Definition: A patent is a government-issued legal right that grants an inventor or assignee exclusive rights to make, use, sell, or license an invention for a defined period of time, typically 20 years. In the context of selling a business, patents are more than just intellectual property—they are tangible assets that can significantly impact valuation, negotiating leverage, and buyer interest.
Why Patents Matter When Selling a Business
If you’re preparing to exit your business within the next 6–24 months, understanding how your patents—or lack thereof—affect your company’s valuation is critical. Patents can:
Protect Key Differentiators: Buyers are drawn to proprietary technology, processes, or products. A valid patent portfolio reduces the threat of competition and protects your innovation.
Increase Valuation: Patents are considered intangible assets that can be quantified during a business valuation. Companies with patented IP often command higher multiples.
Drive Buyer Confidence: When intellectual property is documented and legally protected, due diligence becomes smoother and more favorable to the seller.
Fast Fact
🔍 Businesses with patent protection are 35% more likely to secure favorable acquisition offers, especially in industries like manufacturing, technology, health sciences, and consumer goods.
Common Patent Pitfalls (and How to Avoid Them)
Before you even think about listing your business, make sure you’re not making these mistakes:
Assuming a product is protected just because it’s “unique” Without filing for a patent, your idea may not be protected—and could even be copied legally by competitors.
Failing to assign patents properly to the business entity Patents owned personally (not by the business) can delay or derail a sale if not addressed early.
Letting patents expire or lapse Missing renewal dates or maintenance fees can strip a patent of its value—buyers will notice.
How to Prepare Your Patent Portfolio Before a Sale
✅ Conduct a patent audit List any filed patents, pending applications, or unprotected inventions. Work with a business advisor or IP attorney to clarify ownership, scope, and current status.
✅ Document everything Keep copies of filings, approvals, assignments, and renewal notices in a digital deal room or central location. This simplifies buyer due diligence.
✅ Highlight patent value during marketing A broker or M&A advisor can position your patented IP as a value driver in buyer presentations—don’t leave that leverage on the table.
What If I Don’t Have Any Patents?
That’s okay—but it’s still important to assess your business’s intellectual property. You may have:
Trade secrets
Proprietary processes
Trademarked branding
Copyrighted content or software
These are also valuable—but they require different protections and positioning during the sale process. Explore more in the Preparing Your Business for Sale section of our website»
Related Resource
🗓️ Upcoming Webinar: “Planning Your Successful Exit” Exiting your business isn’t something you do overnight—it requires strategy, timing, and planning. Join Rich Giles, Founder of Trending Up Business Services, for a free webinar on how to prepare your business for a sale that aligns with your long-term goals.
📅 Date: Tuesday, July 9
🕑 Time: 2:00–3:00 PM CT
Bottom Line
Whether you have a robust patent portfolio or are just realizing your IP potential, it’s crucial to treat patents like the strategic assets they are. At Trending Up Business Services, we help owners identify and maximize the value of their intellectual property before it becomes part of the deal table. If you're planning to sell your business, make sure your patents are working for you—not holding you back.
