In this era of digital disruption, where established companies fight aggressively to stay in business by introducing innovative new products and services, it is more important than ever to understand how and when to use intellectual property licensing.
Intellectual property (IP) licensing is the practice of using intellectual property from another company or product to create a new product or product that uses that IP. It can be very lucrative for some, but also can be very costly for others.
For example, someone who develops a fashion line might rent money-losing licenses from major companies like Burberry and Amazon Prime Video so they can start selling their clothes. Or, if he or she does not get any traction with the initial sales process, then they can apply for a patent on the fashion line!
This article will discuss some tips on how to use IP licensing effectively and cost-effectively, if you are looking to enter the market as a licensee or investor.
Example of intellectual property
A good example of an invention that is worth protecting is the concept of touch-screen technology. This has been proven to work for applications such as electronic payment systems.
When a person applies new technology to a previous application, it can bring something new to the market. For example, companies introduced touch-screen payment systems in convenience stores and large grocery stores where you would need to buy items together.
These companies were able to raise enough capital to develop their product and launch it. Since then, many have added new features or implemented security measures so users do not use it without putting some personal information in place.
This type of licensing can be beneficial if it protects the idea from other people trying to use it before you do. It also helps gauge whether or not someone will be successful in getting their product out into the market through normal channels.
Why use an intellectual property license?
There are four main types of licenses: equity, revenue, royalties, and sublicensing. Each has their own benefits and restrictions.
Equity licenses give the holder the right to use an idea or concept, but not to make money off of it. The holder can offer support or help with promoting their product or service, but cannot require anyone to purchase or use their product or service.
For example, you create a fitness tracker that you offer as a gift, and your company does not want to make a product sale-related, then your gift type fitness tracker would have no sales requirements.
The opposite of an equity license is a revenue extension. When someone accepts your gift at the close of business, they receive something from you for free.
Who can I license my IP to?
Though it’s increasingly common to be able to use someone else’s work as your own, there are some situations where licensing your work is appropriate.
Many times when you purchase a product, it includes a free download version that you can use for your own purposes. Likewise, when you sell your design or intellectual property, you can also distribute the product without the copyright holder’s permission.
To get around this, you must seek out an intellectual property licensing company. These companies take care of collecting royalties and distributing the product to whom they wish. They also handle any marketing aspects of the license application and distribution process.
For most people, going through an intellectual property licensing company is as follows: contact them about applying for a trademark or copyright; they take care of collecting royalties and distributing the product to whom they wish; and they handle any marketing aspects of the license application and distribution process.
What are the different types of licenses?
There are several types of licenses, each with its own features and limitations. As the table below shows, they include everything from paid to unpaid.
Unpaid licenses allow you to use a product or service, but the owner does not make any money from it. For example, you download a file and it runs on your computer, but you do not pay for it because it is free software.
Paid licenses allow you to use a product or service, but the company may charge you at some point. For example, you download a file that runs on your computer, but they charge you because it is a software package that they sell.
Many people do not understand what each type of license has features for and what limitations can be played with.
What should I consider when licensing my IP?
When it comes to licensing your intellectual property, there are a few key areas to consider. These may seem like small things, but they can make a big difference in whether or not you can charge a marketable fee for your product or service.
Many times, the cost of licensing your intellectual property is matched or even exceeded by those who have less expensive licensed IP. You can save yourself a lot of time and money by working with someone who has more costly licensed IP!
It is important to note that having too much “intellectual property” can be harmful. Having too many rights to protect can create legal headaches for yourself and your clients.
Some ideas to keep in mind when looking into license an IP dish: do you have identical or similar domains (i.e. www.mywebsiteisintellectualproperty). Does the IP being licensed have high circulation (i.e.
Who is the licensee?
When a company licenses an intellectual property asset such as a trademark, copyright, or patent, they are granted rights to use that property for commercial purposes.
This means that the company is no longer the sole owner of the asset and can charge someone for using it. For example, The Gap has purchased trademark rights to the word Gap to put on their clothing, but you can legally purchase Gap clothing without the Gap trademark being on it.
Theoretically, someone who uses the asset in a non-commercial way cannot legally hurt you because they do not have rights to them. However, if you were to get sued as a result of someone else using your product or service without your permission, then the company could potentially be held responsible.
Do I need a contract?
Most times no, but it is okay to have one if you do. A contract can be a way to set down how the parties in the deal agree on something and how it is valued and what it must be done to keep the agreement.
Without a contract, there is no way for the parties involved to know if they are agreeing on something that is valuable or not. It is also important to understand what a contract does and does not include.
The most common kinds of intellectual property licensing agreements are between an entity that designs things and uses products or services such as corporations or individuals who offer services. When the individual or corporation offers their product or service, they typically receives a license to use its intellectual property for whatever purpose Congress determines it should be used.
This type of agreement can be very easy to fall into trouble with because one party may take advantage of the other by using their product or service without permission. When this happens, both parties get what they want, but not at the cost of the other.
What should be included in the contract?
Contracts can be hard to understand, and when it comes to intellectual property, the key elements that are included can be confusing.
When it comes to contract interpretation, there are some elements that are considered clear and restated in every contract. These include expectations around payment, indemnification, and confidentiality.
It is very important that these aspects of the contract are clearly defined and included as part of the licensing agreement. As an artist or intellectual property owner, you should take into account whether or not you have to include these elements in the agreement or if they must be included by law.
As an artist or intellectual property owner, you should take into account whether or not you have to include these elements in the agreement or if they must be included by law.