributors and retailers that are involved in the trade of the intellectual property. By working together with these companies, inventors who choose licensing can often experience wider distribution for their products in a shorter period of time. Traditionally independent inventors pursuing the licensing model would have to choose between patent marketing or invention promotion companies and the extreme costs of working independently. In recent years, demand for licensable patents has turned the tides in the favor of independents with leading marketing resources working strictly through commissions earned when a licensing agreement is reached. This new approach lines up with the real estate field, eliminating the risk and out-of-pocket cost involved in listing intellectual property with a patent marketing company.

For Independent Inventors

Many independent inventors choose the licensing model for their first patent filing. Compared to active development models like the start-up model, the licensing model requires less investment and less experience from the inventor or small business pursuing the product idea. In a licensing relationship the inventor has the benefit of working alongside a well-established manufacturer who covers most if not all of the costs involved in bringing their product idea to market. In contrast to the startup model, profits go to the manufacturer with a fraction of the profit going to the inventor as a royalty. It is no longer necessary to pay patent marketing companies before a licensing agreement has been awarded . The most competitive marketing agencies work on contingency or commission. Beware of companies that follow older invention promotion schemes that require tremendous costs for licensing representation. Typically, these companies will hide licensing costs with patent costs, often using rip-offs of legitimate patent and product development work in order to earn higher profits.

Patent Services USA

Patent services was founded to give independent inventors and entrepreneurs access to mainstream intellectual property services. After a patent is filed, inventors choosing to pursue licensing will have full support from contractors within our network. Licensing services can include tradeshow representation, marketing, website design and product promotion. For projects which clear our confidential submission process, these services can be provided at no out-of-pocket cost. All contractors involved in invention or patent marketing and licensing work on 100% contingency, breaking tradition among patent marketing companies that charge upfront for promotional services.This new approach allows intellectual property holders the opportunity to focus on opening their projects up to broader marketplaces, rather than channeling all of those investments to a marketing agency. We have been pleased by the results. By only working with companies that have agreed to contingency, we ensure that we offer the most motivated licensing agencies available on the market.

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