As a well-known real estate broker in the Greater Los Angeles Area, a big-ticket sales organization with a long track record of success in rights negotiation and sales transactions over $1 million each. Our team is today expanding to use that sales power to help patent owners achieve desired goals for DeFi and other modern patents. Using the knowledge and experience of our blockchain-oriented sales team, trained by ASCAP and BMI, and proven successful with years of media rights negotiations, we get patent rights and licenses signed and paid for by some of the largest DeFi and tech companies in the West Coast. Call 213-880-9910 to discuss desired terms, and our team will start selling, signing and collecting license fees quickly, profitably and with less hassle. license@entar.com
Patent Licensing — A patent licensing agent represents an inventor’s product
- Patent Industry Is Complex
- The Importance of Patenting
- Manufacturing Versus Licensing a Product
- Proving a Product’s Value
- Licensing an Invention
Patent licensing involves an inventor’s product, which needs to be matched to companies that will license the invention in exchange for royalty payments. The business of patent licensing came about when Walt Disney created Mickey Mouse. As the character’s popularity grew, a businessman paid for the rights to put the cartoon’s image on pencil boxes. This was the first time intellectual property was licensed to another person for profit.
Patent
Inventors often hire different specialists for the various types of assistance needed throughout the process. No companies exist that can handle the comprehensive patent process from start to finish. Therefore, inventors must develop relationships with:
product scouts
patent licensing agents
licensees.
Agents seek licensees, or companies who are looking for products to license and sell. Product scouts are individuals who look for new products for the corporations they serve as clients.
The Importance of Patenting
Inventors take steps to ensure that product scouts and licensing agents take their creations seriously. These professionals rarely work with untested, raw ideas that have not yet been patented. Experts suggest that inventors do not seek a patent licensing agent while you’re still in the idea stage. Ideas don’y have value unless the inventor does something to add value to the idea. An agent or scout may invest substantial energy and time in an invention, thus they want to make sure that it’s possible to license the invention.
When is the right time to hire a licensing agent? Must the inventor pay out-of-pocket fees? These fees average $1,000. These costs usually cover:
travel
research
communication
copying.
The agent will also receive up to 50 percent of royalties paid for the patent over its life span. Remember that most licensing agents receive more ideas than they can ever license. This means the inventor must be proactive in convincing the patent agent to license the invention. Moreover, the inventors must ensure that the patented product stands out.
Manufacturing Versus Licensing a Product
Should an inventor manufacture the creation rather than license it out? If so, they will need to invest substantial time and money in both national and international marketing. Those who take this route must first:
create a manufacturing business plan,
have product liability insurance, and
earn capital to finance the production of their inventory.
You’ll also need to identify partners such as industrial designers, agents, engineers, and marketers.
These costs can run into the hundreds of thousands of dollars. Large retail stores typically work with vendors who sell more than one product and typically take 90 days or longer to pay their vendors. Inventors need to be willing to put their financial security on the line and have the manufacturing and marketing skills to produce and sell a product successfully. Strive to minimize this risk and maximize your reward through licensing.
Proving the Product’s Value
An invention’s success is directly tied to how hard the creator is willing to work. While the patent is pending, the inventor will need to prove that it’s an excellent idea with value. Licensees are looking for products that have a competitive advantage over other products that already exist in the marketplace. For example, the product should be:
less expensive to produce,
be cheaper to ship,
make a higher profit, or
sell more units.
Develop an executive summary that expresses the product’s competitive advantage to potential licensees. Think of inventing as a business rather than a dream to get the creations on the path to success.
Licensing the Invention
Licensing means to give another individual or company the exclusive right to use, market, or create your invention in exchange for profit. The inventor typically receives a portion of the licensing agent’s net profit from each sale.
Most licensed inventions are covered by patent protection. The rare exception may include a product that has a secret ingredient or a process not disclosed in a patent application. Toys also tend to be an exception, since the life span of the typical toy is much shorter than a patent period.
The inventor must find the right company to license the invention. Research the desired industry to find a company with a strong brand and resources to devote to your product.
For those who would like help with licensing a patent, post the job on Entar Patents marketplace. Entar works with experienced patent holders, patent attorneys and agents.
Copyright
Patent
Trademark
Trade Secret
Licensing
Other IP
A licensing agent is a patent agent that is licensed by the United States Patent and Trademark Office (“USPTO”) to assist individuals in all areas of the patent application process. Licensed patent agents in specific jurisdictions can be found at http://www.uspto.gov/. A licensed patent agent can assist with the application process but cannot represent an individual in court, should the need arise. Patent agents have backgrounds in areas such as electrical engineering, chemistry, mechanical engineering, pharmacology or some other science.
Why Use An Agent?
Patent agents are often highly specialized in a particular field of patent law and are decidedly less expensive than attorneys. Patent agents frequently have as much knowledge as patent attorneys when it comes to filing the patent application, and the outcome with a patent agent is generally just as good as with an attorney for applications that are relatively straight-forward and do not require any litigation or court time.
Attorneys As Agents
A patent attorney can serve to both assist during the patent application process as well as represent an applicant in court if the need arises. Patent attorneys tend to be specialized in patent law and generally can be a valuable asset during the entire application process. If any litigation need presents itself, having an attorney on hand who has intimate knowledge of the case can be the difference between success and failure with the United States Patent and Trademark Office (“USPTO”).
Agrent Agreements
As with any relationship where confidential information will be exchanged, patent agent agreements should include a non-disclosure provision to protect the intellectual property of the inventor. Agent agreements should also stipulate the nature of the agent/inventor relationship, disclose pricing agreements and set a timeline for the filing of an application. The agreement should also stipulate that in the event that a matter concerning the patent goes to trial or needs to be litigated, the patent agent will not be able to assist the inventor and the inventor will need to hire a separate attorney.
Invention Marketing Scams
If it sounds too good to be true, it probably is. Many marketing firms advertise that they are in the business of marketing products on behalf of inventors; however, these businesses are often nothing more than marketing scams. The reality is that these “marketing firms” will require high monthly payments in exchange for their “marketing services” or will require an upfront fee followed by payment installments. The statistics show that such firms do very little, if anything, to actually market the products of investors, and boast a success rate of less than 1% overall. To avoid marketing scams, make sure to only utilize the services of reputable industry professionals, and be weary of businesses that promise you huge result for a low monthly fee.
WE HELP INVENTORS BETTER THEIR CHANCES OF SUCCESS!
Unlike others in this industry we put market research ahead of patenting and marketing.
Our cost-effective Market Research Report provides an inventor invaluable feedback and advice and/or interest in the product from industry experts, distributors and retail buyers. This information can be used to make changes or refinements to the product that could improve and better your chances of success.
Instead of spending tens of thousands of dollars on a raw untested idea, the alternative and inexpensive non-provisional patent application and/or trademark protection will allow you to use “Patent Pending” during development, refinement and market research stage.
Contact Invention Licensing Agent First!
STARTING YOUR OWN BUSINESS – MANUFACTURE AND/OR DISTRIBUTE BY YOURSELF.
Been there, done that and we can certainly help you do it too!
In the long run, you may make a lot more money this way. If your invention is a big success, your rewards could vastly exceed the royalties you could expect from any licensing agreement. If you have decided to build a business to manufacture and distribute your own product, you will need the services of many experts including strategic marketing and distribution specialists.
Licensing your product can be a very necessary aspect of bringing it to the market and profiting from your time, effort, and money spent. Having personal experience in this aspect it may be the best option for you as long as you understand it.
There is no one as close to your product as you are and no one as sincere about it as you are. The best advice anyone can give is to tell you that you are the best source of gaining a license agreement. This is not only our advice but many of the oldest and most experienced companies in the business. Entrepreneur Magazine, Entrepreneur.com, Inventors Digest and many others offer the same advice and it is good advice.
Licensing a product is the best option when it is difficult to manufacture and market it because of financial and logistical reasons.
An attorney or licensing agent will always want an up-front fee with no guarantee of success and will want approximately 30% of the royalty. You are the best advantage you have in licensing your product.
The biggest problem is YOU DON’T KNOW HOW TO DO IT.
Now that is right to the point isn’t it?
How to Licence Your Product
First – have a real physical product ready to show them. If you don’t have that then a quality drawing with an NDA or Confidentiality Agreement must be signed before you talk to anyone. (We can provide one for you) A real product is preferable however a quality CAD drawing would be much more impressive and would help your position.
Second – have your product protected through a patent pending. If you don’t have a patent pending it is possible they may pay for it as they will own the rights to the idea if in fact they have an interest. However without a patent being filed the value of your position is greatly weakened. It is much better to come from a strong position opposed to a weak one.
Third – once they have evaluated the idea or product an Executive Summary will become the caveat to the presentation. As with any sales person you need to have a quality constructed presentation.
Your Executive Summary:
These are 10 of the typical categories that need to be covered. It requires solid research and has to make sense. Having a Summary means it can be used many times over for many different prospects.
Show the competitive advantage over what already exists
Will it be less cost than the completion and if not why would they buy yours
How will it take the market share from the competition
Will it cost less to ship
Is the market larger or smaller or the same as the competition
Will it produce a higher profit margin for the buyer and retailer
According to the market size what would be the volume of sales per year
Is it easier to manufacture and will it cost more or less
Will it be the same or higher quality
Lead times and shipping information is critical in the final decision
Product Licencing Help
The Mars Rising Network has provided inventor services for thousand of inventors like you. Our team of experienced professionals can help you through the product licensing process every step of the way.
We will set up a professionally constructed and comprehensive Executive Summary with all the information a company will need to see.
If you take your first steps carefully and inexpensively you don’t have to spend that much to achieve this goal.
Patent Licensing
Patent licensing may come about in different ways, and patent licenses can be classified as exclusive or non-exclusive.
Patent Licenses
A patent grants its owner the right to exclude others from practicing the patented invention, and it does not give the patent owner the right to practice the patented invention. Licenses should be understood in this context.
Exclusive license: Under an exclusive license, a patent owner transfers all indicia of ownership to the licensee only retaining the title to the patent. From the point of view of the patent owner, he surrenders all rights under the patent (including the right to sue for infringement and the right to license) to the licensee. In essence, the licensee steps into the shoes of the patent owner and acquires the right to sub-license the patent and sue for patent infringement. However, the exclusivity can be limited by a field of use. That means that the licensee gets a promise from the patent owner that the patent will not be licensed to anyone else in a stipulated field of use.
Non-exclusive license: By granting a non-exclusive license, the patent owner essentially promises not to sue the licensee for patent infringement. Some people think that by acquiring a non-exclusive license the licensee acquires the freedom to operate in the space protected by the licensed patent, but this may or may not be the case. It depends on whether or not the licensee’s products infringe other patents.
Patent Licensing
One needs to look at patent licensing as either “carrot” or “stick” licenses as in the “carrot and stick” analogy.
Carrot License. A carrot patent licensing approach is appropriate when the prospective licensee is not practicing the patented invention and is under no compulsion to take a license. The value proposition here is “my patent technology is better and by licensing it you will sell more products.” Or it may be “my patent technology is cheaper and by licensing it you will make more profit.” Convincing a prospective licensee to take a license is strictly a marketing exercise.
Stick Licensing. On the other hand, a stick patent licensing approach is applied when the prospective licensee is already using your patent technology and, thereby, infringing your patent. The value proposition here is “take a license or else… (I will see you in court).” One needs to keep in mind that every “carrot” license is really a “stick” license in disguise. After all, if there were not the unspoken threat of litigation, who would ever license a patent? When a larger company agrees to license a patent, payment for the patent is usually a lump sum payment that includes past use of the patent (if applicable) and future use of the patent based on the estimated sales of the accused product over the remaining life of the patent.
More about Patent Licensing
For a more in-depth discussion of licensing see “Essentials of Licensing Intellectual Property” by Alexander Poltorak and Paul Lerner.
Intellectual property licensing is one of the most crucial income drivers among inventors and high-tech companies. A strong licensing agreement can increase the value of your intellectual property – not only as a result of immediately recognized revenue, but by increasing the apparent worth of your IP for future sale. Similarly, licensing a key patent or set of patents can open a wealth of opportunities for you to improve your products and capture greater market share. Finding and securing the optimal licensing deal is not a straightforward task; beyond simply finding the right licensee or property to license, there are countless legal concerns that must be considered.
Patent Licensing Transactions
Entar Patent is perfectly situated to help inventors navigate the perils of patent licensing transactions. Our network of contacts and exposure to many different technologies by way of our patent landscape analysis projects ensure that we can help you find the best possible fit for your intellectual property. Should you be searching out a potential licensee, we will leverage our contacts to connect you with qualified, motivated buyers; conversely, our team of technical experts and engineers identify the most beneficial patents for a portfolio, and act as an intermediary between the patent agent and the patent holder.
Competitive Intelligence and Market Analysis
Once the potential deal has been identified, Entar Patent can help to get the most value possible from the transaction. With our experience in IP valuation, we can help negotiate the best deal on your behalf, so that you come away from the transaction secure in the knowledge that you’ve gotten a fair market price for the technology in question. We back our appraisals with extensive technical competitive intelligence and market analysis; historically, our valuations track very closely with actual sale prices of patents and portfolios at auction, so inventors can rest comfortably knowing that our assessment is one of the most accurate you can find. Once you’ve decided on an investment, Entar Patent will continue to help facilitate the patent licensing transaction, ensuring that your deal doesn’t get bogged down in a quagmire of legal issues.
Patent Broker Fees: Everything that Inventors Need to Know
The patent brokerage industry is not heavily regulated and there is a wide range of service approaches and fee structures.
- What are Patent Broker Fees?
- Know When to Sell
- The Role of the Patent Broker
- Finding A Patent Broker
- Understand Buyer Types
- What Makes a Patent Sell?
- The Sale Process
- Patent Auctions: The Final Option
What are Patent Broker Fees?
Patent broker fees can range from a few thousand dollars upfront to a “success fee” of as much as 35 percent of the transaction depending on the specific broker and the deal. The patent brokerage industry is not heavily regulated and there is a wide range of service approaches and fee structures. Knowing what a broker will and will not be doing and ensuring you have the same understanding of the goals and terms of the sale upfront is critical to success in working with your patent broker.
Know When to Sell
Many patent holders overlook their patents as a salable asset. For a patent with sales value that a business is not using, it is a good idea to evaluate whether or not to sell the patent. Patents lose their value over time and sometimes reach a point where it is not worth paying the fees to keep them valid.
Many factors will play into whether it is time to sell. If there is a business infringing on a patent you are not using, it might make sense to consider trying to sell them the patent. Or if you see a new business entering a market for which you have a patent that might be useful to them, this might also present an opportunity. If your business is ceasing operations you might have competitors who would want to buy your patents.
The Role of the Patent Broker
Patent brokers match buyers of patents with sellers, negotiate between them, and assist to close the deal. Some patent brokerage firms also perform patent valuations and can help to determine your patent’s market value and licensing potential.
One of the main values that the patent broker brings to the transaction is relationships. By knowing who is active in the marketplace, the patent broker can filter the transaction, matching sellers and buyers more effectively than they could on their own.
Most patent brokers represent sellers. In a sale scenario, the seller’s broker analyzes the patent(s) to be sold, prepares marketing material, contact prospective buyers and facilitates the sale. The broker’s knowledge and expertise should, in an ideal world, help the buyer to get a sales price that more than justifies the broker’s fees.
Some brokers represent buyers. Often this is because the buyer wishes to remain anonymous. Additionally, many buyers rely on a broker to save them time by bringing them only the best potential purchases.
There is no regulation that prevents patent brokers from representing both sides of the transaction, and it does happen but is generally frowned upon due to the high potential for conflicts of interest.
Finding A Patent Broker
Unlike real estate brokers, who aggressively market themselves and for whom consumer reviews are easy to find, tracking down a patent broker can be challenging. There is little regulation or transparency in the patent broker market. The range of fees varies widely, as do broker success rates, but it is hard to find this out.
Interview Several Brokers Before Choosing One
Do not choose a broker solely based the sales copy on his or her website. Run searches for brokers who specialize in your industry. Speak to your patent attorney, who may have referrals to provide. Assemble a list of at least 3-5 brokers and schedule time to meet with each for an in-person or phone interview to get a detailed sense of their background and their approach.
Getting a Comfort Level
In your interviews, get as much information as you can about a broker’s experience. Ask about success rates and about past deals they have handled that are similar to yours. Understand their years of experience and any professional licenses or certifications they may hold.
Most patent brokers are not lawyers and can broker a deal but will not serve as a legal representative. Understand from the brokers they interview how they work with the attorney in the transaction (or if they are one).
Ask for Examples of Old Packages and Closed Deals
Ask the brokers to share examples of old packages. This will show how much work they put into marketing the patents and presenting them in their best possible light. If the package looks amateurish or sloppy, move on.
Also ask for examples of closed deals, ideally from the same industry. Ask about the offer price, eventual sale price, and time it took to close the deal.
Get an Estimate of Sales Price and Time to Sell
Once you have narrowed it down to one or two brokers you feel comfortable with, get a sense of how they evaluate your specific deal before proceeding. There are a lot of factors that affect patent value and different ways of viewing them. You need to feel comfortable with the price the broker thinks your patent will sell for, and with the reasoning they use to get there.
You’ll need to share some information with the broker at this point to get a valid assessment of price. In addition to knowing about your patented invention they’ll need to know things like:
Claims of infringement or evidence of use by others. If someone is infringing your patent today and you can show it, this will affect the value. For some buyers, this is attractive because they will go after the infringer for damages after purchasing the patent. For other buyers, this may be a negative if they plan to use the patent themselves and know that competition is already active in the market. And sometimes the infringer themselves may be a prospective buyer. In any event if infringement is a factor your broker needs to know.
Age of patent. Most buyers focus on patents with at least five to ten years of remaining life
Industry. Is the patent in a hot technology area? Is the pace of development likely to render the patented technology obsolete before the patent expires?
Make sure also to read up as much as you can and try to form your own realistic opinion of a sales price so that when the broker tells you his or her opinion you can see how far apart the two of you are, and discuss the reasons.
Also ask about how long the broker thinks the deal will take from offer through close and make sure you can live with that timetable.
Understand the Commission and Fee Structure
It’s very important to understand how commissions are calculated. In many cases, a broker will earn more money if they sell your patents for more (just like selling a home). However, you should be aware of what the broker is spending and whether there is a cap to that spending. As a seller, you should also understand how long a time must pass after a broker’s representation ends in order to avoid paying him or her commission. Many brokers may ask for their fees, or a percentage of them, upfront in order to cover their costs. It is not uncommon for fees to be in the range of $5,000 to $15,000 for smaller patent portfolios.
Be Prepared to Sell Yourself
As a patent owner, nothing is more important than being prepared to sell not only yourself, but your portfolio to a prospective broker. While it may sound odd as you would think they would welcome everyone’s business, brokers who lead in the industry can often be quite choosy as they tend to have sales rates that are double than others in the market.
Understand Buyer Types
There are generally two types of entities who buy patents, operating companies and non-practicing entities (NPEs). Here’s how each works:
Operating companies. Operating companies generally have strong patent portfolios and strategically review third party assets to either complement their existing assets or use them as a litigation avoidance tactic when there is the possibility of patent infringement. Most operating companies have more flexibility, deeper pockets and rarely purchase patents simply to make money. They are generally more secretive about transactions and the sale process and are more concerned about license grant-backs. As such, it generally takes longer to complete a deal with operating companies as buying patents is simply not their core business function.
NPEs. NPEs are generally in the business of holding patents. They tend to be large aggregators who buy them to create licensing programs. Some defensive patent funds purchase patents to license their own members and seek to circumvent the assertion of patents. Others are more aggressive patent assertion entities (commonly referred to as patent trolls). Their aim is to make money on patents through licensing and litigation.
Operating companies generally pay cash for patents, while NPEs tend to be more flexible and may offer a “hybrid” model where each party shares in some of the risk.
What Makes a Patent Sell?
There are many factors which may affect the valuation of a patent portfolio and the likelihood of attracting solid offers, including the:
Number of assets in the portfolio family (note that single patents are harder to sell)
Priority dates
Overall drafting quality of the claims and specifications
Prosecution history
Number of citations (both forward and backward)
Pricing a patent portfolio is always a challenge. Unlike selling a house, most patent transactions (sales) are not publicly reported, so there is no way to obtain valid “comparisons” or “comps” on your portfolio to see if the pricing lines up.
Every patent is unique and similar patents often significantly fluctuate in value depending upon whether the patent is infringed (and whom infringed it) and whether relevant prior art is found. These can cast shadows on a patent’s validity.
The Sale Process
Selling a patent is similar to selling a home in some respects, at least when it comes to the process itself. A broker will analyze the portfolio and prepare the materials needed for the sale. Then, he or she will find prospective buyers, let them know the patents are for sale and provide them with any and all details regarding encumbrances, infringement and pricing guidelines.
Although it may take several weeks to receive bids, once the parties have agreed to a price for the patent, they will enter into a formal patent purchase agreement (PPA). While many PPA contracts contain standard language, they also contain a great deal of technical and legal details that should be reviewed by a patent attorney or other professional. Brokers can certainly provide sellers with guidance regarding the PPA language, but an independent legal review of the provisional language is always your best option. In addition, just like selling a house, it’s fairly common for specifics of the agreement to hold up the process or halt it completely. Having proper legal representation can save you a lot of hassle, especially when it comes to the complex language of the PPA document.
Patent Auctions: The Final Option
The final option, and most common vehicle, for selling the rights to a patent is done at a public auction. The firm of Ocean Tomo is the most prevalent patent auction company and holds two such auctions annually. The company receives a fee from both the buyer and the seller which can be as much as 25 percent. Alternatively, there are several services available online, such as Entar Patent which provide a vehicle in which to buy, sell and list patents.
If you need information about selling a patent, you can get info from Entar Patent marketplace.
We accept inquiries for our DeFi patent licensing at 213-880-9910 or fill out the online form:
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