Monetization of a patent means making money with a patent. Patent monetization is the conscious exploitation of intellectual property (IP) rights for economic returns, usually by way of use, sale, or licence. Patent monetization is a value-added choice for inventors, institutions, and organisations to harvest innovation and idea into a source of cash. Patent monetization benefits institutions as it allows the exchange of intellectual property assets to invest and purchase business value.
They are various scales of modes of commercializing patents and each one of them possesses benefits as well as drawbacks. The most preferable among the processes is the process of licensing. The owner of the patent in this process makes the new product within reach of the patent on advance form of payment or consideration in the form of royalty. Licensing is a continuous flow of revenue and may be a good option for such firms that shall never enter business or production. It will prove to be where a patent is technical or specialty in nature so that it can’t be produced in bulk but one firm requires it. The patent license contracts are exclusive or non-exclusive as agreed upon between the patent holders and the licensees. There is sole ownership under exclusive ownership and numerous owners authorized to utilize the patent under non-exclusive ownership.
The second best alternative might sell the patent. Here, the patent owner is giving away all the ownership rights to the third party in exchange for cash money and never to return. It is advance cash payment but relinquishing future rights of ownership of the invention by the patent owner. It is most lucrative as an inventor when an inventor never gets anything to do with the technology afterwards or simply is not able to sell. But it is nice to be able to put some level of long-term value on the patent before making that decision so that then the customer would literally be a piece of old technology the owner will never use again. Patent assertion is extortion and done the old-fashioned way by patent aggregators or specialty firms.
Either the owner of the patent or any third party of the case requires rights against infringers of patents and receives dollars. Patent assertion is very lucrative when the patent is very valuable in the marketplace or if the owner of the patent succeeds at the court of justice. The second option does entail judicial consideration and expense and is therefore most appropriate for patent of greater value in the marketplace. Patent litigation is costly and time-consuming for a patent claim and may not be worth it at times. The option is thus opted for in most of the cases where a patent is to be violated and avenues of recovery are in wait. Cross-licensing is a contractual arrangement entered into between two or more firms wherein they trade patents free-of-cost, case-free and cross-use of intellectual property. Cross-licensing is a move in the case of firms when there are more than one patent which can be used to design product or service and is free-of-cost and case-free and result in innovation. Cross-licensing agreement forces businesses not to incurre the cost of patent wars without court wars overlooked and promotes collaborative innovation. Patent pools is a funding mechanism whereby a coalition of patentees come together and form an association, and license out all the patents collectively.
It is easiest to describe this in the telecommunications industry, where there is a heterogeneity and standards problem of so many various technologies that must be serviced.
Patent pools are lowering the transaction cost and patenting easier for such companies as they have to go through millions of isolated patents. Suit risk is lessened for pooled patents as they are a tool whereby everyone would have had mutually negotiated conditions of usage in the past. Patent monetization will be achieved by creating many platforms where new concepts are converted into dollars. By the process of cross-licensing, assertion, sales, or pooling by licenssing, the companies can ensure them of realizing the maximum value potential available of intellectual property.
Most reliable in case is to take market, technology prospect, and best monetization style form in competing for a return maximam. Both are desirable and undesirable from means perspective. Monetization model may be a patent holder in the sense that one has gargantuan value out of intellectual property. Intellectual property value higher in the new paradigm economy means higher potency of return to business and inventor in case the patent goes commercial.
