Patent Licensing and Selling – Top 3 Mistakes People Make

 When it comes to monetizing patents, organisations with substantial patent portfolios frequently struggle to select the best approach. There is some room for error given the high stakes involved in selling or licencing these patents because mistakes made at this stage could be extremely costly. The top three errors that businesses should avoid are listed in the following article in order to maximise the value of their patents when licencing or selling them. Let's start by comprehending the necessity of selling and licencing patents.

Why Patent Licensing/Selling is an Important Part of Business Strategy?

Some businesses could view patents as an ad hoc revenue source rather than an integral component of their overall business plan. Instead, they ought to see patents as a regular, supplemental source of income to their main lines of business. When a company creates a patent, for instance, it has two options: either it may put it to use by incorporating it into its goods and services, or it can sell it for a high price.

Similar to this, companies might decide to licence their patents and profit from royalties. The catch is that patent licencing and sale agreements can occasionally be very intricate. They frequently leave room for costly errors. The goal is to anticipate such problems and entirely avoid them.

Prevent Making these 3 Mistakes While Patent Licensing/Selling

1. Selling Fundamental Patents

Without a competent portfolio evaluation, businesses risk having to sell their key technologies, which are connected to their essential business operations. It is therefore recommended to always licence such patents rather than selling them. If not, the business risked losing its market advantage. Companies must regularly assess their patent portfolios to determine which patents are essential to their operations and which are not.

Additionally, they have the ability to do dynamic competitive analysis to determine the core and non-core domains of their rivals. For instance, if a competitor's core business is a non-core activity for a company, that patent should not be sold because it is essential to them. Instead, it might be used defensively.

2. Incorrect Patent Valuation

Inaccurate valuation is yet another common error people make when selling or licencing their patents. Businesses may overestimate the value of a patent family or even the entire patent portfolio because there are no industry-standard methods for valuing patents. Approaches to valuing patents that take into account costs, income, or the market can greatly aid in determining a patent's worth.

External patent valuation experts are adept at carrying out such procedures and have the necessary experience and industry-specific knowledge to evaluate patents and precisely determine their worth. These professionals examine market prices for comparable patented products, the technological degree of the technology employed in the patent, and the likelihood that existing products will infringe on the patent. One can avoid undervaluing patents in a sale or licencing arrangement with the aid of such outsourced patent valuation experts.

3. An improperly formatted pitch deck

Last but not least, companies may err while designing a pitch deck for their invention or patent portfolio in order to sell or licence it. A patent pitch deck is essentially a PowerPoint presentation that lists the patents up for grabs, along with market, seller, and licensor details.

Due to the fact that many IP-intensive organisations have hundreds of patents in their portfolio, one typical error they do is to group 70 to 80 patents into a single pitch deck. This lowers the per-patent cost of each asset in that pitch deck, as well as the pitch deck as a whole from the buyer's point of view.

Including 20 to 30 patents in a single deck is an efficient approach to organise a pitch deck. Additionally, the pitch deck must to include a....

To get more information, read the entire article about Patent Licensing.


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