Developing and making money with your IP doesn’t mean you have to go it alone. Licensing gets you the resources you need without the added cost through a joint venture. Some examples of how to use JV’s include joint development of a new patented product from scratch, or to commercialize an IP that is acquired by a license agreement.
Both large and small companies can use JV licensing agreements. For smaller companies, a JV strategy is a good option to leverage each other’s resources, such as manufacturing capabilities or distribution channels. If development capital is needed, a smaller company could form a JV with a larger company, and give them rights to future revenues, or to use the IP in different markets.
In the case of large companies, the partnering strategy focuses on co-marketing or cross–promoting each other’s brands (or products). The goal of this partnering strategy is to acquire more customers or gain certain efficiencies, such as promotional costs. Examples include major airline alliances honoring each other’s frequent flier programs, or fast food chains promoting the latest kids movie and offering a free toy with a kid’s meal purchase.
When considering a joint venture, give careful thought to the type of partner you are looking for and what resources each of you will contribute. In a joint development JV, IP ownership must be clearly defined. For example, if both partners include IP, then the agreement should specify that each partner retains ownership of their preexisting intellectual property. If the IP is developed jointly, then its important to specify how the IP will be allocated to each partner. When commercializing an acquired IP, be sure to detail how the profits and costs for production, sales and distribution are divided.
JV licensing is a flexible strategy that is used in many ways. It can be tailored to your specific needs, whether it’s developing a new technology (R&D), acquiring rights to an IP, sharing or combining complementary IP, or expanding your business into foreign markets.
Free e-Course: 7 Ways to Build Your Business with Licensing
Getting rights to an IP is a fast start strategy to expand your business. Key reasons to license in IP include developing new products (services), improving your technology, or getting access to new markets. During this e-course, you’ll learn about 7 ways you can use licensing to launch new products, create revenues, get financing, start a new business, stand out from the competition and much more.
Click here to sign up for this free e-course.
Rand Brenner is President / CEO of Licensing Consulting Group, an intellectual property management and licensing company specializing in assisting clients in IP Management, Strategic Consulting, Acquisition of Licensing Rights, and Property Representation. 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. He has lead various international licensing programs as both licensee and licensor, and through consulting projects focused on licensing strategy, brand development, sponsorship sales and property representation.