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Patent Tip - When You Sell Your Company

An Article by Nicole Toomey Davis
Brain represented by gears

Patent Tip – When You Sell Your Company

By Nicole Toomey-Davis
Originally published on VentureWrench
Often times startups end with the sale of the company, Sometimes this is “early” in development, sometimes it is later. You have built value by developing intellectual property including patents and patent applications.  When selling a company, after you’ve assigned the rights and sold your company (although you are the inventor listed on a patent), you no longer control that patent or a pending application.
In fact, once you’ve sold the company and the patent, under certain circumstances you’re not even allowed to get information about the progress and prosecution of that patent application!  However, it’s still in your professional best interest for that patent to be prosecuted so don’t drop the ball!

If you plan to sell your company, here are some suggestions to protect your patents:

    • Get the acquiring company’s agreement in the contract that they will use all reasonable efforts to prosecute the patent(s) and protect the IP (Intellectual Property) developed under your leadership.  This means they can’t just drop it when there’s a question from the PTO.
    • Put in writing that they will keep you appraised of the status of the patent prosecution at least every 6 months (and if they don’t, that you have the right to go directly to Counsel and obtain such status info).
    • Require the acquirer to include you in the prosecution efforts to strengthen the case

In short, make sure you always create a patent agreement when you sell your company, so you make sure the patent is pursued AND increase the chances you will be able to list that patent granted next to your name!

Nicole Toomey Davis is a serial entrepreneur and the President & CEO of Enclavix, LLC, creators of, a free curated library of the best resources to help entrepreneurs.  This blog post originally appeared at