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Welcome to the October issue of Licensing4Profits. Patents have a limited "legal" life of only 20 years, but often the technology or product itself can have a much longer "economic" life and continue to generate revenues beyond the patent life. In this months featured article, How to Extend the Life of Your Patent Licensing Agreement, you'll learn two strategies you can use to keep getting paid even after your patent expires. The use of a patent in the commercial marketplace is what transforms its value into a money generating asset. In our newest special report, Licensing Patents: Transforming Innovation into Income you'll learn why licensing is one of the fastest and best ways to turn your patent into money-making products, services or technologies. Sometimes your licensing partner can improve your IP to make it better. In this month's Key Terms and Conditions: Grant- Back, you'll find out about 3 ways of using the grant-back clause to make sure you don't lose out on a valuable improvement to your IP. Find out what the tooth paste tube, a popular kids fairy tale, and a frozen potato nugget have in common in This Month in IP History. We conclude with this month's question "What are some good sources to use to find information about patents?" Enjoy! 
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How to Extend the Life of Your Patent Licensing Agreement
A toy inventor licensed his patented toy to a major comic book company for $1 million and 3% royalties. After the patent expired, the company refused to pay any more royalties. Because he only licensed rights to the patent, once it expired, the licensing agreement also expired.
Patents unlike other types of intellectual property, such as trademarks, copyrights and trade secrets, have a limited "legal" life of only 20 years. However the technology or product itself can have a much longer "economic" life and continue to generate revenues beyond the patent life. So how can you license a patent with a limited lifespan and continue to receive royalties for as long as it generates revenues? One of the best ways to extend the life of your license agreement is to combine your patent with other types of IP, such as a trademark or trade secret. Both of these have an infinite lifespan. In the case of a trademark, its value increases through time and becomes a recognized part of the patent or technology. Even after your patent rights expire, you can still receive royalties if the licensee continues to use your trademark. An example is "Intel Inside" who uses this strategy to extend the life of its chip technology patents across the computer industry.
Protecting and licensing patents with trade secrets is a strategy that's frequently used in a number of industries including medical device, biotechnology, and pharmaceutical. In these industries, trade secrets, such as manufacturing know-how, are critical to successfully commercializing the patent. It can save the licensee significant time, money and resources, and increase the value of the license.
The key is to be very specific in the licensing agreement regarding the payment of royalties. Make sure it's clear the royalties will continue to be paid on the use of the other types of intellectual property even after the patent expires. Most importantly, make sure your licensing agreement is prepared by a qualified IP attorney. Bundling your patent with a trademark or trade secret is tricky, especially if your non-patent rights are a big part of the IP value. Before starting your licensing program, take an inventory of your patent assets. Remember your patent is more than just a product or technology. It includes trademarks, trade secrets, know-how, or business processes. These are often the most valuable parts of your patent. They can extend the life of your license agreement, and can be the difference between a lost income opportunity or a lifetime of royalties.
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Feel free to pass this newsletter along to friends and associates. You can visit our websites ( www.licensing4profits.com and www.licensingcg.com) to view our blog, special reports, published articles, webinars and audio presentations.
If you are interested in learning about our consulting services, please contact us at (646) 395-9572 or email info@licensingcg.com.
 Best regards,
Rand Brenner
President & CEO
Licensing Consulting Group
Licensing4Profits
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 includes executive positions at Saban Entertainment and Warner Bros Consumer Products where he developed numerous licensing and promotional deals with Fortune 1000 companies.
LCG advises clients on the strategic use of IP assets to build business value, increase revenues, lower costs and capitalize on new market opportunities. Our consulting services are designed for small and mid-size businesses, enabling them to benefit from top end IP licensing services typically afforded by large companies.
About Licensing4Profits
Licensing4Profits is the only online resource providing coaching, teaching and training on how to manage and make money with intellectual property. We offer audio workshops, seminars, videos, e-courses, blog articles and webinars. Our goal is to advise, guide and help you master the licensing skills to transform your intellectual property into money-making products, services and technologies.
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Free Special Report - Licensing Patents: Transforming Innovation into Income
Registering a patent is no guarantee of its market success. If you don't do something with it, nothing will happen.
This special report discusses why licensing is one of the best ways to make money with patents.
Click here to get this report.
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Key Terms & Conditions: Grant-Back
What happens if your licensing partner improves your IP and creates a better product or technology?
In this case, it's important to include a grant-back provision in your licensing agreement. It gives you rights to use and license the improvement.
There are several ways of using the grant- back clause. One option automatically gives you the rights (assignment) to any new improvement. The second gives you exclusive rights to use and re-license the improvement. The third, and most common option, gives you a non-exclusive right to use it. Don't overlook the grant - back clause, especially if your IP requires further development before going to market. If you do, you can wind up losing rights to valuable improvements to your intellectual property. 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
1841 A patent for a collapsible tube for use with such items as toothpaste was granted to John Rand.
1928 The novel "Peter Pan" by James Barrie was copyright registered.
1958 "Tater Tots" was trademark registered.
Source: About.com |
Ask Rand Brenner
Q: What are some good resources to use for finding information about patents?
A: Patents are public documents, and most IP offices worldwide offer on-line patent databases, generally free of charge. In addition, a number of private service providers offer patent search databases for a fee.
There are also many on-line private intellectual property databases including Google Patent Search , Delphion, and IP Exchanges such as Yet2, IP brokers, auctions and hundreds of non - government organizations and directories.
You can also use third parties, such as patent agents and attorneys. They are trained in searching patent documents and can be worth the cost, especially if you're researching a very competitive market where there's a lot of overlap in patent claims.
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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