3 Steps to Help You Avoid the Licensing Runaround

September 12, 20160 Comments

You’ve been pitching your IP to a large company who seems interested. You’ve spent months going back and forth in discussions, presentations, and demonstrations. Each time they tell you they’re very interested and will get back to you after speaking with someone else in the company. Months go by and you don’t hear from them. Then when they do contact you, they tell you there’s been a management change, a refocus on global strategy, or everything is on hold pending a merger with another company.

Don’t get caught in the licensing runaround with a potential licensing partner. When you’re pitching or negotiating a deal with a single company, sometimes it can drag on forever with no results. Here’s how you can avoid getting caught in the licensing runaround.

First, develop a licensing plan, with a list of targeted licensees that are potential partners for your licensing deal. Research them and determine if your IP is right for their capabilities. Next do some research to find out who the right contact is at each company. Keep in mind it’s not always a straightforward process. Sometimes it’s a marketing executive, other times it’s someone in charge of R&D or business development. The most important point is to make sure that you are talking to the right person.

Your next step is craft a very concise introduction to the company about your IP and what problem it solves for them. Remember your IP is a solution and you need to focus on that in your first contact with them. Will it increase their revenues? Does it lower their costs? Is it a new breakthrough product that addresses a big need in their marketplace? Is it a breakthrough technology that will revolutionize their industry? Whatever it is, this is what you want to hit them with on your initial communication. The goal is to find out if they’re interested and confirm who to speak with about your IP and licensing.

If You Don’t Know Where You’re Going, How Will You Get There?

Trying to license your IP without a plan of action is like steering a boat without any navigational charts. You start in one direction, don’t get anywhere, then suddenly change course, but never get to where you want to go. You’ll wind up wasting lots of time money and resources doing the wrong things.  Creating a licensing plan doesn’t have to take weeks and months of work. All you need is the right tool to help you quickly organize and get your plan into action. That’s why the Quick Start Licensing Plan is one of the core tools of the Licensing Toolkit. Click here to get The Licensing Toolkit now.

The third step that is to contact several potential licensing partners simultaneously. Many things are happening inside of the companies you’re approaching. And you never know which one is seriously interested until they’re ready to do a deal. While it’s exciting to think a very large company might be your licensing partner for your new invention or product, keep in mind they have many many different product development initiatives going on simultaneously. In some cases, while they really like your IP, for any number of reasons, they aren’t focused and responding to move the deal forward.

One of my client’s experienced this very issue. They invented a new patented process for the hair color industry. They had been pitching and discussing a possible licensing deal with one of the biggest companies in the industry for almost two years. But the company always came back with a reason why nothing was moving forward.

Timing is everything, so it’s important to engage several potential licensing partners simultaneously. By presenting and negotiating with several partners you will always be moving closer to a licensing deal. Now this is not to say that you should be pitting one potential licensing partner against the other – that is not good business. But you can let them know that you are presenting your IP to other companies and the reasons why you think they are a good fit as a licensing partner.

Remember, the best way to avoid getting caught in the licensing runaround with a single company is to keep your IP out there and in play until one of your potential partners makes the decision to commit to your licensing deal.

Your Licensing Partner Will Make or Break Your Licensing Deal

The right partner makes you a lot of money. The wrong one costs you a fortune. The key is making sure you qualify your partner before negotiating your licensing deal. But if you don't ask the right questions, you can wind up with a partner who lacks the right resources and experience to successfully get your IP into the marketplace. That's why the Licensing Qualification Questionnaire is a core tool in The Licensing Toolkit. It includes the four critical areas of information you must know about them so you can decide if they would be the right type of licensing partner. Click here to get The Licensing Toolkit.

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About the Author ()

Rand Brenner is President / CEO of Licensing Consulting Group, an intellectual property management and licensing company specializing in assisting clients in IP Management, Strategic Consulting, Acquisition of Licensing Rights, and Property Representation. Rand has licensed some of the biggest Hollywood blockbusters, including “Batman” and the “Mighty Morphin Power Rangers”, both of which generated billions of dollars in worldwide merchandise sales. He has lead various international licensing programs as both licensee and licensor, and through consulting projects focused on licensing strategy, brand development, sponsorship sales and property representation.

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