Licensing intellectual property (IP) is one of the fastest ways to reach the commercial market. It’s considerably faster than starting and building a new business which typically takes about 18 months to 2 years. Licensing an intellectual property can be done in a much shorter time frame, often just a few months instead of years. Licensing offers a quick and powerful method for tapping into a partner who is already operating a business producing and selling goods or services into one or more markets. Whether it is electronics, toys, T-shirts, or hats, there are companies already in the market and you can “plug into” these partners through licensing.
Licensing can be viewed as a two-way street. The owner of the IP would license out and reach the market very rapidly, while a business would use licensing to find commercial-ready products, services and technology, something that is ready to go to market.
Licensing commercial ready intellectual property is a low cost high return way to launch a new product, service or technology. Tapping into the” R&D expertise” of an IP inventor is often a lower cost way to develop new products. There are several advantages to licensing a commercial ready intellectual property. These include completed R&D, product testing, and test marketing at some level (such as sales to customers either direct or through retail channels). There are many sources of market ready IP. Some of these include licensing agents, licensing databases (such as www.yet2.com), patent databases (such as www.USPTO.gov), corporations and universities.
Some the best licensing opportunities are the established brands looking to expand their presence in the market. Brand licensing can be a great strategy to launch a new product. This is the strategy I used for a client who invented a portable fitness product. By locating a well known brand just starting their licensing program, we opened the door to a great distribution opportunity. Another benefit of licensing a well known brand is that it provides instant consumer awareness. It also provides access to retail. One of my clients was a new toy company from Australia who wanted to enter the US toy market. Trying to build a new toy brand in the US is a very expensive proposition. Instead, we licensed several well known kids TV shows that had big licensing programs with lots of licensed products at retail. These brands gave the company immediate access to those retailers. By using this strategy, the toy company was able to get into the US market much faster and at a fraction of the cost of building their own brand.
The internet is creating new licensing opportunities. Social media, virtual worlds, and digital content are just some of the rapidly growing IP opportunities. These IP’s have also created new product formats and distribution channels. Many of the biggest kid’s social media sites, such as Club Penguin, are leveraging their content into real world product categories. Virtual worlds have created virtual products, which are sold online. Licensing of photographs and other published content has also exploded with the development of content provider and e-commerce websites. New markets and demands are popping up every day. Licensing takes advantage of this environment, providing a fast way to enter the marketplace and take advantage of these money-making opportunities.