The Licensing Mindset...

Understanding Where Your IP Fits

 

When it comes to intellectual properties, one size does not fit all. It's important to know how your IP applies or fits into the marketplace. You must have an understanding of where it fits in the customer market, how's it's made, produced and distributed, because a big part of successfully licensing your IP is presenting it in a way that demonstrates that your IP will, in fact, be profitable to license.

 

For example, you may be an inventor of products, think beyond just creating a type of product; perhaps there is a niche opportunity or a different way the product could be used that would apply to your product, such as a new shoe for ice skating that with a few design changes can be adapted for rollerblading.

 

Begin to think about where your IP fits, both in large and niche markets, because the better you can demonstrate the marketability of your intellectual property, the greater success you're going to have in licensing your IP.

 

Strategy Session ...

Taking Action with Your IP 

  

Once you've secured rights to your intellectual property, what's next? You should have a strategy to take action with that IP . Make contact. Act on it. That's the most important thing - you have to take action with your IP. If you don't take action, nothing gets done.

So what's your action plan? How do you take action? What's involved? There are three basic licensing strategies you could apply:

   

The first strategy is to license your IP directly... meaning your marketing strategy is to use licensing as your plan of action to commercialize the IP and generate royalty revenues. You may manage the licensing program yourself, or you could retain the services of a licensing agent or other third party.

The second strategy is a joint venture. The joint Venture of JV would license the rights to the IP. This strategy could be used for completing some development work on your IP, such as prototypes or test marketing. It's a good licensing strategy for your IP if you think you may want a more active level of participation in the long run. Think of joint ventures as your partnership for resources.

The third strategy to consider is sublicensing.  A sublicense approach is best for intellectual properties that can be licensed to multiple licensees for different products, such as brands or characters. This strategy allows your anchor or main licensing partner go out and license the IP to other licensees in different product categories. In return your master licensee would receive a percentage of the sublicensees royalties and would manage the licensing program. A good option to leverage your IP without having to actively manage the full licensing program.

These three broad licensing strategies - direct licensing, joint ventures, and sublicensing - are all opportunities that exist for you, right now. As you begin to think about your licensing strategies, consider these three as your bird's-eye view. Then, from there, begin to look at more niche or segment-oriented strategies such as consumer specific, or for a specific sports category or perhaps even a new application of a product or service.

Did You Know...

 

The consulting firm IBISWorld estimates the 2010 U.S. domestic intellectual property licensing and franchising market to be US$27.5 billion with 20.3% of that total (or US$5.58 billion) attributed to patent and trademark licensing royalty income alone.

Source: IBIS World

Negotiating Checklist - IP Improvements

 

In the world of intellectual property, there are always opportunities for improvement. This month we highlight the key terms that deal with any improvements made and/or patented (by whom and paid for by whom) during the term of the license by either the licensor or licensee.  

 

Improvements also cover whether or not to include future IP improvements under the current license or to have any future IP improvements automatically belong to the licensor or IP owner (otherwise known as the reservation of rights in legal talk).

 

Here are some of the key terms that would be included under IP Improvement:

• Included (in the current license)
• Not Included (in the current license)
• Who Will File (Licensee or Licensor)
• Who Will Pay Costs (Licensee, Licensor or both)
• Assigned / licensed to Licensee/Licensor 

Trends of the Times ... Branded Car Wraps

 

  

 

Smart USA Distributor and Sanrio, Inc. recently announced a partnership that offers smart car wraps featuring Hello Kitty in commemoration of Sanrio's 50th Anniversary.  

 

The smart Expressions program offers Hello Kitty wraps in three different full body designs, each with a selection of color schemes, in addition to a series of partial wrap designs and colors. In total, there are 22 full and partial wrap design and color combinations from which to choose.  

 

Hmm... Would you wrap your car with Hello Kitty, Bugs Bunny, Batman or Mickey Mouse?  

 

Click here to check out the Hello Kitty Smart Wrap catalog.

  

Introduction to the Licensing Process

 

Interested in learning more about licensing?  Check out this 6 minute introduction.