How do I license out a product?

One of my clients has developed an innovative recycling machine for a niche. He uses the machine himself as he has a recycling company. However, I advised him to capitalize on the invention by licencing the technology. This is because when talking to him he felt unease with manufacturing; he rather wants to stay with his main business. So, I proposed licencing to other equipment manufacturers. I want to manage this process on behalf of him, but I lack experience in licencing. Should my customer first patent the invention and then simply call manufacturers if there is some interest? What are the milestones and pitfalls in licencing?


So this is a great question and requires a relatively complex answer. And this is NOT legal advice.

The first answer is that No, in most cases do not patent the invention yet. Often a provisional patent will do just fine, much cheaper and faster to market.

Most inventor patents out of the gate are a waste of time/money.

Additionally, one license negotiation piece is that if you have the Prov Patent Application, (PPA) then you can have the licensee pay for the cost of YOUR patent.

I recently interviewed licensing expert Stephen Key, NYT Bestselling author of One Simple Idea about this topic.

You can listen if you'd like for free here:

Hope this is helpful

Answered 8 years ago

Yes. The only way your protected, at least temporarily is through patenting. Because what you license is the patent not the device.

You can develop a sort of drop shipment operation if you can find a manufacturer in this field who can build t and operates with a Just In Time approach... They build as orders (from your sales efforts) come in, and they take care of shipping to client, not you (drop shipping).

This is a better approach as you can sell something you currently don't have in stock, or have to spend as much money on patenting before knowing if there is really a demand.

Answered 8 years ago

Yes, by all means at least file a provisional patent. Under United States patent law, a provisional application is a legal document filed in the United States Patent and Trademark Office (USPTO), that establishes an early filing date, but does not mature into an issued patent unless the applicant files a regular non-provisional patent application within one year.

Answered 7 years ago

The best place to start would be call up the potential manufacturers and ask them if they look at new technologies or inventions for potential licensing. Some long standing industries with very few players are very difficult industries to licence in.

If actually pitching the technology, you should have IP and I recommend filing a provisional patent which gives a year of patent pending status. Also if you qualify as a micro entity, the PPA filing fee is only $65.

This allows you to pitch to companies with a provisional patent and find out the level of interest prior to investing in the much more costly non provisional patent.

Answered 7 years ago

Does your customer own the IP, or Patent for the recycling product? Once he secures the patent rights from USTPO, then he can license his patent to a Co to mfger, and sell the product, he would receive royalties on the sales of his product by a secondary, licensed CO. This is all given that the product and product patent is of interest and has value to a 2nd party Co that wishes to license their patent.

Answered 6 years ago

With licensing, you can sign your idea over to another company and let them do all the work. You can still be competitive in the marketplace if you just have an idea that’s slightly different than others out there. You just need a good idea that gives people a small improvement over an existing idea. It can give you a little bit of room to make changes and really flesh out your idea before filing an official patent application. Before getting into the process of licensing, you need to really decide what it is you want, what you think you can get, and research all the different factors that go into the licensing process.
You can read more here:
Besides if you do have any questions give me a call:

Answered 3 years ago

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