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Intellectual property refers to anything that is created or discovered by your mind, such as a new recipe, a poem, artwork, or patented technology. It has the potential to become one of the most lucrative investments you can make in life. Monetizing intellectual property requires you to protect it with patents and trademarks and build it into an effective business model. Discussed below are ways you can use to monetize intellectual property.
1. Sell Your Patent Portfolio
Patents have the strongest legal standing in protecting intellectual property and can be a good starting point when monetizing your inventions. Selling your patents to a larger company allows you to collect royalties on every product that uses your technology. If you want to cash in on a large market share, selling your portfolio is one of the first things you should do. However, keep in mind that selling it could mean losing out on any potential growth or opportunities for implementation within other markets.
2. License Your Patents
Licensing your patents means you will sell the exclusive rights to use a product or technology for a specified amount of time and in a certain market. Licensing is less difficult than inventing the product yourself, but it still requires strong relationships within your technology industry to succeed. If you think you can use your technology in a specific market, but it will take more time and money to develop, then licensing may be a better option for your patents.
3. Go Direct to Consumer
Going to the consumer with your products or services is the quickest way to monetize an invention. However, it requires establishing a strong marketing plan and brand identity, two things that could prove difficult if you have never been an entrepreneur or worked in marketing before. Going direct to consumer will also require large capital investment to create new products, marketing materials, and licensing restrictions.
4. Co-development
The fastest way to monetize intellectual property is through co-development. In this case, you will be collaborating with another company on your original invention and splitting the proceeds of its sales. However, when in business, you will have to negotiate every aspect of the agreement with a third party and decide whether or not you’re making a fair deal.
To start the process, you must identify a partner who is interested in creating their own business or technology and needs your patented product or service to help them get there. Once you have agreed, it will be up to both of you to work together and get the product or service launched. For instance, if you want to create your own NFT, but working on it yourself is too difficult, you can market your idea to a large company like IBM, which may not have thought of it. However, they have complete control over your concept and its implementation.
5. Securitization
Securitization is a term used to describe a process of generating and selling financial securities that depend on your intellectual property. To securitize intellectual property, you must put up as collateral the rights to use the intellectual property and then sell the securities that depend on it. The more financial profit you can generate from people outside your company using your product or service, the greater chance your investors will be willing to put their money behind it. If a concept is not easily monetized but is still profitable, it may be worth the effort of transforming it into financial security.
6. Create New Products
Another way to monetize intellectual property is to create new products that depend on your original idea. For example, if you have created a new wearable device and want to sell it for $100 a piece, you could create an app that wirelessly connects devices so that users can interact with each other in a virtual environment. The app could then generate revenue through in-app purchases.
7. Sale-Leaseback
Sale-leaseback is a relatively simple business model that allows you to finance your creation of a new product or service by selling it and then renting it back. Once the lease periods are over, the company will own the rights to your product permanently, but you can generate profit from it in the meantime. To create something worth selling and leasing back, you must have good knowledge of the market for your product, its growth potential, and how much time and money it would take for someone else to recreate it.
Conclusion
Monetizing intellectual property can be difficult and time-consuming. Still, having the right resources and business know-how can be one of the most profitable ventures you can create. The strategies outlined here are by no means a complete list of ways to monetize inventions. When creating your intellectual property, remember that creativity is the spark that drives innovation towards progress and prosperity.
