Now that you have an innovative product or service, you may be wondering what your options are to monetize it. There are a few things you can do with your product or service.
- You can take your innovation directly to the market;
- You can sell your innovation to someone else;
- You can license your technology or innovation rights to someone else
Similarly, if you have a registered intellectual property (trademark, copyright, patent or industrial design) you may want to license that intellectual property, to create an income stream.
The meaning of Licensing
Licensing your rights means that you retain ownership and control of your innovation while permitting someone else to manufacture, use or distribute the product or service. A license is like a permit or a lease, where someone else can legally do with your innovation, what you have permitted that party to do.
Different types of Licenses
There are different types of licenses. Some of these are:
- Technology Licensing
- Software Licensing
- Trademark Licensing
- Copyright Licensing
- Patent Licensing
- Industrial Design Licensing
- Trade Secret and Confidential Information Licensing
Rights that can be Licensed:
Your license terms can be as specific as you want. You don’t have to grant an all-inclusive license to one party as you can split the different rights for different parties. For example, you can grant the right to company A, to manufacture the technology, and the right to company B, to distribute the technology. You can also grant the same right to different companies, to be used in different territories. For example, you can grant license rights to both companies, A and B to manufacture or distribute the technology in different territories. Similarly, you can license the right to use a technology to various licensees within the same territory.
Reason for Licensing:
There are several reasons why owners license their innovation or intellectual property. Some of these reasons are:
- The owner does not have the finances to manufacture or take it to the market
- The owner wants to distribute the innovation or intellectual property into new territories but does not have the local knowledge or connections
- The owner wants to create a steady income stream without investing a lot of time or money
- The owner wants to partner up with experts without losing ownership of the innovation or intellectual property
Once you decide to license your innovation or intellectual property and you find a suitable licensee, you should contact a lawyer specializing in Intellectual Property Licensing to finalize the license agreement. If you have a limited budget, you can either negotiate primary terms with the licensee before contacting a lawyer, or you can contact a lawyer to get advice on primary terms to be negotiated, before having a discussion with a licensee.
If you want to discuss your options either as a licensee or a licensor, contact us.
This article is for general information purposes only and does not constitute legal advice.