Licensing Intellectual Property

Licensing Intellectual Property is a growth strategy for your business. In your business, you are continually seeking to improve your bottom line. Earnings are king, and you focus on your existing business and look at how you can grow.

  • By marketing to secure higher market share,
  • increasing your profit margin through having a desirable brand
  • reduction of costs

These are typically the forms of the growth model. Another way is to look at new business by bringing in new types of revenue strengths. So how can you seek to do that with your intellectual property? Well, you can look at your existing business and use your brand to expand its worth. You can also look at your intellectual property and seek to license it to others. Leverage off their use of your intellectual property to grow your business. Leveraging can increase your revenue without incurring extra costs. What am I talking about in this context is the commercialization of your IP.

Leasing a legally protected property to another you become the licensor. The person to whom you lease or license the right to is the licensee. There are terms, conditions and payments that you are to receive.

Cost Effective Branding

Licensing intellectual property is a cost-efficient brand extension. It will increase customer awareness of your primary brand. This allows you to increase your revenue by other people using your IP. There are legal and marketing issues to consider. There’s the way you package your commercial IP that you are offering

  • Art,
  • Celebrities,
  • Corporate trademarks,
  • Entertainment
  • Character merchandising
  • Fashion
  • music
  • Nonprofit
  • Publishing
  • Sports
  • Technology
  • Toys
  • Computer games.

When Licensing Intellectual Property Began

Peter Rabbit the first toy to be used as licensing of intellectual property

Licensing intellectual property can go back to 1903. One of the first examples is the licensing of Peter Rabbit created by Beatrix Potter as a toy. There were Charlie Chaplin dolls in 1910. Mickey mouse stationary was first licensed in 1928. Mickey Mouse comic strips and films grew from the 1940s. We’ve now seen the expansion of the Marvel world and DC comics franchises. From comics into movies and then of course all the ancillary licensing. Pyjamas as registered designs. Games through computers, storyboards, and toys. There’s the licensing of

  • Pierre Cardin
  • Givenchy
  • Valentino and
  • Louis Vuitton

through the 50s. Fred Flinstone and other TV commercials in the 60s. And then we, of course, we have football, soccer, and The Beatles in the 1960s.

One of the great successes was Star Wars. In 1977, when it was first released, the licensing rights in itself, earnt US$2.5 billion. Licensing has snowballed. It is an exceedingly good way of leveraging your IP through

  • franchising
  • joint ventures
  • strategic alliances.

How Does Licensing Intellectual Property Work

Disney stores in 2010, earnt 1 billion in sales through the real estate inventory. Disney’s revenue from licensing its products

  • Mickey Mouse
  • Minnie Mouse
  • Star Wars etc

earned US$20 billion in sales. So as you can see, there’s a great leverage uplift from using and licensing IP.

Harley Davidson Belt Buckle licensing of intellectual property

Harley Davidson licenses intellectual property. Coca-Cola does it. Harley Davidson sells motorcycles. Yet, they have a clothing range – belts, ties, braces, shoes and leather goods. It’s very important to consider if your business is suitable for IP licensing.

Licensing Considerations

But if you’re going to look at licensing intellectual property, you need to take the time to make sure that you own the IP first. That you’ve protected your IP fully. To ensure that you can exploit it. There would be nothing worse than creating a fabulous idea, spending time, blood, sweat, and tears on only to find that other people go off and run with it. To confirm what IP you have in your business. Undertake an IP audit so that you know what you’ve got. Many business people have ideas which they’ve reduced to writing and copyright. But, they don’t keep that information confidential. Thereby allowing their employees to potentially run off with it. So having this audit is good for you

Work out who your customers are. Understand what your customers perceive as your trademark. Is there any particular brand of recognition through

  • sight
  • shape
  • sound
  • smell or

any combination of those that need protecting. Why do customers love your goods or services? Is there some registered design, some patent that you need protecting? How can you better improve the protection of that intellectual property? First, find out what your IP is. Then you can then move to the next step of determining how you can package your IP to leverage it moving forward. What form of licensing contract or legal document do you need to proceed with leveraging?

Consider the branding positioning that you have. What’s the purpose of the brand that you’re trying to use? What information do consumers need? Identify the elements of your brand

  • symbols
  • colours
  • graphics.

Is there any particular trade dress that you need to have? Are there packaging guidelines and retail presentation? Are there advertising and media regulations? Elle has a merchandising brand manual. It’s important that if you license Elle merchandise that you adhere to that brand manual. There are brand manuals from, of course, Disney and many other organizations.

Benefits of Licensing Intellectual Property

The benefits of licensing are that you might be able to export your ideas overseas without any costs. Someone can come to you and say, what a fabulous idea this is – “Can I use it?” and the answer is, of course, you can, provided you pay me. You can work out an appropriate licensing arrangement. You can grow your business, build your revenue by someone else, spending the time and money to use it overseas. You can do this through partnerships, joint ventures, or straight out licensing. There marketing will allow you to have higher perceptions throughout the world. Which will, of course, allow you to license the Mark in other countries and other parts of the world.

Intellectual Property Reference Pack

Smart Thinking Parramatta – learn about Confidential Information and Trade Secrets from Steven Brown.