The process of selling a patent can be complex and convoluted at times. It is essential to steer clear of potential pitfalls that could slow your progress or lead to zero results if you want the potential sale of your patents that you are working on to be successful. When it comes to selling your patents, there are ten things you should never, ever do, and they will all be discussed in this blog. You can improve your chances of a successful patent sale by paying attention to these cautions and following them to the letter. These are lessons learned over hundreds of deals.
Avoid Not Having a Clear Title to the Patents
If you want to sell something, you must completely own it. If you fail to establish a clear title to your patent (or patents), you may risk creating legal complications and discouraging potential buyers. Ensure you have all the documentation and rights you need to transfer ownership of the property without leaving any room for doubt. We have stopped representing deals unless this is shown upfront, as getting a sale done without a clear title is not possible, and most of the time, this is found out after lots of time and money has been spent trying to sell patents.
Avoid Selling Patents with Limited Expiration Dates
Most purchasers place a significantly lower or no value on patents, with only a few years left before expiration. As a general rule, Patents with fewer than three years left on their validity period are less desirable to prospective purchasers. Concentrate on providing patents with extended lifespans to maximize the marketability of your products. If you have only a few years left till expiration, there still can be value with the proper valuation strategy.
Avoid Approaching Buyers Who Haven’t Bought Patents Before
It takes specialized knowledge and an understanding of the market to sell patents. You should avoid squandering your time by communicating with potential purchasers without experience with patent acquisitions. Find potential purchasers who have a track record of successfully acquiring patents and seek them out. Selling to buyers without experience means you have to educate them on your time, and most of the time, these new buyers make many internal mistakes that slow down and stop a deal.
Avoid Buyers Without Substantial Funds
Many sellers fail to recognize the significance of determining whether or not a potential purchaser has the financial means to acquire patents. Dealing with buyers who do not possess substantial funds can result in frustrating delays or the collapse of the deal altogether. Always ensure potential buyers have the financial resources to complete the transaction before selling to them.
Avoid Buyers Without Their Patents
If a potential buyer does not have any patents in their portfolio, this could indicate that they have a limited understanding of the patent landscape or are not committed to protecting their intellectual property. When selling to buyers who haven’t put any money into their patents, you will face challenges that “patents are not important” and the results we have seen are generally unfavorable.
Avoid a Declaratory Judgement
Declaratory judgments are issued when a seller contends that a prospective purchaser infringes on their patent (s). Bringing such claims can result in drawn-out legal battles, which will slow down the process of selling the property. Avoid making declaratory judgments as much as possible because they could lead to challenging circumstances.
Avoid Potential Buyers Without a Headquarters in Your Patent’s Country
When trying to sell patents globally, you may face additional challenges from cultural and legal differences. Confronting prospective purchasers who do not have headquarters in the nation where your patents are registered can make selling your patents more difficult. Your goal should be to collaborate with purchasers knowledgeable about the applicable jurisdiction’s patent laws and practices.
Avoid Selling Patents with Unwillingness to Share Know-How
In a lot of patent deals, the buyer also wants to know everything there is to know about the invention’s history. If you are unwilling to share this information with others, it may reduce the value of the patents you hold or eliminate interest in purchasing. To increase the number of people interested in purchasing what you have to offer, you should consider including relevant expertise.
Avoid Selling Patents with Inventors No Longer in Your Company
When it comes to the sale of patents, it is essential to ensure that inventors who your company no longer employs have officially assigned their rights and have a written agreement to govern the transfer of those rights. Buyers may hesitate to proceed with the transaction if there is a possibility of a dispute or unresolved issues with the inventors. Clear assignments and agreements that benefit both parties should be made to ensure that all transactions go smoothly.
Avoid Selling Patents with “Renegade” Inventors
While selling your patents, you might run into complications if inventors are associated with those patents who disagree with your company’s goals. Ensure that you and the inventors have a well-defined agreement to avoid any potential roadblocks or disagreements that could put the business transaction at risk.
Selling your patents can be a challenging and intricate process, but by avoiding certain pitfalls, you can significantly increase your chances of a successful sale. It is crucial to establish a clear title to your patents, ensuring you have all the necessary documentation and rights. Additionally, focus on offering patents with extended lifespans to maximize their marketability. When approaching potential buyers, it is important to seek out those with experience in patent acquisitions and substantial funds to complete the transaction. Avoid dealing with buyers who lack patents in their portfolio, as this may indicate a limited understanding of the patent landscape. Furthermore, steer clear of declaratory judgments and buyers without a headquarters in the country where your patents are registered. Be willing to share relevant know-how to increase interest in your patents, and ensure that inventors who are no longer with your company have officially assigned their rights. Finally, avoid complications by having well-defined agreements with inventors to align with your company’s goals. By avoiding these ten pitfalls, you can navigate the patent selling process with confidence and increase your chances of a successful outcome.