Licensing your intellectual property

Bill Russell, Head of the Bilateral Relations team at the UK Intellectual Property Office in London, explains how the management and licensing of your intellectual property can make all the difference to your business.

Intellectual property rights are a form of protection that gives the owner the ability to take legal action under civil law to try and stop others from making, using, importing or selling their creation.

There are different types of intellectual property rights:

  • Patents protect new inventions and cover how products work, what they do, how they do it, what they are made of and how they are made.
  • Trade marks protect brands. This could be for a business name, a product or a service. The trade mark could be made up of words, logos or a combination of both and can even be sound or action based.
  • Design protects the overall visual appearance of a product.
  • Copyright protects books, art, music, websites, photographs, software, databases, films and print, radio and television broadcasts and promotional material.

As well as protecting your own intellectual property, you should make sure you don’t infringe anyone else’s rights.

Why might I license my intellectual property?

Licensing intellectual property is important to all sorts of businesses. Companies can derive significant income from licensing, and licensing can offer flexibility in the way a business develops. Like other forms of property, you can buy, sell and license IP.

The management and licensing of the different forms of intellectual property can be important to the success of the business that invents or creates a product, to manufacturers who make the product, to the designers who configure or refine a product’s appearance and to the producers of the packaging and marketing literature and materials.

You could consider licensing your own IP, or acquiring the right to license others’ IP for the following reasons:

  • Sharing risk: Where a licensor licenses the right to manufacture and sell products, the licensor receives revenues from that licensing but does not take the risk of manufacturing, promoting and selling those products. On the other hand, the licensee has the right to use the IP without the expense and risk of the research and the costs of developing the product.
  • Revenue generation: An owner of IP may commercialise the IP themselves and may obtain additional income by licensing the IP to someone else to commercialise it in a different field.
  • Increasing market penetration: An owner of IP may license another business to sell in territories that the owner cannot cover.
    • Reducing costs: A business may ‘buy-in’ innovation to reduce its research and development costs.
    • Saving time: A business may get its products or services to market more quickly by acquiring a licence to use existing IP, instead of re-inventing the wheel (sometimes referred to as an “engineering workaround”).
    • Accessing expertise: By taking a licence, a business may tap into expertise that it does not have in-house.
    • Obtaining competitive advantage: By acquiring a licence to use IP, a business may obtain an advantage over its competitors.
    • Collaboration: Businesses may want to work together to develop new products and services.

How do I go about it?

Whenever you think about taking or granting a licence of any IP the first step should be to assess the needs and objectives of your business and how licensing might help meet them. The terms and conditions on which IP is licensed may vary. The licensor and licensee usually agree those terms and conditions by negotiation.

The free, fast and easy-to-use online IP Health Check tool from the Intellectual Property Office can help you identify your IP assets and provide you with the next steps on how to protect them.

You can find more information on licensing at the Intellectual Property Office’s website, including licensing checklists and skeleton licences.

Bill Russell is Head of Bilateral Relations at the UK Intellectual Property Office in London, the official government body responsible for intellectual property (IP) rights in the United Kingdom. 

Topics: Export Planning, Getting Started, Legislation & Regulation, Product Development, and Protecting IP Abroad
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