If you don’t use it, you lose it. When it comes to intellectual property, its value is lost if it’s not commercialized. IP loses value in several ways. Patents lose value as the get closer to the end of their protection. Trademarks lose value if someone uses it without your permission. And all IP loses value as the technology, products, and brands based on it get old.
IP in and of itself isn’t valuable. It must be transformed into tangible products and services to make it valuable in the marketplace. It requires looking at your intellectual property in different ways and finding new applications that create value.
Value is what licensing partners are looking for. IP that does something better, in a different way, at a lower cost, and/or more effectively. No matter what kind of intellectual property you own, there are certain actions you must take to create value. It’s more than just obtaining a patent, copyright, or trademark. Without action, the value of your intellectual property remains trapped. It’s value gets “triggered” by your actions in the market.
In the case of licensing, it’s what you are doing to unlock the value by turning it into tangible products, services or technologies.
Big kids entertainment properties are prime examples of how market action triggers value. Some of the biggest kids entertainment brands became licensing juggernaut overnight. The action that triggered it was exposure to the kids audience on television or the big screen. Suddenly it went from an unknown character with little value, to a money-making machine.
Many of the licensees who got on board early paid a lower price, because the value of the property was unknown, and the big risk was whether licensed products would sell at retail. Once these characters became big hits, the value skyrocketed and the price to get a license went from single to double-digit royalty rates, and from thousands to millions of dollars in minimum guarantees.
Remember, the number one key issue for a potential licensing partner is the value of your IP. If it doesn’t work, it’s not valuable. The real value of your IP is the way a licensing partner can use it to increase revenues, cut costs, secure financing or gain a competitive advantage.
Creating value is the secret to attracting licensing partners. Nothing sells a licensing deal faster than proving that your intellectual property generates revenues. Showing that your IP works – solves a problem or meets a need and customers will pay for it – is the goal. The more you can document this, the greater your IP value.
Don’t let your IP lose value. The number one reason most IP never makes money is not doing something with it. Remember, an IP in motion builds value. The more it’s used, the greater its value.
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.