What should you know about buying a patent?

| Sep 7, 2020 | Patent Law

A patent holder is someone who maintains the exclusive right to license or manufacture their intervention, business process, chemical formulation or any other type of proprietary intellectual property. If you or your business owns a patent, it can be a valuable commodity. You need to understand the ins and outs of buying intellectual property rights such as a patent to avoid regrets down the road.

Patents often have multiple owners. Each of them has equal rights to manufacture their invention or to sell or license their intellectual property. If you’re planning to purchase a patent, then you need to check the records for it to determine if there are any ownership disputes filed against it. You should also prepare yourself to negotiate with all interested parties instead of only one.

The patent holder must next contact the U.S. Patents and Trademark Office (USPTO) to register the change of ownership of their intellectual property rights. This entire process can be completed online through the USPTO’s Electronic Patent Assignment System. The original owner will need to complete the request in writing and include a notarized copy of the patent application and rights assignment before moving forward with this step.

If your goal is to license or market the invention, you’ll need to prepare yourself for a negotiation process. Most patent holders will require you to either enter into a contingency agreement to pay them a portion of your sales or expect an upfront lump sum to use their invention. Patent holders will transfer the responsibility to you to defend their intellectual property rights against infringement as well.

Licensing or buying intellectual property rights such as a patent can be an exciting proposition. However, you have to be certain that all interested parties participate in the negotiations if you want to avoid legal and financial exposure. A experienced attorney can help you negotiate a licensing or purchase deal with an intellectual property holder if you’re ready to acquire rights to such a valuable asset.