Inventors often obtain a provisional patent before applying for a (regular) nonprovisional utility patent because provisional patent applications require less work to prepare and generally cost less. So, a question that we often get is: can you sell a provisional patent? We will answer this below.
Can a Provisional Patent Be Sold?
A provisional patent can be sold. In addition to selling a provisional patent, an applicant can license the rights he has under his provisional patent application to another party. If an applicant wants to sell his provisional patent, he needs to execute a patent assignment, which is basically a document that’s drafted to transfer the ownership of the patent from the applicant to the party that purchased the provisional patent application.
So, what should be included in the patent assignment document? For a patent assignment document to be valid, it should list the inventors of the invention, as well as the party to which the provisional patent application is going to do.
The party that’s transferring its rights away is known as the assignor and the party that is receiving the right to the provisional patent application is known as the assignee. Provisional patent applications are usually assigned from employees to the company for which they work.
That said, a transfer of ownership can occur between any two parties, the parties do not need to be an employer and employee, but the inventor(s) listed in the patent application must be the party that transfers its right of ownership, as such the party or parties assigning (transferring) their rights must sign the assignment agreement. This is because the rights of the assignors are the ones that are being impacted by the agreement.
So, does an inventor have to do anything else after executing the assignment agreement? Yes, after executing the assignment agreement, the agreement should be recorded with the USPTO to reflect the assignment of interests in the application.
How Much Does It Cost To Transfer a Provisional Patent?
Now that you know that you can sell your provisional patent application, how much does it cost to execute and record an assignment agreement? If you’re having an attorney draft the assignment agreement, they may charge you a small fee, however, recording an assignment agreement with the patent office is free of charge if you do it online.
To record a provisional patent application assignment, you need to head over to the USPTO Assignment Recordation Branch. You can submit the assignment agreement, as well as a recordation cover sheet.
If you choose to record your assignment by submitting a paper application to the patent office, they will charge you $40 to record the assignment. Save yourself the money and the hassle of going to the patent office and submit the assignment online.
Speak to an Attorney
If a company or individual has approached you to purchase your provisional patent application, contact an attorney and ask them how to proceed. Your attorney may recommend to license your rights under the provisional patent application instead of giving up all your rights under the provisional patent application. The only way you’ll know what to do is by contacting an attorney and giving them the specific facts of your case.
Getting the Best Price For Your Provisional Patent
Often times, inventors believe that because a provisional patent application requires less detail and costs less that they shouldn’t invest too much time in its preparation. That’s a mistake. Inventors, especially those who want to sell a provisional patent, should take the time to prepare it by thoroughly and broadly disclosing their invention.
Doing so will make the provisional patent application broad enough so that if the inventor or party to which the inventor sold the provisional patent, it can benefit by filing a nonprovisional (regular) patent application that relates back to that earlier filed provisional patent application.
This is so because for an inventor to benefit from the early filing date of a provisional patent, the patent disclosed in the nonprovisional patent application has to be the same one disclosed in the provisional patent. If the patent examiner determines that the two inventions are too different, he won’t allow the applicant to benefit from the early filing date.
That said, having a strong provisional patent application benefits the inventor in two ways. First, if the inventor chooses to file a nonprovisional application, he won’t run into difficulties with the inventions not matching.
Second, if the inventor has a strong provisional patent, he might be able to find a buyer that will pay a decent amount of money for it. Whereas if the provisional application is weak, the buyer might be turned off by that fact. So, have an attorney prepare a strong provisional patent application.
Conduct Research to Understand the Value of Your Provisional Patent
If you have a provisional patent you want to sell but don’t know how to price it, conduct market research, see what products are selling for and price yours accordingly. If you don’t have the skills to perform market research, you can hire a company to conduct this search for you.
You can also contact companies that may be interested in your invention, pitch your invention to them, and see if they’re interested or not. If they’re interested look at what their products are selling for and you should have a better idea of what your invention is worth.
If you have a strong provisional patent application that you want to sell, don’t be afraid to negotiate with them. Don’t undervalue your invention especially if it solves a problem that other inventions don’t.
Selling and Recording a Provisional Patent
By now, you should know that patents, even provisional patents can be sold. Typically parties conduct the sale process by executing an assignment agreement, transferring the money to the party selling the provisional patent, and then recording the assignment agreement with the patent office. Recording the assignment with the USPTO is free if it’s performed online, otherwise, if you choose to file a document the patent office may charge you a small fee. If you have any general questions or comments, please feel free to leave them in the comments section below.