Innovation Asset Blog

How to Tell if You Should License Intellectual Property

Licensing intellectual property assets can be a powerful opportunity for both licensees and licensors to maximize their portfolios. For organizations with mature and dynamic intellectual property portfolios, becoming a licensor creates additional revenue streams. For growing organizations, licensing intellectual property from others allows fast product launch.

For licensees, “renting” intellectual property assets fromIP-licensing.jpg others can be a strategic as well as tactically superior play in a number of situations. For example, growing organizations that need to competitively move quickly can dramatically decrease time to market. Similarly, licensed intellectual property assets are a lower risk way for growing and even mature organizations to test into new industries and markets, and to solve new problems faster by minimizing costs and resource usage associated with research and development.

For licensors with robust intellectual property portfolios, licensing activities diversify revenues, increase shareholder value, and can be readily identified by evaluating strategic direction and existing IP data.

But what are some of the clues organizations can use to make licensing decisions?

IP Performance Data

Analysis of intellectual property performance metrics and administration costs can uncover which assets are optimal for licensing. For example, patents that are unused or underperforming could be costing your organization money instead of creating additional revenue. These assets could be used more effectively in other markets.

Product Strategy Fit

Many innovative organizations can run into situations in which intellectual property created does not fully match the strategic product direction. Similarly, as product direction evolves over time, existing intellectual property assets may no longer be a fit. In these instances, legal costs associated with intellectual property management and maintenance can lead to a low return on investment if not a loss. Creating a licensing agreement with an organization committed to the asset’s development or further exploitation can generate greater revenue for your organization and even add to brand image.

When executed effectively, licensing can be a beneficial partnership for both parties. Determining when your organization should partake in these agreements is about effective analysis of internal and external factors. Particularly for licensors, intellectual property performance data can be a core indicator for opportunities. To learn more about how your organization can use intellectual property data for licensing and in other ways, download this free ebook.

Using data for intellectual property management 

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.