How to license an invention without a patent

How to license an idea without a patent

Do you want to patent a novel idea but need more funds? Your idea can be licensed without a patent. Many successful products have been licensed without a patent, and it all comes down to having the right strategy and approach.

This blog post covers how to license your idea without a patent. We’ll cover the importance of protecting your idea, how to find potential licensees, and how to negotiate a fair and profitable licensing agreement.

Whether you are an inventor, entrepreneur, or have a great idea, this post will help you learn how to commercialize your idea. So let’s get started!


But first!

This post is meant to be a brief overview of the topic that starts you in the right direction. Every situation is different, therfore, there is no one size fits all answer. Anyone that tells you otherwise is not looking out for your best interest. To understand what you personally need to do in regards to your idea, the best way is to simply chat with a professional. 

Overview of Licensing Without a Patent

Patent-free licensing can protect intellectual property. Licensing is a contract that allows one party to use another’s intellectual property (IP). IP includes inventions, trademarks, logos, copyrights, trade secrets, and other commercial works.

Patents are very powerful and offer exclusive rights to an inventor for a specified period in certain geographical areas. Patents are expensive and hard to get. It can take years and require costly legal expenses to obtain a patent. -This deters inventors who want to launch their products quickly.

However, licensing without a patent can protect the inventor from competitors and help them profit from their IP. Licensing allows others to use an invention or idea for royalties. A license agreement usually specifies the other party’s IP use and duration. The agreement will also set the royalty rate.

An inventor can also control who uses their IP with a licensing agreement. It can restrict IP use and disclosure. -This protects the inventor from others using their idea without credit or royalties.

Understanding Patents and
Intellectual Property

A patent grants its owner the exclusive right to make, use, or sell an invention for a set time. Inventors and innovators can profit from their creations with patents. Patents are often the first step in commercializing new technology by licensing an idea or invention.

Law-protected creations are intellectual property. Books, music, software, trademarks, and patents are copyrighted. Creators can profit from intellectual property.

Patent law allows inventors to exclude others from making, using, or selling their inventions in a given jurisdiction, encouraging innovation. To get a patent, one must apply at the relevant patent office and prove the invention is new, useful, not obvious to experts in the field, and commercially viable.

Without a patent, licensing an idea may require other IP protection. Copyright can prevent unauthorized copying of work or design. Trademarks can also prevent competitors from stealing brands and logos. Confidential information agreements can protect trade secrets and other sensitive information.

What to Include in a
Licensing Agreement

A licensing agreement is a legally binding contract between the licensor (you) and the licensee (Who you want to license your idea). Because intellectual property is valuable, licensing agreements should protect both parties. Every licensing agreement should include these essentials:

• Identity of Parties: This section should include the licensor and licensee’s full names, addresses, and contact information.

• Term and Renewal: This section specifies the agreement’s duration and renewal options.

• Product/Brand Details: This section should describe the licensed product or brand and any special usage rules.

• Licensing Fees: This section specifies licensing fees.

• Licensee Representations and Warranties: This section should guarantee that the licensee will not violate third-party rights or local laws when using the licensed product or brand.

• Termination: This section describes what happens if either party breaks the agreement. It should also explain how either party can terminate the agreement in good standing.

• Indemnification: This states that either party is responsible for any litigation or disputes resulting from a breach of contract.

Licensing Consultants We Recommend

Alternatives to Patenting an Idea

1. Copyright: Copyright protects creative expression but not ideas. Without patenting, this can protect an idea, like a software program. Copyright usually lasts 70 years after the author dies.

2. Trade Secret: Any non-public information or material with commercial value is a trade secret. -This can protect an idea or invention from competitors if the owner limits access and has employees sign a nondisclosure agreement.

3. Design Patent: A design patent is a type of patent which covers the ornamental design of a functional item. -This can protect an invention’s appearance without covering its function or operation under utility patents.

4. Non-Compete Agreement: A non-compete agreement is a contract between two parties which restricts one party from competing with the other. -This can be used to prevent direct competition with an invention without obtaining intellectual property protection.

5. Nondisclosure Agreement: A nondisclosure agreement, also known as an NDA, prevents parties from sharing confidential information without permission. -This can prevent accidental disclosure of an invention or idea without intellectual property protection.

Assessing the Market for Your Idea

Assess the market for your idea before licensing it without a patent. Understand who will be interested in the idea, what type of product or service it is, and who the potential customers and competitors are. -This will help you license your idea and estimate its market size.

Consider similar products and services when assessing your idea’s market. -This will help you assess the competition and find customers. It would help to examine industry trends and how they may affect your idea. How can you green your product or service if sustainability is a priority?

After understanding the market and potential customers, research intellectual property laws that may affect your idea. -This includes conducting a patent search to ensure you are not infringing on anyone else’s rights. Suppose a similar concept has already been patented. In that case, it is important to determine how that patent is licensed and if any restrictions could limit your ability to license your concept.

Finally, consider the financial value of licensing your idea. You must consider licensing fees and marketing, manufacturing, and distribution costs. -This will reveal your idea’s licensing earnings potential.

Leveraging Trade Secrets for

Patents are typically used to protect ideas and intellectual property. Patents may not be the best way to protect business methods, processes, or software. Trade secrets can replace patents.

A company’s manufacturing processes, products, business strategies, etc., are trade secrets. Trade secrets are a good alternative to patents for protecting ideas.

Companies are not required to file for trade secret protection, but the secret must remain confidential to retain its value. Instead, ongoing efforts must be made to protect the information or idea.

Companies can protect trade secrets with NDAs, password-protected databases, and locked filing cabinets.

Trade secrets can be protected indefinitely if they are kept secret, unlike a patent, which lasts 20 years from filing.

Trade secret protection costs much less than patent filing. Patents require a lengthy and costly government review and approval before they can take legal effect, including application and annual renewal fees.


Ensure any customer or business partner you work with within the licensing process is reputable and that you have protected your intellectual property with nondisclosure agreements, copyright laws, and other legal means. You can license your idea without a patent and protect it from infringement with the right strategy.

We at Inventor Genie have interviewed a lot of inventors. Both those who have succeeded, and those who failed. Though one size does not fit all, this has given us a great understanding of what those who succeed do differently than those who fail. This perspective is reflected in our blogs and our free Inventor’s Journal as part of our mission to increase the inventor’s chance of success. If you are a successful inventor or Service Provider in the field and want to write a blog about your own perspective, feel free to reach out.

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