How to sell intellectual property: A quick guide

Did you know your small business likely has valuable intellectual property? You could sell this intellectual property and turn these assets into a profit. 

That idea might sound appealing, but it’s okay if you’re not entirely sure how to sell intellectual property or even about what it is. This concept can be challenging to grasp. Luckily, we’re here to help.  

This quick guide covers how to sell intellectual property. We’ll cover:

• What intellectual property is. 
• How to value your intellectual property.
• How to find a buyer for your intellectual property. 

Intellectual property (IP) is an intangible (or non-physical) asset that adds value to your business. It’s something you developed from your ideas and knowledge.  

IP can belong to you, multiple people, or to a business. You can also sell it for a profit. 

You can protect your intellectual property and prepare it to sell with the proper licensing. As you give up the rights, you can transfer them into cash. 

Intellectual property belongs to you if you:

• Created it (and properly licensed it).
• Bought it from someone else. 
• Own a brand that you can trademark. 

You can sell a lot of different types of IP, including: 

• Inventions – anything unique you developed that you have patented or licensed, such as products or app software code.
• The names of products or businesses – If you trademarked them.
• Things you write, create, or produce – Such as stories, scripts, podcasts, songs, artwork, logos, or other designs you have the copyright for. 

For example, say you run a podcast business and someone is interested in buying your podcast name or owning the episodes you created. You’d be selling intellectual property in this transaction.

As a self-employed person, you often own the rights to work you do for other people unless your contract says otherwise. On top of this, you may develop IP as part of creating or promoting your business. 

But to clearly define and sell your intellectual property, you’ll first need to protect it. You can do this by: 

• Copyright – protects your written and audio work so others can’t use it without your permission. In the UK, you don’t have to register for copyright. You earn it automatically. 
• Trademarks – can protect the name of your brand or products. With this, you can sell and license your brand and take legal action against people who use it. 
• Design rights – allow you to register the appearance of a design you created so people can’t steal it. 
• Patents – let you claim an invention as your own so others can make or sell it without your permission. 

These labels legally protect your property and secure it as your own.

To learn more about how to protect your specific intellectual property, use the UK government’s Intellectual Property Office’s IP Health Check tool. 

Learn more about the laws behind intellectual property with our article on the Copyrights, Designs and Patents Act. 

Since you can’t hold intellectual property in your hand, these assets can be challenging to value.  

Do you know that saying ‘art is only as valuable as someone is willing to pay for it’? That’s not entirely true when it comes to intellectual property. In reality, you can put a number on your IP using a few tactics. 

To value your intellectual property, you can assess: 

• The money you invested in it.
• The profit it earns. 
• Comparable market prices.
• Potential royalties. 
• Brand recognition. 

The property itself may not have a clear price tag. But, looking at the cash and value that it creates can help you determine what it’s worth. 

Also see: How to trademark a business logo. 

Say you plan to sell the software to an app you developed and patented. 

To determine the value of that app, you can first calculate what you spent to develop it and how much it has earned so far. Then, you might look at how similar apps were publicly valued to establish a price point. 

To get a more solid idea of what this app is worth, you can see how many downloads you have. Plus, assess its popularity on social media and media coverage. 

Coming at your intellectual property from several angles helps you come up with a realistic number to sell it for. Though you might open up a negotiation with a buyer, this value estimate can show you where to aim. 

To sell your intellectual property, you’ll need a buyer. If someone hasn’t approached you with an offer, it might be a good idea to inform people that your IP is for sale. 

Though you may not want to market your intellectual property to everyone, you could research the right buyer. First, consider who might benefit from what you want to sell. 

For example, you may want to sell the rights to a product you invented. In this case, you could look at businesses within this product’s market. 

Targeting larger companies will increase your success rate because these companies have more money to spend on purchasing patents. 

Once you earn a bite, you may need to pitch your property to close the deal. You’ll need to show potential buyers why this investment is worth it. 

When putting together a strong sales pitch, consider how your IP:

• Will make the buyer’s life easier. 
• Will earn them money. 
• Will increase in value over time.

For example, you could show how your intellectual property impacts their business. Buying this property removes the competition, which leads to increased sales for their business. 

Plus, prove how much you earn from the IP. Concrete information backed by data will help buyers see that this purchase is the right choice.

Want to sharpen your sales skills? Check out our article on how to improve your sales pitch. 

Once you know how to sell intellectual property, you can start transforming it into a profit for your business. But as you bring in more money, you’ll need to stay on top of it. 

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