The 5 Biggest Licensing Mistakes You Can Easily Avoid

October 13, 20170 Comments

Licensing is process. It requires doing certain activities and tasks to protect, manage and turn your intellectual property into a money-making licensing deal. But trying to take shortcuts in the process leads to making some big mistakes that cost you time, money and in some cases, a lot of legal headaches.

If you’re new to the licensing game, or actively trying to find a licensing partner, there are ways to avoid some of the biggest mistakes. One of those is learning what they are. If you’re aware, you can take actions to avoid or fix them.

Here are 5 of the most common mistakes and what you can do to prevent these from happening to you.

Fearing that someone will steal your IP is  mistake number one. Especially if you’ve got an IP that a big company is interested in licensing. Many IP owners fail to take action because of a fear of the unknown. Fear is created from not understanding how the licensing process works. The result is missing big opportunities to make money with their IP.

I met an inventor who created a new accessory for the automotive industry, specifically trucks. He had several companies interested in licensing, but because he was locked in a “fear” mode, he failed to take any action with these companies. Eventually these potential licensees lost interest and some big money-making opportunities slipped away.

Mistake number two is taking shortcuts. Successfully bringing your IP to market is something that requires persistence and patience. If you take a short cut and try to “rush ahead”, you can wind up making the same mistakes as others before you. Because you don’t know your licensing options, you end up pursuing the wrong approach that costs you a lot of time and money.

Not following the right disclosure process when presenting your IP is the third mistake. Any information your give at the first stage of discussions must be non-confidential. If not, you risk losing control of your IP if they copy it after you showed it to them. Some industries are notorious for this. You can avoid this with a concise one sheet summary about the IP (don’t include any confidential information) and why it’s valuable to them. It’s easy for them to read and figure out if it’s something they’re interested in discussing further.

Mistake number four is not doing due diligence on your potential licensing partner. After you’ve signed the deal, you discover they’ve spread themselves too thin. They’re missing production deadlines, unable to deliver products and fail to enter all the markets in their agreement. Now your stuck trying to get your rights back. Spending a little time doing some research about your potential partner will save you lots of time and headaches down the road.

And number five is not getting legal advice before signing a licensing agreement. Ending up in a reactive deal because an opportunity presented itself may seem like a good idea at the time. But don’t assume that a licensing agreement will take care of any problems that “pop-up”. Nothing is more draining in both time and money then having to litigate your way out of a licensing agreement.

Remember, licensing is a process to create a partnership between you, the IP owner, and a company with the resources to turn your IP into money-making products, services or technologies.

The best way to avoid these and other mistakes is to sign up for our free Licensing4Profits newsletter. It’s one of the best ways of learning how to do licensing the right way. Just like getting advice from a legal, financial or marketing expert, it gives you the information, insight and knowledge you need to successfully license your IP. Plus you’ll also get exclusive access to “subscriber only” e-courses, webinars and licensing training programs.

Getting the right advice helps you avoid the mistakes and teaches you how to effectively maneuver all of your licensing activities.

Sign up today for the free newsletter and learn how to avoid the biggest licensing mistakes.

 

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About the Author ()

Rand 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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