Can You License a Procedure or Process for a Product or Service?

Yes, it’s known as trade secrets and know-how. It includes systems, business processes, formulas, recipes, and other confidential information; anything you’ve created that helps you make a profit and doesn’t want anyone to know how you do it.

This type of IP requires keeping it confidential and not publically disclosing it to maintain its rights. It’s only shared under a non-disclosure and licensing agreement. Trade secrets such as the formula for big soda brands and the algorithms for the big search engine brands are examples of unregistered IPs.

It’s not uncommon to license a patent with a trade secret or know-how process. It oftentimes covers the product’s manufacturing process or formulation. In other cases, it could strictly be just a business process or know-how license, where you’re licensing the know-how, the knowledge, to do, deliver or produce something.

Many large companies, mainly service-based businesses, are filing business process patents. Some examples include UPS and FedEx, which have logistic processes and systems they’ve created, and in some cases, licensing them out to other companies. Manufacturers who make production and delivery systems, such as automotive companies, license it to other companies.

Suppose you’re a professional service provider business that developed a marketing system, real estate, leadership development, or other types of business processes. In that case, you can package it up and license it under know-how licensing agreements.

One of my clients specialized in workplace safety consulting and training. They converted parts of the training services into training courses and manuals. They license these to companies wanting to set up their own internal safety training programs.

If your goal is to increase your professional services revenues and profitability but don’t have the time or resources to do so, then licensing is your ideal strategy. You’ve got options for licensing know-how: some expertise-based businesses license only the use of their information; others allow licensees to use the name, logo, and the methodologies they’ve created in return for a periodic royalty fee.

While there are other options, which one you use depends on your process or know-how IP and how it can be licensed.

Got a question about licensing? Send an email to askRand@licensing4profits.com, and I’ll answer it in a future post.

Rand Brenner Administrator
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses of all sizes use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He’s licensed some of the biggest Hollywood entertainment blockbusters including the Batman Movies (1 and 2), and the number one kid\'s action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges, and startup events. He’s a published writer with articles appearing in several prestigious trade magazines including The Licensing Journal, Intellectual Property Magazine, and License India.
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