You are in the knowledge management business. No matter whether you make and sell products, services or technology, your core business is managing the intellectual assets used in creating, marketing and selling your products, services or technologies.
In the 21st century, the most successful companies are those effectively managing their knowledge in the form of IP assets. But the problem is whether your business is still being managed in the old make and sell mentality. It looks at IP as a “cost” and not as an investment in an income producing asset.
Your business is either creating or renting IP, or in many cases both. You’re creating it through your own R&D, or renting it from someone else through licensing. How you use and apply your IP is what sets your business apart from the competition.
Failing to manage it pro-actively costs you potential revenue opportunities. It sits on your shelf until one day you happen to get a phone call from someone who saw your patent and called you about licensing it? But without an IP strategy, you don’t know whether this licensing opportunity will help or hinder your company.
Actively managing your IP assets requires creating an IP plan and strategy that’s part of your long and short-term business goals. It identifies different ways to leverage your IP assets into new markets, applications and revenue opportunities.
Some of the biggest and most successful companies are generating tens of millions of dollars with this strategy. IBM, Apple, Microsoft, HP and just some of the companies generating hundreds of millions of dollars licensing out their technologies, patents and trademarks.
It requires finding possible out-licensing opportunities for unused or under-used parts of your IP. You may have several patents you’re not using, or a trademark that fits other product categories. Investing a little time can unearth some valuable licensing opportunities that turn into tremendous income sources.
You can license out your IP to non-competitive products or industries without cannibalizing your core customers or markets. Generating recurring revenue from licensing agreements significantly increases the value of your IP and your business. Royalties increase your bottom line profit at a lower tax rate. You can tap new markets or product categories without the cost risk.
Licensees help build your competitive advantage be increasing your market share and help fight potential infringer’s. It increases your visibility and stature with suppliers, vendors and customers. And it leverages the value of your IP making it and your business more attractive to investors.
To make the most of your IP assets requires stepping out side the “make and sell” mentality. Don’t look at them as just a legal investment to protect your product, service or technology. They’re a valuable asset that must be managed as part of your short and long-term business strategy. In an economy that increasingly values intangible assets, licensing your IP is one of the fastest ways to expand your business. It’s a flexible growth strategy you can tailor to your company’s goals, whether it’s accessing bigger markets, tapping into partner resources or shifting into a new business model.
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.