Licensing is a fast way to get your intellectual property to market. Licensing can be done in months vs. the average 2 years it takes to start and grow a new business.  

I often meet inventors attempting to build a company around their intellectual property, and their biggest stumbling block is finding capital.  As any entrepreneur can tell you, raising money for a new venture can take a long time.

This is a problem that can be solved through licensing by finding a company with the expertise and resources to bring your IP to market. In effect you are plugging into a company that is already in motion. When thinking about how to make money with your IP, consider licensing as a fast track to the marketplace.

Intellectual Property can move your business forward and increase its value faster than a business without IP. Often times, a small business may overlook its IP assets such as information, innovation, content, brands, names, reputation, websites and more. These IP assets provide a number of strategic options to keep your business moving.

One way to leverage your IP assets is to increase revenues by charging a premium for your products or services. An example is generic cola v. COKE. Why is one worth more? Because Coca-Cola is using its IP to enhance the value of a simple commodity. It receives a premium because it has a secret formula and a distinctive well-known brand. Coke's formula is protected as a trade secret and the brand is protected as a trademark.  

A second way of leveraging your IP assets is to earn additional revenues by licensing other companies to produce and sell products/services with your IP. A good example is Microsoft, which turns the output of software development into intellectual property that can be licensed and sold. In this case Microsoft uses copyrights and patents to secure its IP rights and keep others from copying its products.

A good way to identify your IP assets is to evaluate everything that gives your business a competitive advantage (why do my customers buy from me), look at other forms of IP (i.e. know-how), and review all written materials and artwork related to your trademarks (otherwise known as goodwill).  

• 1790 - The first shoelaces were invented.
• 1876 -  Alexander Graham Bell was granted a patent for the telephone.
• 1944 - Abbott and Costello's "Baseball Routine", also known as "Who's On First" was copyrighted.

One of the agreements used in the licensing process is a confidentiality, or nondisclosure agreement. Typically these remain in "effect" during the term of the license agreement. However, if an NDA was not done, then a section dealing with terms of confidentiality can be included in the license agreement. Even if an NDA was signed, confidentiality can be included in the licensing agreement, and this clause would typically replace the earlier NDA agreement.  

Here are some of the key terms of the confidentiality clause:

• Licensee obligated / Both parties obligated
• Confidence maintained for specified time / without limitation as to time / life of agreement
• Until published by owner
• Existence of this agreement confidential
• Terms and conditions of this License to be kept confidential 

Ask Rand Brenner 

Q: If my invention fits in 3 categories (toy, gift, and pet markets) do I search for 3 different licensees?

A. Yes, you can license 3 different companies, which is a great strategy to leverage the money making options for your IP. A good example of this strategy is stuffed toys, otherwise known as plush. These plush products are sold in toys stores, gift stores and pet stores. The price and manufacturing quality are different for each market, and the companies selling to these channels specialize in these product categories.

Got a question about licensing? Send an email to askrandbrenner@ licensing4profits.com.  

You'll get an answer to your question which will be included in a future issue of this newsletter.