Maximizing Your Profits Through Patent

Maximizing Your Profits Through Patent

We used to hear how Trademark owners leverage their revenue by monetizing their IP but did you know there are 5 ways that Patent owners can monetize their Patent to maximize profits?

Licensing out non-core patents

Patents are a big capital investment for small or start-up businesses. Before we want to find out what are those none core-patents, the best practice for patent owners is to specify their patents into one of three categories:

  1. Fundamental: Patents are core to your business and have maximum value.
  2. Future patents: Patents that have future value but at the moment your core business is not fully related to those patents but still have value for your future business plan (if any).
  3. Fringe patents: patents that are not related to your business plan and have the least potential.

Now that the patents are specified, you can start planning to license both future patents and fringe patents. Licensing fringe patents also prevents counter-assertion as you will be asserting your patents to companies that are not your direct competitors.

The licensee will pay for the right to hold the license to your patent. This can be a one-off payment, continuous payments known as royalties, or variable payments depending on the profits.

Selling patent portfolios related to non-commercialized technologies

Another way that you can consider is by selling those patents that have been identified as not having value to your company. You won’t lose your competitive advantage by selling these non-core patents because they are unrelated to your main line of business. By selling your patent, you are guaranteed a quick payoff for your idea.

Thousands of ideas are patented each year due to the awareness of the importance of safeguarding your intellectual property (IP), but very few of them result in significant if any, financial gain. You would at least receive some financial compensation for your idea if you chose to sell your patent outright.

Fund-raising with IP

Intangible assets typically represent more than half of a company’s total value. Intellectual property (IP)-protected intangible assets including patents, designs, and trademarks make up the largest class of intangible assets. By controlling the factors that influence IP asset prices, an effective IP management plan improves the ability of the organization to raise capital. In reality, a portfolio of intellectual property assets is typically considerably more alluring than a single asset because it spreads the risk for any lender or investor (such as the collection of patents protecting the numerous technologies and trademarks protecting its brand names).

Improving profitability by combining business models and IP

The company’s ability to generate, possess, market, and sell intellectual property is its key competency. By using this strategy, many new businesses enter the market in technology-intensive industries (such as semiconductors, biotechnology, and nanotechnology). As it enables them to concentrate on what they do best while outsourcing the manufacturing and distributed marketing efforts to other parties, it appears to be a model that may be particularly well-suited to start-ups that have strong technological know-how but lack resources and expertise.

Expand the market and maximize the business profit with IP  

A market expansion strategy that also aims to maximize profit.

Building a business model with a market growth function is recommended for the IP owner. This includes securing IP for the expansion function element of the technology, securing the core technology with IP, and granting IP to a third party. The owner of the intellectual property may now think about facilitating market expansion by offering free or inexpensive licenses. The market will be expanded using this tactic, and the IP owner will also be able to use the contract to control the third party.

If you’re an inventor who is interested to file Patent protection but hasn’t a clue where to start on the application process, we’re here to help. At Exy IP, we provide full consultation as well as drafting, filing and prosecuting Patent applications on the client’s behalf.

This article brought to you by Exy Intellectual Property.