Many IP owners are challenged trying to figure out how to make money with their intellectual property. One of the biggest reasons is a lack of understanding what licensing is and how it works. In fact, this is the reason most IP owners never make money with their IP.
The problem is there’s a lot of confusing information about what licensing is, and so a lot of people are believing things about licensing that aren’t correct. In this article, I’ll dispel five of the biggest myths that keep most IP owners from succeeding in licensing their IP.
1. Licensing is a Legal Process
Licensing is often thought of as a legal process. That’s only a small but important part of it. I’ve discussed this point in other articles, and it’s one of the biggest myths about licensing. At its core, licensing is a process of doing activities and tasks that turns your IP into money-making products, services and technologies. The essence of licensing is really a marketing and sales process. In fact, the more you know about marketing, the better you’ll succeed in licensing.
2. Licensing is Complicated
While licensing does require a basic understanding of IP rights and how to license them, the process itself is not complicated (although some licensing agreements are complex). It requires taking action to develop and promote your licensing opportunity. At its most basic level, it involves proving your IP works, and then finding a partner to license it. Of course, there are many steps in between these, but the core activities are not complicated as long as you know what to do and how to do it.
3. Licensing Doesn’t Work for Every Type of IP
One reason most IP never makes money is failure to take action with it. The IP owner, both people and big companies, create it, then do nothing to try to secure a licensing partner. The second reason an IP owner doesn’t make money is they fail to prove their IP in fact will make money. If it doesn’t work or customers don’t want it, the IP won’t make money. It doesn’t matter what type of IP you have – a patent, trademark, copyright, trade secret or know-how – it can be licensed, as long as it’s protected, proven and packaged properly for licensing.
4. Licensing Partners are Hard to Find
Finding the right licensing partner takes time, but there are some shortcuts if you know where to look. It’s not hard but it does take time. I’ve worked licensing campaigns where it only took a couple of months to find a partner, it other cases it’s taken a year. Keep in mind there are thousands of companies all looking for innovative products, services and technologies. It requires a fair amount of research to find the right one. It all depends on the IP and the market. Most important, it requires matching your IP with a partner who needs your IP – does it fit their business and do they have the capabilities to successfully get it into the market. The better your IP fits a business, the more likely they’ll want to license it.
5. Licensing Requires an Experienced Professional
While there are many types of licensing professionals, such as agents, attorneys and consultants, licensing doesn’t need you to hire one (although some parts of licensing, such as creating and reviewing the licensing agreement, do require working with an IP attorney). But just like learning marketing, accounting or web design, there are certain skills you can learn to succeed in licensing. There is also a language of licensing that’s used in negotiating deals and creating contracts. Similar to real estate, it includes the landlord (licensor) and renter (licensee), the property (IP) and the rent (royalty). Once you master these basic licensing skills, you don’t have to be a professional to create money-making licensing deals with just about any type of IP.
While these are some of the biggest myths in licensing, they aren’t the only ones that hold back many IP owners. The important thing to take away is that licensing is a money-making process that requires taking action with your IP. Learning the basic licensing skill set doesn’t require lots of time, but it does require learning from a credible source.
The problem is the skills for making money with your intellectual property are not taught in any school or university. That’s why I’m offering a special deal on one of my newest and most comprehensive licensing training programs: Unlimited Wealth: The Ultimate Guide to Creating Big Money Licensing Deals. I’ve never released it before, and this special deal is only being offered to my newsletter subscribers. Click here to find out all the details about what’s inside this licensing training program.
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