Can You Make Money by Licensing Other People’s IP If You Don’t Own Any?

Can You Make Money by Licensing Other People’s Intellectual Property If You Don’t Own Any?

Absolutely! The beauty of intellectual property is that you don’t have to create it yourself. All you need is the know-how to control and market it effectively.

When we talk about licensing rights to an IP, it doesn’t necessarily mean you must use it to manufacture and sell a product. You see, there’s something called a master licensing agreement that can grant you sub-licensing rights. That allows you to relicense the rights to that IP to other companies, who can then produce and sell the associated products or services.

But here’s an intriguing point to consider: With a master license, not only can you resell it, but you can also gain the freedom to use the license however you please. You decide to venture into the food category and specialize in frozen lasagna. With a master license agreement, you can keep the frozen food category to yourself while sub-licensing other categories like canned goods, prepared meals, hot soups, and cold soups. And if you stumble upon a groundbreaking new beverage, you can sub-license both carbonated and non-carbonated drink categories. The possibilities are truly limitless!

In this scenario, you play the dual role of a licensee and a licensor. That means you create and sell your products while reporting your sales to the IP owner. Simultaneously, as you relicense or sub-license the IP, you act as the licensor’s agent and collaborate with other companies to ensure they comply with the requirements.

In essence, this approach allows you to generate licensing revenue from both sides – through your sales and the licensing agreements you enter into. You can collect the fruitful two percent difference by paying a modest five percent royalty on your sales and relishing a seven percent royalty by relicensing.

So there you have it! The exciting world of IP licensing offers immense opportunities for those without intellectual property. You can explore this licensing side and unlock the potential for lucrative partnerships with IP owners and businesses. Remember, the key is to control the IP through a master license agreement with sublicensing rights and use it to create profitable licensing deals for you and the IP owner.

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