What Is A Patent Worth?

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Passport1

Passport1

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A few years ago I invested in a startup tech company that was developing an entirely new way to produce images. The idea was to modify a camera lens using electronics so that any image taken would have an infinite depth of field. This allows an instantaneous image from any point/distance from the lens to infinity to be perfectly focused. The applications of this invention are enormous; microscopy, endoscopy, security cams, satellite imaging, autonomous driving vehicles, defense industry etc.

Last September the company's patent was approved. It received all the proper documentation and the invention is now proprietary. The company is still searching for funding to produce working models and hasn't made any money yet.

Since technically I own a piece of that patent, what is it worth?
 
It's economics which is difficult to determine. High demand + the right product = money. Low demand + the right product = low return. Low demand + bad product = low return. High demand + right product + Edison stealing your patent = no return, life destroyed, and a footnote in the history books.
 
If you were working for the company then you don't own any of that patent. It's not worth anything to you except to put it in a frame on the wall in your den.
 
Earning potential will dictate what it will be worth. Once it is developed and marketed you will have a better idea of demand.
 
A patent is worth the ability to defend it. Really. In my industry everyone has patents and it's frankly impossible for a large company to make a complex product without inadvertently violating patents. The large companies all have cross-licensing agreements with their competitors so they don't bury each other in patent lawsuits. That doesn't mean they help their competitors, because often there's more of a "secret sauce" that isn't necessarily available from patent filings.

I do remember one time when my company was sued over claimed patent infringement. There was a broadcast message that anyone who had any information that might relate to it was not to delete or destroy anything that might be relevant, including emails and paper documents, regardless of how it might relate to the case. A coworker who previously worked for another competitor said it had no merit. He said the same company had sued his old company and their claims were really odd because they made absolutely no technical sense,
 
Passport1 said:
Since technically I own a piece of that patent, what is it worth?
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It can be worth nothing or it can be worth a lot. It's not possible to put a dollar amount on it.

It's been a year since it was approved. Is it being used, sold, marketed to others yet ?
 
OP needs to state whether he had some sort of unusual agreement in place where he had rights to the IP despite working for an employer. I've never seen that in any company I've worked for but it could exist. Without that everything always belongs to the employer.
 
$0-$billions

However its the company's property. So its worth will only be translated to personal wealth should the companies value increase or is sold.
 
Davejam said:
$0-$billions

However its the company's property. So its worth will only be translated to personal wealth should the companies value increase or is sold.
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It can be worse than $0.00. I've seen them awarded for useless devices, but it cost the company tens of thousands for the patent lawyers. The lawyers always win no matter what.

Which is understandable, most of the ones we worked with have a PhD in some science or engineering along with a J.D.
 
We have 3 patents on the Oil Udder purely for protection since we are just two guys. I have several other patents with other companies and it's basically been the same story. Protect a smaller group from bigger ones. As for value we will see! Interesting process to go though.
 
kschachn said:
OP needs to state whether he had some sort of unusual agreement in place where he had rights to the IP despite working for an employer. I've never seen that in any company I've worked for but it could exist. Without that everything always belongs to the employer.
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I do not work for the company. I am only an investor, however I did sign a non-disclosure agreement about the particulars of the invention so I can't reveal what I know.

What I'm really thinking about is what if the company folds without ever producing and marketing the product? Since the patent has some intrinsic value, can it be sold to another company and the proceeds distributed to the share holders? I'd like to get some of my investment back.
 
Yeah I don't really care what it is for, I didn't ask that. Although you should know that patents are public but that is why most lawyers skillfully craft the patent to reveal as few secrets as possible. In fact if you can mislead then that is all the better.

But to answer your question the patent is an asset just like any other property. So yes it can be sold as part of a liquidation or other sale. If you're an investor in the company then you might get some of the proceeds of the sale, but once it's sold you will not get royalties. That only occurs when the patent is licensed for use and it would only go back to the patent holder (which might include you as an investor) but not to you as one of the inventors.
 
Passport1 said:
I do not work for the company. I am only an investor, however I did sign a non-disclosure agreement about the particulars of the invention so I can't reveal what I know.
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Far be it from me to tell you what you can and can't do, but most NDAs can't legally prevent anyone from talking about things that are already public. Even a patent filing is required to be public. I've signed enough NDAs to know that they say patents can't be disclosed, but everything about them (even when they're purchased or reassigned) is required to be in the patent listing.
 
As much as someone is willing to pay for it.

If your investment entitles you to over 50% of the company, then you have substantially more than anyone else. If you have less, then you have no control. If the company is public, then your answer is extremely simple. If it is private, more complicated, but possible if you have access to financial information.

If you were to ask me directly though;
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A patent is a legal right to sue anyone or any company that infringes on your invention. It does NOT pay for the cost to hire attorneys to process the suing. Although if the owner of a patent wins in a suing someone or some company they MAY be awarded several times the amount of loss that the infringement cost them. But such cases may take many years and cost enormous amounts of money and a large amount of time and also possible travel. And sometimes the loser just shuts down business, and or declares bankruptcy. I have heard of a case that took years and when the company being sued lost they closed business and literal moved into a building across the street and opened up an identical business with a new name the next day doing the same thing and infringing again.

One company I worked for was sued. Their attorney said that the other company was correct and that they were infringing on the a patent of the company that was suing them. BUT that the company that was suing them was also infringing on a patent that our company had. And at the suggestion of our companies attorneys and the president of the company out company wrote a letter to them basically saying that we can sue each other and each spend a lot of money for lawyers and time, or we can cross license to each other and both remain in business. The other company agreed on a cross license arrangement where we did not sue them and they did not sue us.

In some ways it is a game, but it is also real with real money and may make or break a company. So even though it may be considered a game it is a game that savvy people who run businesses know how to play.
 
JimPghPA said:
A patent is a legal right to sue anyone or any company that infringes on your invention. It does NOT pay for the cost to hire attorneys to process the suing. Although if the owner of a patent wins in a suing someone or some company they MAY be awarded several times the amount of loss that the infringement cost them. But such cases may take many years and cost enormous amounts of money and a large amount of time and also possible travel. And sometimes the loser just shuts down business, and or declares bankruptcy. I have heard of a case that took years and when the company being sued lost they closed business and literal moved into a building across the street and opened up an identical business with a new name the next day doing the same thing and infringing again.

One company I worked for was sued. Their attorney said that the other company was correct and that they were infringing on the a patent of the company that was suing them. BUT that the company that was suing them was also infringing on a patent that our company had. And at the suggestion of our companies attorneys and the president of the company out company wrote a letter to them basically saying that we can sue each other and each spend a lot of money for lawyers and time, or we can cross license to each other and both remain in business. The other company agreed on a cross license arrangement where we did not sue them and they did not sue us.

In some ways it is a game, but it is also real with real money and may make or break a company. So even though it may be considered a game it is a game that savvy people who run businesses know how to play.
Click to expand...
Some people just try to sell their patents even if they don't intend on actually making anything. There are certainly non-manufacturing patent trolls out there. I remember one patent that I heard about possibly changing my industry. I looked at the description and was thinking that some patent examiner was asleep at the wheel because this was something so obvious and already used that it was impossible to patent. I don't think the patent holder was able to enforce it because billion dollar companies would have just had it invalidate for being improperly granted.

And yes the game of cross-licensing is just to keep from paying too much to attorneys. However, cross-licensing doesn't necessarily come with cooperation. Sometimes a patent give just enough information to protect the invention without all the secret ingredients needed to actually make it.
 
I’m a co-inventor on several patents but I don’t own them. None of those patents made money for the client but they did cost a lot to file. They were filed for multiple reasons, some are for competitive advantage, holding the tech close, some were an attempt to add value/credibility to a project, others were to license the technology. The license contract is the only one that has returns but that hasn’t covered development or patent costs.
 
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