Things to Know Before Selling an Intellectual Property

31.01.23 12:25 AM By Rashmi



The term Intellectual Property (IP) refers to the non-physical properties resulting from our mind's creativity. Every invention, art, and design we create come under intellectual property. To protect their properties, inventors and owners use patents and copyrights. Like any other property, IP can also be sold and bought. However, before selling properties that involve trademarks, patents, and copyrights, some things must be considered. Let's discuss them in detail in this blog.


Factors to be considered before selling an IP


Whenever you decide to sell an IP, the price tag is based on numerous factors, such as market estimates, demand, the country's economy, and more. Since intellectual property is a valuable asset that determines a business's market growth, you must be cautious while selling it.


The estimated worth of your IP may decrease after you sell it, and this can be avoided by including a bonus payment in the sales agreement. In this case, IP owners can get bonus payments once the worth reaches its approved sales target within a fixed period. Choosing the right IP Attornies will help you resolve all your queries regarding intellectual property rights and give you a clear picture.


How to estimate/value Intellectual Properties


While deciding to sell your IPs, it is essential to fix the estimate for them to sell them at a reasonable price. There are three common practices to estimate the worth of your IP. They are,

  • Market-based: Using this practice, you will determine the worth of your IP by keeping the buyers in mind. Before fixing an estimate, you will consider your buyers' point of view on your IPs and similar properties' worth.
  • Cost-based: This practice is based on the cost of creation and the cost of registering a trademark or patent for your IP and determining a price according to them.
  • Economic-based: If you like to use this method, you have to consider your IP's past and future economic estimates. Though some complications are associated with this method, it is one of the most standard and reliable estimation methods to date.

Reasons to consider selling your IP


Selling your intellectual properties has a wide variety of advantages, and the following are the reasons why you should consider selling your IPs.

Registering the IPs costs higher, and selling them would let you regain the money you spent on registering. Some IPs involve maintenance costs. Selling them would cut those maintenance costs and provide you with benefits. If your IP stands well in the minds of consumers, your brand will get recognition from them, which is more important than monetary benefits.


Terms associated with IPs


When you are ready to sell your IP, knowing about each type of IP and its transactions is vital.

  1. Trademarks: Since trademarks continue in commerce, one can sell them freely without complications. With licensed brands, the owners are responsible for securing the proper usage of the IPs and ensuring that they meet the requirements and quality standards. If a trademark application is marked as "intent to use," it cannot be sold or transferred unless it meets certain criteria. By this condition, speculators will be prevented from filing trademark applications.
  2. Copyrights: With copyrights, every transaction is done using a written agreement. Selling or transferring intellectual property rights to others involves a proper copyright agreement to make sure that the rights are assigned from one party to the other. There are a lot of unregistered copyrights that exist nowadays, and it is important to thoroughly check the copyrights to ensure that the seller is the actual owner of the copyright.
  3. Patents: Though the sale or licensing belongs to the owners, the patents do not help them make profits alone. With patents, owners can make an initial profit, and still, there are chances of the IP making more revenue in the future. Through selective licensing, patent owners can sell their IPs to someone, maintain their ownership, observe their IP's usage and make a regular income.

Though there are numerous factors to keep in mind before selling or transferring your intellectual properties to others, an idea to make your property secure and beneficial is reaching out to an IP attorney. It will help you make the right decision and generate profit from your IP.


Conclusion


Apart from learning the various factors associated with Intellectual property selling, it is important to decide to whom you will sell your property. Always make sure to record your transactions and keep track of them. Keenly observing the buyer, thoroughly checking the agreements, and recording the transactions will help you transfer your rights to the correct parties and attain a reasonable benefit from your Intellectual properties.

Rashmi