A patent protects your technical invention. Competitors can't use it without your permission, which strengthens your market position considerably. But a patent can make you money in other ways too. Here are my top three.
1. Licensing
As a patent holder, you can put your patent to work by granting a licence to one or more parties. That gives the licensee permission to produce, sell or use your invention, for an agreed fee. You can license per market, per country or per field of application.
Licensing can also serve you in other ways, such as opening up a market you'd struggle to enter on your own.
IPN Group in the Netherlands is a good example. The company designed a dispenser with a connector for refill bags, and used the revenue from the patent to build international production facilities. It has since grown into an international business supplying dispensers and couplings for liquid packaging to customers including L'Oréal, Coca-Cola, Heinz, Nestlé and Danone.
2. Attracting investors
If you need financing to produce and market your invention, a patent helps. Banks assessing an application look closely at how exclusive a product is, and the patent is what makes that exclusivity real.
Crowdfunding works on the same principle. Backers are influenced by how distinctive a product looks, and plenty of inventions that captured the public imagination have been funded this way.
3. A marketing tool
In the United States, products with a pending application are commonly labelled "patent pending." It tells buyers straight away that they're looking at something genuinely new, which makes the product more appealing.
That exclusivity often justifies a higher price, and patent pending products are said to sell better. In the Netherlands, there's nothing stopping you from stating in your marketing that a product is patented, to underline how innovative and exclusive it is.
