Chapter 9: How Do I License My Invention?
You may license your patent exclusively or to more than one party. Non-exclusive rights allow many entities—including you—to practice the invention simultaneously. Other issues to be considered in a licensing grant include territory covered; how long the license will be effective; how the invention will be used; and royalty rates. You may also create a field of use license, which allows different parties to manufacture the invention simultaneously, but each party manufactures the invention for a different purpose.
To select companies most likely to have an interest in your product, consider the following informational starting points:
- Thomas Register, a resource that alphabetically lists products and services and the companies that produce them
- Standard & Poor’s Register of Corporations, Directors and Executives
- Dun & Bradstreet's Million Dollar Directory
- Trade directories and magazines
In addition, Chambers of Commerce, banks and local industrial development organizations may be able to help you locate manufacturers and individuals interested in developing your ideas. Also, for a fee, the USPTO will publish a notice that your patent is available for licensing or sale in its official gazette. For more information about how to approach companies with patented ideas, it is recommended that you read as much as possible on the subject.
Many inventors turn to invention marketers to gain access to manufacturers. Be wary. Many of these organizations are fraudulent; they charge hefty fees and don't deliver on their promises.
A few warning signs that the company is deceitful:
- It offers to evaluate your invention, but refuses to give out details of its evaluation criteria or evaluators' qualifications
- It refuses to disclose its marketing success and rejection rates
- It requires large up front fees and a percentage of the royalties
- It claims special relationships with manufacturers, yet offers no proof
Be sure to ask for references from past clients and check that the marketing firm is registered with the Better Business Bureau.
The Inventor Handbook is written as a preliminary guide for inventors and where legal rights are concerned, the reader should consult a qualified attorney.