In 2014, Forbes stated that there were almost 2.1 million active patents, yet 95% of them were not commercialized or licensed. In other words, 95% of those patents were not generating any money or funds.
However, that should not be the case. A patent can very well generate money but you need to know your way around to ensure that it does earn you money. If you go as far as to patent your invention or creation, you might as well know how that can earn you enough money to make it the basis of your business. After all, making patents can cost you quite the sum.
So, here we are, letting you into a brief guide on how you can profit from your patent and make it the basis of your business. If you are ready, let us get started right away!
How to make Money from your Patent?
One of the first questions that you may have is how do you get money from a patent? Well, there are more than a few ways where your patent can earn you money. We have highlighted a few of the ways below:
Start a Business Based on your Patent
The best way to earn a good amount of money from your patent is to start a business with it. You can start up a business by manufacturing and selling the products that you created. However, before you jump at that idea, make sure that:
- Your product is indeed a commodity that is in demand and
- It will be able to survive in a competitive market.
- You have the capital to start the business.
While it may sound like a simple solution, do keep in mind that creating a product, making a patent out of it, and selling the same product as a business are two very different things and require different sets of skills and talents.
Get the Patent Licensed
If you are not much of a business person, you can get your patent licensed. Licensing your patent implies that you will allow other parties to borrow the rights to your patent so that they can use your creations to make products or services. So, you are not directly involved in business but you are still earning a hefty amount from it.
However, do keep in mind that licensing your patent is quite an amount of work and complexities. Therefore, make sure you do your share of research and consult with patent brokerage firms before you step into the matter.
Sell to an Expanding Business
As patents are based on location, companies that are looking to expand in new countries are always on the lookout for patent owners willing to sell their patents. That is another convenient way to earn money from your patents.
You can do your research to stay up to date about companies expanding in your country or area. You can then go ahead and sell your patent to such expanding companies for a good amount.