How to License an Invention Idea
There is a long and complex road that must be travelled between simply having an invention idea and licensing it for profit. Nevertheless, if your idea is good, licensing its technology could provide you with a passive income stream for decades. If your grant of license is non-exclusive, your income can grow yearly as you license your technology to more licensees. Here is a general overview of how to do it.
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Things You'll Need
- Computer with Internet access
- Printer
- Diagrams and Descriptions of Your Invention
Instructions
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Reduce your invention idea to a tangible product -- something that you can describe in detail, make drawings of, and even build a prototype of.
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Conduct a "prior art search" of previously patented technology to determine whether any aspect of your invention violates someone else's patent rights, or was once protected by a now-expired patent (which would make it free for all to use). You can do this at any of the Patent and Trademark Depository Libraries located throughout the United States.
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Determine if your invention is novel, useful and non-obvious according to the legal definitions of these terms. Draw up written and graphical specifications that describe your invention and make convincing claims establishing the novelty, utility and non-obviousness of your invention.
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File a patent application with the U.S. Patent and Trademark Office (USPTO). Part of this application can be filed online while the rest can be filed by mail. You will have to pay an application fee of several hundred dollars.
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Answer requests and objections from the USPTO. This back-and-forth process usually takes several months and will require you to amend your application several times. It may take two or more years to receive final approval from the USPTO.
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Search for potential licensees of your invention. Trade associations are good places to look and experienced intellectual property attorneys can also help you locate potential licensees.
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Negotiate with potential licensees and draw up a technology licensing agreement. It is particularly important at this stage to decide whether you want to license your invention exclusively or non-exclusively. Licensees pay more for exclusive licenses, but an exclusive license will prevent you from legally licensing your technology to anyone else.
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Tips & Warnings
Think early about obtaining international protection for your patented technology. The Berne Convention Treaty makes this process a lot easier than it otherwise would be, but you must act within certain specified deadlines.
If you have enough money, hire an experienced patent attorney to help you prepare and file your patent application. Further, your technology license agreement should be prepared by an attorney who specializes in this field (who may or may not be a patent attorney).
