How to monetize your intellectual property?May 30, 2022 By Dinesh Parmar
There are many ways in which revenues can be generated. Modern businesses Monetizing Intellectual Property and earning from it is one of the ways. Actually, not one but many of many ways because modern businesses have created more pathways to earn fair amounts of new revenue. Another smart term for this is ‘Asset Monetization’.
Asset Monetization is the process of converting tangible and intangible assets into sources of generating revenue. One method of doing this is selling products based on a unique patented technology. Another method is licensing the patented technology to different parties and creating newer sources of income. Similarly, there are multiple strategies that can help you monetize your intellectual properties. Like –
Trademark - You can license your trademark to companies to use your logo for an advertisement or campaigns
Copyrights – Artists and music companies giving publication rights to use their music or songs.
Design – To print a mickey mouse character on any stationary, the manufacturer needs to license the rights from Walt Disney Co.
But, what before it?
Hire an IP Lawyer
Before you dive into the process of monetizing your IP, hire an experienced IP lawyer who can guide you through the legal process of it. An IP Lawyer can help in proper IP valuation so you can get maximum advantage and don’t be at loss.
Build an IP Portfolio
Building an IP Portfolio is very important to manage all the Intellectual Properties, and especially when you are thinking of leveraging them for revenue. Everything - like patents, trademarks, copyrights, branding elements and unique business approaches must be listed in the portfolio for better protection and valuation purposes.
Understand your IP’s value
After making and before monetizing the portfolio, it is crucial to understand the value of your Intellectual Assets. Are you undervaluing or exaggerating the value of your Intellectual properties? An Intellectual Property Law firm can help you avoid such errors.
Strategies for IP Monetization
The most common yet important strategy is to turn your IP into a moneymaker by creating new products using the patented IP and selling them in an opportunity market. Useful Products with patented technology are a lucrative revenue opportunity for IP owners.
Selling IP Portfolio
Kodak sold its digital imaging patent portfolio for $ 525 million to Apple, Google and Facebook. AOL sold 800 patents to Microsoft in 2012 for $1.1 billion. When you have a strong Intellectual Property portfolio and you have done some work in valuing your IPs calculatedly, it can help you generate a whopping revenue stream.
Licensing your IP
Being the owner of your intellectual property, you have the right to sell the rights of your IP to another licensee. By doing this, you can give the right to use your IP to the licensee, and he is authorized to use your IP in the way he wants or needs and in return, you earn royalty from them. Patents, Trademarks, Design and Copyrights are the types of intellectual properties that can be licensed.
In-licensing someone else’s IP
When you give rights to your IP to someone else, it is called out-licensing, and when you license a third party’s IP for your use, it is called in-licensing. In-licensing is a method in which you can gain a license to another's IP and turn it into a commercial product to earn money. You can find out a patent from a different industry and apply for user license or license copyrights to get an advantage in your industry or market.
- Toy companies sign licensing agreements with movie studios to manufacture and sell action figures.
- Domino’s Pizza Franchises have a licensing agreement with Jubilant FoodWorks Limited for using the company's branding and marketing materials. Jubilant FoodWorks Limited holds the master franchise in India from Domino's Pizza, Inc.
- Netflix enters into a licensing agreement with entertainment companies or content owners for allowing it to include the shows or movies on their platform for a certain period of time.
A Patent Pool is an agreement between two or more patent owners to license their patents to one another or a third party. Patent Pools mean cross-licensing patents related to a particular technology, especially complex technologies that require correlative patents to make a more efficient product. Getting involved in a patent pool can lead to profitable innovations and help in a competitive market. Sharing IPs can reduce costs, and in addition when pooled patents are licensed to the non-members, the members can earn a considerable amount of licensing fees.
Moving your IP
When your current company does not have much scope to take advantage of an existing IP and bring it to its full potential, move the IP to a new company. A new company can attract fresh investment from new investors. Moving an IP to a new company may not be a primary but not less important way of making revenue from it.
Using IP as a collateral
A good intellectual property is always esteemed for its value and is admired by investors. An IP can be used as collateral like any other asset for security purposes. For such purposes, it is always a smart move to hire an IP lawyer who can help you draw a legal contract.
State Bank of India advanced a loan of Rs. 2000 crore keeping the Kingfisher brand as collateral. This deal included nine trademarks from Kingfisher. Dell leveraged its patents as collateral for a $ 16 billion cross-licensing deal with IBM.
Intellectual Properties can be innovative, and so can be the strategies that can empower you to monetize these IPs. The ways of monetizing can always be newer. An IPR Law Firm that has been in the business knows how the contracts work. Parker and Parker’s IP services are trusted by many businesses and innovators for their end-to-end services. Get in touch with us for expert guidance.