The time period from filing a patent application to receiving a patent can last many years. In technologies such as software, biotechnology and communications, USPTO backlog often results in a three year (or longer) delay for an application is even reviewed. However, inventors often find — or would like to find — others who are interested in licensing a technology before the patent issues.
Are there opportunities for licensing revenue for a pending patent application? Sure, if the circumstances are right. University technology transfer offices license pending patent applications all the time, and they even require the licensee to pay for future patent prosecution costs. The key is to convince a licensee that it has something to gain by paying a royalty before the patent issues. Some situations in which a royalty may be easier to get include:
- where the patent application has not yet published, and the licensee is also paying a royalty for the ability to obtain confidential information;
where the patent applicant has useful know-how that is not included in the patent application, the licensee may also pay a royalty to gain access to that know-how; and
where the applicant is willing to offer the licensee a reduced long-term royalty, some level of exclusivity, or another benefit in exchange for royalties while the application is still pending.
For example, if a licensee also desires to be trained in a process that is related to patent-pending technology, the applicant could train the licensee in the method, bind the trainee to a confidentiality obligation for trade secret aspects of the method, and establish that the trainee must pay a royalty any time that the trainee uses the technology for commercial gain.