How to License Your Inventions
By Bao Tran
Effective licensing of intellectual property (IP) rights and, in particular, patent rights, presents unique challenges due to the complexity of the laws regulating the acquisition and enforcement of IP rights on the one hand and the intricacies of evaluating the potential values of the emerging technologies sought to be protected by the IP rights on the other. Patent rights, for example, require formal application and evaluation proceedings (patent prosecution) in the United States patent and Trademark Office that may last for several years. Under current laws, a patent grants its owner a limited monopoly in the patented invention starting on the date the patent is granted for a term of 20 years from the filing date of the patent application. Thus, the effective patent term may be significantly shorter than the 20 year term set by the statute.
Furthermore, inventors are often not interested or not able to exploit patented technologies on their own, but rather prefer to license their rights to third parties for commercial development. However, patents often issue before a market has been established for the technology protected by the patents, making the process for establishing reasonable terms for patent licensing rather complicated. In the prior art, the process of licensing patent rights requires, on average, a significant portion of the patent term, thereby limiting the amount of revenue generated by patent rights. According to one study, the patent licensing process requires, on average, 37 months. Since patent prosecution requires on average 2-3 years, between a quarter and third of the statutory patent term may be lost for licensing purposes under current patent licensing practices.
Several factors contribute to the inefficiency of current patent licensing practices including, but not limited to, the difficulty of matching inventors and other potential patent licensors with interested and qualified potential patent licensees, the intricacies of determining an accurate market value for the patented technology and the lack of an efficient infrastructure for the secure transfer of intellectual property rights.
We at Tran & Associates achieve high quality and first-to-file speed by using computer patent workflow tools. We also have internal databases that tell us hot areas for IP transactions. We share these workflow tools with our clients to promote high quality, yet cost effective patent solutions and monetization of the patents. Please call us at 408-528-7490 or email us at bao at tranassoc dot com for more information.