The number one goal of intellectual property is to transform it into money – making products and services. But if you don’t map out a strategy and plan of how to get there, your odds of succeeding are low.
Just like a business or marketing strategy, your licensing strategy is what you want to do and your plan is how you will do it. Trying to license your IP without a plan of action is like steering a boat without any navigational charts. You start in one direction, don’t get anywhere, then suddenly change course, but never get to where you want to go.
In one case, I met an inventor who created a new zipper technology. He tried licensing it to companies he thought would be interested in using it on their products. But he wasn’t successful because all he was doing was throwing his IP against the “licensing wall” hoping something would stick. He spent years doing the same thing over and over only to wind up back where he started – a great IP with no money and resources to get it into the market.
So here are five simple steps to creating a winning licensing strategy.
Step one is figuring out your licensing options – the different ways you can license your IP. Will you license non-exclusively to many partners, or exclusively to one partner? If non-exclusively, will it be by territory, distribution channel and different uses of it? Know how you’ll license your IP before you approach any licensing partner.
Step two is identifying who the right partners are, whether your IP is right for their business, and the value your IP offers their customers. For example, an app that automatically keeps track of new car maintenance schedules is valuable to auto dealers looking for ways to stay connected to their customers and keep them coming back for regular services.
Once you’ve identified which companies are best suited, step three is listing what actions you must take to license it to one of them. For example, you decide to license your new toy invention in the US to one of the larger toy companies. You’ll detail all the different ways to reach out to these companies, such as emails, trade show appointments or going to industry seminars.
The fourth step is determining the best way to show your IP to potential licensees. You’ve got several options including brochures, product samples, demonstration videos and power point presentations. Start with a simple, concise one sheet IP profile and build from there. A good profile provides all the key details about your intellectual property and the licensing opportunity. The key word is concise. It is an introduction to potential licensees, and they won’t take the time to read the entire history of your IP.
And finally, always keep in mind you’re negotiating a long-term agreement. Successful negotiation is all about preparation. Before starting your negotiations, you must know what you want and what you’re willing to give on (such as rights to product improvements). If you’re not ready, you wind up accepting terms that you later regret agreeing to simply because you weren’t ready to discuss them.
Creating a licensing strategy starts the licensing process. It’s a roadmap that guides you in taking action. Success in licensing requires focused and consistent activity, otherwise, you’ll wind up drifting around. Remember, it’s not how good your IP is…it’s how good your ACTION with your IP is.
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses of all sizes use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He’s licensed some of the biggest Hollywood entertainment blockbusters including the Batman Movies (1 and 2), and the number one kid’s action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges and startup events. He’s a published writer with articles appearing in several prestigious trade magazine including The Licensing Journal, Intellectual Property Magazine, and License India. Rand also mentors at the Cal State Fullerton School of Business and Economics and is a judge for their startup business plan competitions.