How to License Your Patent

How to License Your Patent

Licensing your patent is a way to earn income without manufacturing or selling the invention yourself. It allows another party to use your intellectual property in exchange for royalties, upfront fees, or both.

What Is Patent Licensing?

Patent licensing is a legal agreement where the patent holder (licensor) allows another party (licensee) to use, make, sell, or distribute the patented invention under defined conditions.

Types of Patent Licenses

• Exclusive License: Only one licensee may use the patent—often in a specific territory or market.
• Non-Exclusive License: The licensor can grant the same rights to multiple licensees.
• Cross-License: Two parties license their patents to each other—common in tech and telecom industries.

Steps to License a Patent

1. Evaluate Your Patent’s Commercial Potential

  * Is it already generating interest?
  * Can it solve a specific industry problem?
  * Is it enforceable and active?

2. Prepare Licensing Materials

  * A short description or pitch deck of the patent
  * Patent number(s), drawings, and claims
  * Potential applications or use cases

3. Find Potential Licensees

  * Direct outreach to companies in your field
  * Patent brokers or Patent Licensing Platforms
  * Industry conferences or innovation showcases

4. Negotiate the License Terms

  * Royalties (percentage of revenue or fixed fee)
  * Territory (global, regional, local)
  * Duration (5 years, 10 years, etc.)
  * Scope (field of use restrictions)

5. Draft and Sign a Licensing Agreement

  * Always work with a qualified Patent Attorney
  * Ensure compliance with antitrust and export laws

How Much Can You Earn from Licensing?

• Royalties typically range from 1% to 10% of net sales
• One-time upfront fees are common
• Licensing can lead to millions—or nothing—depending on the patent and deal

Related Articles

• Patent Valuation Methods
• Should I Use a Patent Broker?
• Patent Portfolio Strategy
• How to Sell Your Patent