Questions:

• How can an inventor make money with a patent?
• What does it mean to "license" an invention?
• Can inventors who are employed by a company benefit from their own inventions?

Answer:

How can an inventor make money with a patent?

Some inventors start new companies to develop and market their patented inventions. This is not typical, however, because the majority of inventors would rather invent than run a business. More often, an inventor patents the invention but makes arrangements with an existing company to develop and market the invention. This arrangement usually takes the form of a "license," a contract under which the developer is authorized to commercially exploit the invention (for a period of time) in exchange for paying the patent owner royalties. The royalties may be a percentage of the net revenues or may be a payment  for each invention sold. Alternatively, the inventor may sell all of the rights to the invention for a lump sum or royalties (known as an assignment).