Patents Can Help You Grow Your Business — Here Are 10 Ways How

Will a patent help you grow your business? It depends on who you ask, and what industry they’re in. In some situations, patents have a tremendous amount of value. In others, they don’t. There are no short or easy answers. This is because patents have strategic value.

If you’re filing patents in the technology industry, your chances of monetizing what you’ve invented and patented can seem slim. Over the past 20 years it’s become increasingly challenging to enforce patents, especially for independent inventors and startups. What this means on a practical level is that if you want to use patents to make money, you need a different plan than suing for patent infringement.

Here’s the good news: There are still ways to use patents to commercialize new ideas, grow a business, and generate revenue. Yes, even in today’s challenging legal environment.

This is what I spoke about during IPWatchdog LIVE’s recent panel on Global Perspectives on the Strategic Monetization of IP in Arlington, Virginia. How to make money from your patents, in other words.

Employ the following strategies to use patents to grow your business and make money.

1. File a provisional patent application that is “transaction-ready.”

This allows you to test the market for 12 months while your invention is patent-pending. To ensure your PPA is transaction-ready, describe the problem your invention addresses and how your invention is a solution. To prevent others from easily circumventing you, include workarounds and variations of your invention as well as the most efficient way of manufacturing it. Don’t forget plenty of line drawings — the invention should be captured from all sides, clearly.

You have the option of turning a provisional patent application into a non-provisional patent application, which is attractive to potential licensees as well as investors.

“Filing a provisional patent application is affordable, demonstrates professionalism, and ultimately allows the company to determine how they want to move forward strategically,” explains Courtney Laschkewitsch, host of The Serial Inventing Podcast. “It’s a small thing we can do as inventors to show the licensee we are serious about our invention and add value to our potential partnership.”

2. Submit your ideas to companies that embrace open innovation for licensing consideration.

Find companies that are actively seeking out new ideas from external sources. Having a patent can help you negotiate a higher royalty rate, as these companies often value and respect intellectual property.

3. Demonstrate market demand.

Licensees are more likely to invest in turning your idea into a product when you reduce perceived risk. So, can you identify a customer who wants your product and showcase their demand to potential licensees and investors?

Especially when deployed in conjunction with a transaction-ready patent application, evidence of demand can be a significant help licensing or venturing.

4. Know your manufacturing costs.

Understanding your costs is crucial to making money from patents. Will you be able to produce and sell your invention at a price that matches or is slightly lower than similar products? This knowledge can strengthen your position when negotiating royalty rates.

5. Avoid patenting products that are going to have a short life.

Demand for new products is high. If you have invented a consumer product that is likely to have a short lifespan, file a provisional patent application first. You can decide if filing a non-provisional patent application makes sense later.

6. If you’re developing a complex product, plan on building a “wall” of intellectual property and a team.

For complex ideas that require ample time and capital to develop, it’s wise to form a team of experts. You should also plan on securing a portfolio of patents to crowd others out. Both strategies reduce perceived risk.

7. If you’re founding a startup, you’ll need a thorough IP strategy.

Startups that file patent applications early and often have an easier time raising capital. (Of course, there are exceptions.)

8. Use your patent portfolio to help you exit.

Today, the value of companies is often within its intellectual property. A portfolio of patents combined with proven sales creates a powerful foundation for selling your business.

9. Reduce online copycats.

An issued patent can help you take action against copycats. AI tools like Red Points exist to help you remove offenders swiftly at scale. This is only possible with intellectual property.

10. Use issued patents to help you negotiate licensing agreements internationally.

If your invention has market potential globally, issued patents can be valuable assets when negotiating licensing opportunities.

Please note: This roadmap does not include patent litigation, which is time-consuming, expensive, and offers no guarantees. While patent litigation funding exists, only a very small percentage of cases qualify.