Strategy Session: Cross-Licensing

Cross-licensing is an agreement between two or more intellectual property owners where each one grants the other rights to their intellectual property. Usually the IP that each party owns covers different aspects of a product or technology. Cross- licensing is a strategy that's used to settle patent disputes and for developing new relationships and partnerships.

For example, two companies both have patents that if commercialized will infringe upon the other. They agree to exchange these rights, allowing each company the freedom to commercialize products covered by the others patents without provoking a patent infringement lawsuit. Certain industries, such as high tech, use cross-licensing frequently because they have such large IP portfolios that they cannot practically avoid infringing on each others patents.

For partnerships, cross-licensing is a good option when two competing firms with different research and development strengths can take advantage of the other's progress. This creates the same sort of synergy as a joint venture without having to set up formal joint operations.

Cross-licensing is also used to access new innovations and markets that are created from two different intellectual properties. Company A has a patented new drug compound for blood pressure. Joe the Inventor notices that hair grows back on his bald head when he takes the blood pressure pill in combination with a glass of orange juice. He gets a patent on a method for hair regrowth. Neither the Company nor Joe can make any money without cross-licensing from each other. Joe can't sell the pill because Company A has the patent on it, but Company A can't sell the pill as hair regrowth treatment because Joe has the patent on that. In this case, Company A would likely pay Joe for a license to his method, and then both sides would make money on the IP.

Other non-patent intellectual property such as copyright and trademark can also be cross-licensed. For example, a literary work and an anthology that includes that literary work may be cross-licensed between two publishers. A cross-license for computer software may involve a combination of patent, copyright, and trademark licensing.

Cross-licensing is a relatively low-risk strategy for two IP owners to exchange intellectual property so each can make money without infringing upon the other. It's also a good strategy to consider when seeking a development partnership or to share new market opportunities.

Leveraging IP: Licensing Your Training Courses

Licensing training courses is a lucrative strategy for generating additional revenues without the time and expense of delivering the course yourself. Unlike selling your training course, licensing let's you control the conditions and use of your intellectual property.

The best approach for negotiating a licensing deal is to first find out what the licensee is interested in doing with the training course. For example, do they want the rights to use the IP as a stand alone course or do they want to include it as part of a bigger training program? Do they want to customize part of the course for a specific situation, or brand it with their company logo or identification? Understanding what they want to do helps you determine the best way to structure your licensing deal.

One of the trickiest parts of the licensing deal is figuring out the royalty or licensing fee. In smaller organizations, a per user or customer fee is often the most common royalty structure. Larger organizations with hundreds of users or customers will most likely want a blanket or volume discount licensee fee for the entire company. This is often the case when a company doesn't know how many employees will actually be using or attending the course.

The most common ways of licensing course content include Right to Reproduce, Right to Use, or Right to Copy. Determining which of these options to use will depend on the needs of the licensee. For example, the Rights to Copy often works best for a company that wants to offer the course materials in their own "packaging". For larger licensees, rights to reproduce is a better option to minimize inventory and tracking of each course package.

When negotiating the licensing deal, be sure to clarify how long the licensee can use the course materials, and what happens to your IP when the deal ends. Another important point is the right to updates or revised course materials, and whether these updates are included or require an additional licensing fee. You'll also want the rights to monitor how the licensee is using the course materials and make sure they are abiding by the terms of the agreement.

Keep in mind that licensing your training course IP is not a "one time sale" - it's a long term partnership. Your licensee's business is constantly evolving. They will need new or updated courses to meet their changing business needs, and that creates more licensing opportunities for your training course IP.

  

 

Innovation and intellectual property are drivers of wealth creation.  Licensing is the tool that brings together the idea people who create the intellectual properties with the entrepreneurs who have the expertise, capabilities and resources to unlock the money making power of the IP.     

 

During this webinar, you will learn about developing a licensing mindset, how to think about your IP in terms of leveraging its' money making power, and what types of wealth creating opportunities can be created through licensing.

• Licensing Spells Opportunity
• Licensing Takes Action
• Licensing Creates Teams of Professionals
• Licensing Attracts Resources
• Licensing Leverages Income
• Licensing is Lucrative
• Licensing is Global

 Click  here to view the webinar. 

Free Special Report: Licensing Trade Secrets 
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This Month in IP History

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Ask Rand Brenner 

   

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