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By J.D. Houvener
Patent Attorney and Founder

Hi everyone I’m JD Houvener your host to the bold today’s show we’re here with the inventor entrepreneur business owner get your daily dose of inspiration to make the blog a better place happy Friday everybody we’ve made it to the end of our five-part series about patent licensing and this is about negotiating royalty rates this is the funds bar this is where the rubber meets the road and your patent attorney your advocate gets to step into the ring and negotiate the best terms possible for you the licensee or license or in getting that best deal and I want to talk today about what those terms are before we get to that I want to hear from you about negotiation right and this is one of those things that sometimes comes naturally to some people some people just it just kind of makes you feel awkward and you just hate to ask right if you’re the kind of person you know that loves to go to garage sales for example and always like to kind of barter tell us about that but not the garage sale tell us about your most recent experience negotiating in business and what are some of the tips you have we all including me and learn from each other so put in the comments below if you’ve got the guts share with us some of your negotiation tactics all right so today we’re talking about the royalty negotiation right this is the biggest part of the contract this is what every inventor thinks about is how much money am I gonna get what’s my percentage rate in the contract okay well it’s not just about pulling a number out of the air right it’s about putting together a discernment over what the terms are right what what is it you’re giving up or the scope of information the ability for that license or what are they really getting in exchange for the money and so some key terms will make up a lot to do with what the patent will be but there are some high-level guidance in general more mechanical and simple inventions will warrant a lower rate then we’ll a safe pharmaceutical invention or a computer science software invention that’s only to say that because of the general tendency and the ease of be able to get an invention granted through the Patent Office it’s much easier with a mechanical or manufacturing method than it is to get a new pharmaceutical or a computer science business method through the Patent Office so those two we can kind of this give you a nice high level summary but beyond that looking much more into the details what’s going to make a difference in terms of the rate you’re gonna get okay number one the strength of the patent or how strong is your patent the claims themselves are they valid do you have an opinion from an attorney that that definitively outlines in today’s law that your claims are valid that boosts the strength of the patent and it’s going to bring a higher percentage of royalty number to the scope of the claims how broad is your invention right you could have the most bulletproof valid claims but it could be to just you know the type of coating on a nut fastener okay well the breadth of claim there would be quite narrow and thus the percentage of royalty quite small number three is it exclusive or non-exclusive what’s the type of right being given is this person going to be the only person in the world that has the ability to make and sell this invention that makes a huge difference in terms of how much percentage you’re gonna get back as a licensee number four the territorial extent right how big right are they able to what geographic area will they be able to sell to are you limiting their rights to sell just to the US or you allow them to sell in the whole world demand how you give that license right will depend a course on how much money you get back in return of your royalty last but not least there’s a susceptibility to design around this is a little bit of a great criteria but it means you know how many competitors are there in the market and one of the products out there on the market is this a just an improvement over a current existing product or is there’s a completely different game changing technology again this will weigh in very heavily in terms of how much royalty you get in return for your license agreement that’s how you negotiate is making sure you break down the agreement into logical steps in terms of how much marketability this invention is going to have having a patent attorney by your side is key and making sure you have a lot of your questions answered upfront is also important to us so please visit our website at bold patents com there you can be able to find good information about the patent law system and about licensing particularly if you still have questions I want you to book a free 30-minute consultation to get all your answers all your questions answered and they bring forward anything else you have questions about without to hear from you I’m your host JD Houvener and hope you all have a wonderful weekend ahead go big go bowl

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About the Author
J.D. Houvener is a Registered USPTO Patent Attorney who has a strong interest in helping entrepreneurs and businesses thrive. J.D. leverages his technical background in engineering and experience in the aerospace industry to provide businesses with a unique perspective on their patent needs. He works with clients who are serious about investing in their intellectual assets and provides counsel on how to capitalize their patents in the market. If you have any questions regarding this article or patents in general, consider contacting J.D. at