How do you collect your royalties?
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How do you collect your royalties? Video Transcript
The question is how do you collect royalties from your invention? You collect royalties from your invention by enforcing your rights of the patent. If you have an issued patent, that is when you potentially collect royalties, you need to market your idea, your technology and your patent to potential licensees. Send them a letter and meet with them, explain to them what you have. Depending on the industry, some companies and some industries are more amenable to signing licensing agreements and royalty agreements than others. You might need to draft the royalty agreement, say exactly how much you want in royalties, whether it is a percentage of revenue or whether it is a fixed amount per year, and what is the limited scope of what those rights that you might give along with the patent are. Certainly, you need to make sure that other company is infringing your claims to your patents. You need to map your claims to what they are doing in the product. So you have your ducks in order in case they disagree with you because not every company is going to be openly excited to be handing you money for royalties. If they are building a product for you, then that is different, then certainly they can perhaps have a joint agreement where they are licensing your patent or building and marketing your patent separately. Some inventors will set up their own companies for the purpose of monetizing and collecting royalties. That is another good avenue to shield personal assets from corporate assets.