Legal and strategic guide for inventors
A patent is an intellectual property right enabling its holder to prohibit others from using, reproducing or marketing a technical innovation for a specified period. This right can be exploited directly, but it can also be transferred, like any other asset. The sale (or assignment) of a patent thus enables an inventor to enhance the value of his innovation, without necessarily exploiting it himself. This article provides a clear and accessible explanation of the various stages, conditions and issues involved in selling a patent.
Understanding patent assignment
A transferable property right
A patent is an intangible asset that can be assigned, either for valuable consideration or free of charge, in whole or in part. The assignment of a patent consists in transferring to a third party, in a definitive manner , the rights attached to this title of ownership. The assignee then becomes the owner of the patent, and has sole right to claim exploitation or bring infringement proceedings.
The assignment may concern a single country or extend to all the territories in which the patent is protected. It may also relate to a single use of the invention, or to all possible applications.
Sale or license: two distinct mechanisms
Assignment should not be confused with patent licensing. Under a license, the inventor retains ownership of the patent, but authorizes a third party to use it in return for royalties. Assignment, on the other hand, involves a complete (or partial) transfer of ownership. Once the sale has been concluded, the assignor loses all rights to use the patent, unless otherwise stipulated in the contract.
Before the sale: prepare your patent
Check patent ownership and validity
Before taking any steps, you should make sure that you are the owner of the patent or patent application. In the case of joint ownership, the agreement of the other owners may be required. Furthermore, a forfeited, cancelled or expired patent cannot be validly assigned.
The patent or application must be valid, with no litigation likely to call its scope into question. In case of doubt, a legal audit is recommended to assess the solidity of the title.
Assess the value of the patent
A patent has no intrinsic value: its value depends on its exploitation potential, originality, level of protection and market position. It is advisable to carry out a cross-assessment: technical analysis (maturity, reproducibility), economic analysis (market demand, profitability), legal analysis (geographical scope, enforceability). This valuation work helps to justify the price and give credibility to the negotiation.
Identify and approach a buyer
Target interested companies
The potential buyer of a patent is most often a company active in the technology sector concerned, wishing to incorporate the innovation into its products or block its competitors. It may also be an investor or a player specializing in patent acquisition.
To identify these partners, it is useful to consult patent databases (INPI, Espacenet, WIPO), catalogs of innovative companies, professional directories or technology transfer networks. The choice of targets should be based on a sound knowledge of the invention's application sector.
Present your invention effectively
Once the targets have been identified, contact must be carefully prepared. You need to be able to present the invention's usefulness, originality, competitive advantages and economic potential in just a few minutes. A clear, well-structured presentation supported by concrete data (test results, prototypes, market studies) will increase the interest of potential buyers.
The commercial approach can be carried out directly, or through the intermediary of a consulting firm, a valuation agency or a specialized lawyer.
Close the patent sale
Negotiate the assignment contract
A patent assignment contract is a deed of sale governed by common law. It must specify several essential elements: the precise identification of the patent or application concerned, the territorial scope of the assignment, the duration (in the case of a temporary assignment), the price or consideration, any guarantees and the terms of transfer.
The price can be set at a flat rate, or as a function of future exploitation (royalties, threshold bonuses, etc.). The amount may vary considerably according to the nature of the invention, its state of development, and prospects for profitability. In the absence of a price, the contract may be requalified as a donation or annulled for lack of cause.
Ancillary clauses are often included, such as the provision of associated know-how, technical assistance from the assignor or the distribution of rights to any improvements.
Comply with legal formalities
The assignment of a patent must be recorded in writing. This writing is required on pain of nullity. The deed must then be entered in the National Patent Register (RNB) kept by INPI. Without this registration, the assignment has no effect on third parties. As a result, the assignee cannot bring an infringement action or claim rights to the patent until the registration has been made.
It is also important, in the case of European or international patents, to register with the relevant registries (EPO, WIPO), depending on the territories concerned.
Legal effects of the sale of the patent
Transfer of economic rights
The assignment transfers all the economic rights attached to the patent: right of exploitation, right of action against infringement, right to grant licenses. By default, the assignee acquires the right to act against infringements subsequent to the assignment. To act against earlier acts, an express stipulation in the contract is required.
On the other hand, the assignor retains his moral rights as inventor, in particular the right to be named as the author of the invention and to receive any official distinctions.
Transfer of obligations
The assignee becomes responsible for payment of the annual instalments due to maintain the patent in force. In the event of non-payment, the title may lapse. The contract may also impose an obligation to actually exploit the patent, particularly if the price is linked to the income derived from the patent. Failing this, the assignor may in some cases seek termination of the contract or damages.
Selling a patent is a strategic move
Selling a patent requires a sound knowledge of the invention, a strategy for adding value to it, and a rigorous legal framework. While it enables the inventor to monetize his innovation without having to develop it himself, the transfer requires careful preparation, from a technical, economic and legal point of view.
To ensure the security of the operation, we strongly recommend you seek the support of an industrial property attorney, a lawyer or a firm specializing in technology transfer. They will help you to enhance the value of your patent, find suitable buyers, negotiate the best terms and conditions, and formalize the transfer in compliance with legal requirements.
Transferring a patent means transferring not only a potential for innovation, but also a strategic right. So it's best to proceed methodically.