The Top 5 Strategies For Creating New Revenue Streams
Revenue drives your business, and every IP asset not contributing to your overall revenue stream is weighing you down. Patent monetization bridges that gap.
When looking to create new revenue streams for your business, do not look any further than your own patent portfolio. With the right patent monetization strategies, you have the potential to tap new revenue straight from your own technology patent assets – diversifying your income stream and forcing every IP asset to earn its keep.
The following five patent monetization strategies are the best ways to draw new revenue out of your patent portfolio management program:
Revenue Stream #1 – Patent Acquisition
If you are in a position to buy new technology patents, you should consider patent acquisition as one strategy for creating new revenue. Acquiring the key patents needed to control a particular technology gives your business plenty of opportunities for diversifying the income from your patent portfolio.
Post-acquisition, your patent investment potentially pays off in any of the following ways:
- Building and marketing new products
- Licensing the technology to others
- Enforcing the patents
Patent acquisition is your gateway to new possibilities and is essential to growing your patent portfolio. One word of caution, however: Know exactly what you are getting before you make any patent purchase. Acquire the wrong patent assets and your revenue stream will not grow as much as you expect.
Revenue Stream #2 – Patent Filing
The most traditional way to build your IP portfolio is to develop your intellectual property and technology patents in-house. If your business has the capabilities, investing in an internal patent program opens up a new source of revenue as you innovate and file patents.
Maintaining a strategic patent program keeps you inventing ahead of your industry – giving you an edge over your competitors and granting you early entry into emerging markets. Remember that if you use this patent monetization strategy, you need a patent filing approach with robust invention disclosures that are mine-able for claims in a multitude of next-generation technologies.
Revenue Stream #3 – Patent Licensing
Whether you have recently acquired the patent or have had it lingering in your portfolio with little return, patent licensing is a reliable patent monetization strategy for creating new revenue streams from your portfolio. Your patents and IP are business assets, and you are entitled to collect licensing fees from your competitors if they utilize those assets in any way.
Patent licensing is often more profitable than patent litigation because you incur less costs in both time spent and in legal fees. However, licensing without litigation is uncommon since competitors rarely sign license agreements for unenforced patents.
Revenue Stream #4 – Patent Sales
Your intellectual property portfolio likely has a number of patents that are not contributing to your overall revenue stream. These patents are a drag on your bottom line due to high patent maintenance costs (particularly for international patents), which may amount to tens of thousands of dollars.
However, these excess or non-core patents still represent a patent monetization source: patent sales. While patents are not generally not selling for at the pricing levels of 5 – 8 years ago, patents with long-term or strategic value still fetch a fair price. But do not rush your patent sales without a proper vetting to check for any possible monetization opportunities – including those outside of your industry.
Revenue Stream #5 – Patent Enforcement
The last potentially untapped revenue stream is patent enforcement. Despite its increased cost in time and legal expenses, patent litigation produces more binding and enforceable consequences. If your patent is infringed upon by a major entity, it has the potential to yield damages and awards worth hundreds of millions of dollars.
Before you consider a patent enforcement strategy, determine the following factors:
- Who are the infringing entities?
- What are the costs involved with enforcement and licensing?
- What is the timeframe for those enforcement/licensing expenditures?
- What is the overall financial picture (return on investment) over the timeframe involved in patent licensing and enforcement?
Despite the long time investment for a generous return, monetizing through patent enforcement is frequently the best approach. In order to maximize your chances for a successful suit, it is critical that you have the most robust patent litigation support.
Each of these patent monetization strategies has its own level of risk, and the correct strategy in each specific case depends on your company, your industry and the specific patent itself. But with the right approach, you have the potential to create new revenue streams that drive your business forward.
Need more guidance on patent monetization? Click below to download a tip sheet from TechPats and discover how to realize a greater overall portfolio return from your intellectual property.