In 2020, there were nearly 600,000 utility patent applications. These are patents people pursue to protect inventions.
Many people find themselves in situations where someone else already has a patent for an idea they thought of. Rather than go back to the drawing board, they might contact the proprietor and make an offer.
Buying a patent is fairly common between businesses. Understanding how to buy a patent is essential to ensuring the best outcome. Let’s look at the key information you should know.
Finding a Patent to Buy
Finding a patent to buy is easier than it seems. This resource by the US Patent and Trademark Office (USPTO) publishes newly issued patents each week.
It includes info on proprietor contact data, patent rights, and a schematic of the invention. If you find something you’re interested in, reach out to the proprietor. Ask them if they’re willing to sell the rights to their invention.
If they agree, you can begin negotiating. Don’t worry about having your offer declined.
It may take a few tries to find a patent to purchase. Keep searching every week and you’ll eventually find someone willing to work with you.
Not every transaction is simple. Things can get complicated if a patent has multiple owners.
If you want full control, you’ll need to negotiate with every owner. This is true no matter how many owners there are.
For example, if a patent currently has six owners, you’ll need to pay all of them if you plan on being the sole owner of the patent. Before you move forward with the transaction, check the patent office for ongoing disputes over ownership.
This problem often occurs when multiple owners argue over their contributions to the patent. Wait for these problems to be resolved before making a purchase. Otherwise, you could cause unnecessary complications for yourself.
Assigning the Patent
The owner of the patent needs to change ownership with the United States Patent Trademark Office after you reach an agreement. They will file to assign you the title, rights, and interest in the patent.
The assignment must be made in writing and be officially notarized. It’s possible to scan documents by using the USPTO’s Electronic Patent Assignment System. Regardless of how it’s handled, the step must occur before ownership transfers to you.
Can I Buy an Expired Patent?
Yes, you can. Business patents expire if the owner does not pay the appropriate maintenance fees. This can occur for a variety of reasons, such as negligence or disinterest.
Buying one is similar to buying an unexpired patent. You can contact the seller and negotiate a sale.
After you purchase it, though, you’ll need to pay lapsed fees to renew it. These will vary depending on how long the patent has been expired. Purchasing an expired patent is sometimes cheaper.
When patent owners let them expire, it’s often because they don’t have a use for it. So, they’ll be more likely to settle for a lower price.
Licensing as an Alternative
You don’t always have to buy a patent. It’s possible to license it instead. This is most appropriate if you intend on selling an invention but don’t require full rights to it.
When the owner licenses the patent to you, you can legally manufacture the invention. These agreements often require you to pay the owner a lump sum.
You can also negotiate to pay them a percentage of product sales instead. However, you still have certain responsibilities as a licensee. If someone infringes upon the patent, you’ll need to challenge the infringement.
Be prepared for this obligation if you choose to license one. Keep in mind that purchasing a patent is the only way to have full control over it. For this reason, buying is recommended over licensing in most cases.
What Documents Do I Need?
You’ll need to write a sales contract for the patent. This is also known as a conveyance.
This should clearly identify the patent you wish to purchase. The conveyance should also include negotiation phases, costs, and the date the patent’s rights will be transferred.
The seller and the buyer need to sign this document in the presence of a notary. You can then file the notarized document with the USPTO, but you must do so within 90 days of its execution. File the required paperwork as soon as possible to avoid delays.
Although the patent purchasing process is straightforward, difficulties can arise. Buyers often encounter issues they didn’t plan for. They might also have trouble finding a seller.
Working with a legal professional can make patent buying much easier. They have the knowledge and resources to meet your goals in a fraction of the time it would take you. When looking for an attorney, research their past reputation.
There should be plenty of previous clients who have stellar feedback to give. You should also ensure they specialize in this area of law. Just because a lawyer offers patent services doesn’t mean they focus on this niche.
It’s best to find someone with years of experience in intellectual property law. You can ask them for examples of past projects similar to yours.
You might discover they helped someone like you acquire a difficult-to-obtain patent through careful negotiation. Assess how interested they are in your project.
If the patent attorney doesn’t seem to care about reaching your goals, continue your search elsewhere. With enough due diligence, you’ll find the best choice for your situation.
Understand How to Buy a Patent
Understand how to buy a patent so you can work with the proprietor sooner than later. The last thing you want is for a competitor to purchase one you should have bought. As long as they’re willing to sell, things can go your way.
Just ensure you work with the right attorney. We at Berkeley Law & Technology Group implement a flexible approach that emphasizes quality and service.
Our attorneys specialize in intellectual property law and can help you get started on the right track. Reach out to a representative today to learn more.