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The Money Making Power of Intellectual Property
March 2013 Issue
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Greetings!
Welcome to the March issue of
Licensing4Profits.
You may be overlooking one of your most valuable IP assets - trade secrets. This month we review trade secrets - what they are and why they are important in Leveraging IP: What's Your Trade Secret?.
The focal point of any licensing negotiation is a powerful presentation and this month we review how to make compelling presentations in Strategy Session: 10 Tips for Creating Power Licensing Presentations.
Learn about the licensing process - what it is and how it works - in this month's Video Licensing Lesson.
License agreements come to an end in two ways and our next article, Key Terms & Conditions, discusses the Expiration and Termination clauses in licensing agreements.
Next you can learn what the rubber band, the movie "42nd Street" and the wheeled suitcase have in common in This Month in IP History.
Licensing offer a number of money making benefits and in this month's Licensing Webinar we'll discuss 7 of those benefits.
We conclude this month's newsletter with the licensing question "What is the normal percentage you would offer a licensing agent for getting your product licensed by a major manufacturer?"
Enjoy!
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Leveraging IP - What's Your Trade Secret?
 Trade secret law is the oldest form of IP protection. Trade secrets are most often in the form of inventions, know-how, and show-how information that gives you a competitive advantage. Examples of types of trade secrets include formulas, recipes, software, business processes, databases, customer lists and proprietary information. Anything that takes time, money, or effort to develop and that you don't want your competitors to know.
Unlike other forms of intellectual property such as patents, copyrights and trademarks, trade secrecy is basically a do-it-yourself form of protection. You don't register with the government to secure your trade secret; you simply keep the information confidential. Trade secret protection lasts for as long as the secret is kept confidential. Once a trade secret is made available to the public, trade secret protection ends.
Trade secrets, unlike patents, can be licensed forever. Even if a trade secret subsequently enters the public domain, royalty payments under trade secret licensing agreements can continue indefinitely.
Here is a list of some of the most well known (and valuable) trade secrets:- Mrs. Fields Chocolate Chip Cookies (what makes them so yummy?)
- The New York Times Best-Seller list (how do you get on this list?)
- Listerine Mouth Wash (it's been around for almost 100 years)
- WD-40 (this stuff works on everything)
- Twinkies (we still don't know how they are made)
- Krispy Kreme Doughnuts (hot off the line and into your hands)
- McDonalds Special Sauce (it's on the Big Mac)
- Kentucky Fried Chicken (supposedly it has over 30 different seasonings)
- Coca Cola (enjoyed by millions around the world)
- Google (its proprietary search algorithm let's you find anything)
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Strategy Session - 10 Tips for a Powerful Presentation
 The foundation of any licensing negotiation is a powerful presentation. The licensing presentation makes the case for why a company should license your IP. The secret is to make the presentation as compelling as possible to justify the time spent negotiating the IP license.
Here are 10 tips to for developing a "Show Me the Money" presentation:- Know Your Numbers - When it comes to selling an IP license, nothing sells the deal like numbers promising future success.
- Avoid the Hype - Don't "puff up" the presentation with words like "awesome", "amazing", or anything else that makes it too good to be true.
- Make it Logical - Deliver the presentation in a logical sequence, with each slide or point building upon earlier ones.
- Skip the "Happy Talk" - Don't fill the presentation with irrelevant information, such as the life story of how you developed the IP.
- Focus on What Matters - By staying laser-focused on the benefits of licensing your IP, you can lead the potential license down the road to a mutually beneficial license.
- Less is More - It keeps the potential licensee's attention, exudes confidence and proves that you know the value of your IP.
- Address the Tough Questions - It helps the potential licensee have confidence in the facts of your presentation.
- Rehearse, Rehearse, Rehearse - The result will be a finely tuned and polished presentation that delivers a compelling story.
- Consult Your Legal Adviser - To make sure there are no statements which can come back to bite you if a dispute arises.
- Close by Stating Exactly What You Want - Such as why you believe your IP is right for the licensee.
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Feel free to pass this newsletter along to friends and associates. You can visit www.licensingcg.com to view other free reports and presentations. If you are interested in learning about our consulting services and coaching programs, please contact us at (646) 395-9572 or email info@licensingcg.com.
Best Regards,
Rand Brenner
President & CEO
Licensing Consulting Group
About Rand Brenner
Rand has licensed some of the biggest Hollywood blockbusters, including "Batman" and the "Mighty Morphin Power Rangers", both of which generated billions of dollars in worldwide merchandise sales. His career included executive positions at Saban Entertainment and Warner Bros Consumer Products where he developed numerous licensing and promotional deals with Fortune 1000 companies.
Rand Brenner is the President & CEO of Licensing Consulting Group, a full service intellectual property management company. LCG provides IP management, strategy consulting, and property representation. For more information, please visit our website or send an email to info@licensingcg.com.
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Video Licensing Lesson  | | The Licensing Process |
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Join Our Mailing List!
Sign up for our newsletter and download a free copy of Introduction to Licensing Part 1: Making Money with Intellectual Property.
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Key Terms & Conditions - Expiration and Termination
License agreements come to an end in two ways. The first is when the term or period of the agreement expires after a specified time, such as two years. The second way is that the agreement is terminated before it expires due to the IP owner or licensee failing to perform in some way and/or violates (breach) a condition of the agreement. Some examples are not making payments when due, not getting licensor approvals as required, or failing to produce and sell the licensed products.
Here are some of the types of expiration and termination clauses that are typically included in licensing agreements: - Unless terminated earlier, this agreement will be valid until XX date.
- Licensee may terminate the agreement if IP fails to perform for technical, regulatory, scientific, political or economic reasons.
- Licensor may terminate the agreement if licensee does not develop, make or sell the licensed product by XX date.
- If licensor terminates agreement for cause (i.e. licensee did not perform), all rights to IP return to licensor.
- If Licensee goes bankrupt, license is terminated and all rights in IP return to licensor.
When preparing or reviewing a licensing agreement, it's always best to seek qualified legal advice before you sign anything.
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This Month in IP History
- 1845 - The first rubber band was patented by Stephen Perry of London.
- 1933 - "42nd Street" the movie, was copyrighted.
- 1994 - Don Ku granted a patent for a wheeled suitcase with a collapsible towing handle.
Source:About.com |
Licensing Webinar - The 7 Money Making Benefits of Licensing Licensing is a marketing strategy that all inventors, entrepreneurs, established businesses and emerging start-ups should consider in today's challenging economy. This webinar will discuss 7 key benefits of licensing and how you can use those benefits to create new money making opportunities in today's marketplace. During this webinar, we'll discuss the 7 Key Benefits of Licensing including: - Launch New Products - The Fast Track to Retail
Expand Your Reach - Tap New Markets - Poor Man's Advertising - Riding the Coattails
- Test New Products - Using Other Peoples Resources (OPR)
- Create New Revenue - Leveraging Licensing Partners
- Increase Brand Equity - Build Brand Value
- Gain a Competitive Advantage- Profit from Proprietary Rights
Understanding these benefits will give you the information and insight on how and why licensing is one of your best marketing strategies for quickly tapping new markets, reaching new customers and creating new revenue sources. To view webinar, click here or use this link: http://licensingconsultinggroup.com/webinars/the-7-money-making-benefits-of-licensing/. |
Ask Rand Brenner
Q: What is the normal percentage you would offer a licensing agent for getting your product licensed by a major manufacturer?
A: Commissions for licensing agents generally average between 30% to 40% of gross licensing revenue, and may run as high as 50%. In addition, some agents require you to pay part or all of certain expenses incurred by the agent in representing your IP. These expenses may include trade show costs, costs of creating promotional packages and display and solicitation materials, travel costs and legal fees. You should insure that the agreement specifically identifies all costs to be paid by you. In addition, you may want the right to approve all expenses in advance, and may want to impose a cap on the total amount of expenses for which you will be responsible.
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.
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The information in this newsletter is presented by Licensing Consulting Group as a service to the subscribers. Although the author attempts to keep this information current and accurate, he makes no warranty or guarantee that it is correct, complete or up-to-date. This newsletter may contain links or be linked to other web sites not maintained by Licensing Consulting Group. The author makes no representations, express or implied, with respect to the materials and information provided on any third-party web site linked to this newsletter, including any representations as to the accuracy, timeliness, reliability or completeness of any material or information on such linked site. Inclusion of a link in this newsletter to another web site does not imply recommendation, approval or endorsement by the author of the linked site.
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