How to make money through Patents?

How to make money through Patents? – An invention is mixture of science, writing art and commerce. The science aspect of the invention is the R&D, while the writing style and art is the way of filing the patent application. What later follows upon completion of the tedious task of R&D and filing the application process is the commerce section of the invention.  The commerce part of the invention seeks the strategies of marketing, finance and advertising, about how to make money through the invention. There is no straight formula. The question one really needs to ask is that, what can be the possible ways of minting money through the invention? What can be the lowest and best manufacturing technique for the invention?

Any patent’s value is rare to exist if its commercial worth cannot be demonstrated and exploited. The patent will mere be a certificate on the wall. In order to facilitate a smooth process of commercialization, one should have marketing and business skills.  In case, your team lacks marketing and business management skills, it is always advisable to hire such talents to your team.

Below you can find few ways of making money used by actual inventors to obtain actual success

The first and foremost thing to understand is that the every invention is different, varies from different field, attracts different investor and requires different marketing strategies.  So focus on the invention and its field, this will make the process easy.

Licensee – Gain licensee as much as you.

Licensing is a typical approach to gain cash from a patent. Through this process, a patent proprietor licenses his invention to another party, upon receiving the consent; the party has legal authorization to use the invention commercially. It can be either an exclusive or non-exclusive license. In exchange of the permission, the owner settles for a sum of royalty usually vary from 3 to 5 percent of profit.

Infringer to licensee

This works for cases where multiple infringers have been identified, because this infringer can be your potential licensee.  All you have to do is, firstly identify the companies, items and services being infringed. Arrange the companies and its sales in descending.  Accordingly, those companies who profit estimates less should be sent a demand letter for royalties (Ex: 2% of profit). Later the target would shift to large companies with the support of various licensees and the list of licensees would suggest substantial reserves in case of litigation. Also, you could charge a higher rate of royalty.

Target the market

This approach will focus on manifesting the invention in the product. You can work the market by consignment sale, an owner will offer the product to a retailer for duration of time and at the end of time duration, the retailer would either return the product or pays a percentage of the selling price for each item purchased. This helps to launch the product in the market and attracts attention of large companies. If the approach is successful, more demand and retailer would approach. Through this, several companies would be interested in investing money into the business.


Often an individual thinks that any idea substantiated into an invention can be worth patented, however, that is not the case. Recently studies have shown that almost 97% of patent are not successful commercially. What mainly happens with the inventor or entrepreneurs is that they focus on the protecting ideas so much that, they sometimes lose the sight of calculating the potential market success.

One of the few reasons behind this is, any invention can be commercially successful if it fulfills the commercial demand. In order to know such details, one should locate companies, businesses and field of industries where the invention can be utilized and you would earn revenue from it. These list help to establish potential buyers of patent. Technically opportunities must be there or created to use your invention, but if can you cannot find an opportunity, an option of selling a patent always exists (in the event that you wish to offer obviously).

Offering a patent enables the innovator to produce income that will help pay the bills or fund other promising idea. Also, selling a patent additionally eliminates the tremendous money related expense required to start a business of new item.

If you are looking for ways to make money surely the above ways can give you a brief idea of how to start. For more information, reach out to us on our patent licensing services.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *

Exclusive Webinar Series
Exclusive Webinar Series. Cost: $0 (Free) Limited Seats Available. Don't miss the opportunity, Register Now