TAEUS Focus On IP

How to Sell My Patent:

Dec. 9, 2008

Psst, buddy I have patent 7,123,456 for sale. Want to make an offer? You can look it up on the USPTO database, or I can email you a PDF. Good stuff, I tell you. And today only, I am making deals.

That's no way to sell a patent! Even if you do pique the interest of your prospect, and she looks up the patent, it can take hours or days to understand the patent well enough to see if it warrants serious consideration. It is not the buyer's job to take the legal and technical language of the patent and to convert it into clear and concise business benefit language describing the opportunities that owning such a technology imparts on the owner. That responsibility sits squarely on your shoulders.

Many large technology buyers (the folks who are most likely to buy your patent) are asked to look at hundreds of patents each month. If you don't spend any time and effort to properly prepare your patent for sale, it simply won't get considered.
If your patent gets past the first cut, buyers typically spend from $10,000 to $15,000 in due diligence before making their first offer. By doing your homework, you can cut buyers' costs by a third. On a good patent, that savings translates to more interested buyers and higher sales prices.

What are Buyers Looking For?

There are more buyers of patents and technology than ever before who are investing in patents at an increasing rate. Your job is to capture their attention and put your patent directly in the middle of their sweet-spot. If you do this, you will sell your patent. If you do it well, and capture the attention of two or more serious buyers, you will sell your patent for lots of money.

Motivations for buying patents are not as clear as you may think. Buyers are looking for the benefits that your technology offers...not the technology itself. Communicate those benefits and your patent will find a new home.

How the TAEUS Patent Exchange Helps

A properly prepared patent always includes a short, one page, cover document which concisely answers the important high-level questions regarding your technology. The Patent Exchange gives you a maximum of 250 words to make your case. Most native English speakers can carefully read a well-written document at about 150 to 180 words per minute. As a consequence, you can expect about one or two minutes of your prospect's attention, and no more.

If you do capture buyer's interest, they will be encouraged to begin their due diligence. At this point, buyers will usually choose to download supporting documentation that you may have prepared. There is no limit to your verbosity in the attachments. The Patent Exchange allows for up to three PDFs, Word documents, Excel Spreadsheets, or JPG images to be attached as downloads to your patent.

Your 250-Word Description and the One-Pager

In 250 words or less, answer as many of the questions below as possible. You don't have to fully develop each statement...just make your proclamation here. You have a chance to defend your assertion in a larger prospectus, or patent offering, which you may include as a downloadable supporting attachment.

Describe the Technology:
What does the technology described in your patent do that cannot be achieved by other means? Specifically, what benefits does it impart on the owner? Why is your technology superior, and how is it differentiated?

Describe the Market Your Technology Serves:
Describe the target market, including its size. Describe secondary applications for your IP. In what types of products could your technology be deployed?

Current and Future Commercial Use:
Is anybody currently using your technology? Do you know of plans for future commercialization of your patent?

Technical Details:
What is the risk for prior art? Is it an early patent in its technology space? How strong are your claims? Can your patent be easily observed if somebody infringes on it? How difficult is it to design around? What is the risk for obviousness?

Risks of NOT owning the IP:
Your patent, by definition, is a scarce commodity...there's only one just like it. Could a prospective buyer be prevented from making a product now or in the future if your patent falls into the "wrong" hands? Could they be exposed to licensing fees greater than the value of your patent? Is there significant risk of litigation?

Disclosures:
What are the encumbrances around your patent? Is the ownership clear, and why are you, the seller, credible? Do you have existing licensees? Are you selling a current revenue stream (licenses)?

Third Party Advantage

The clear and simple truth is that no mother has an ugly baby, and no inventor has a bad patent. Buyers generally consider the opinions of the seller, and especially the inventor, as lacking credibility and read them with a dispassionate and disinterested scrutiny. So don't give your opinion. Provide the facts, and substantiate them with credible third-party sources.

Third party agents such as TAEUS and other patent brokers can help you get top-dollar for your patent by providing a layer of third-party credibility that the IP owner may have difficulty achieving. The terms for representation of a patent usually include, up front fees, ongoing management fees as well as a success fee. Depending on your resources the logical first step is to do your homework and convince yourself that the investment is worth making. Occasionally, TAEUS will take on strong patents requiring only a success fee when the patent sells. But as with any other "buyer," it takes time and money for an agent to determine if your patent is good and worth the up-front investment to take your patent on consignment.

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