95 percent of active patents fail to earn even one dollar of licensing revenue. It’s not just patents that go unused…other types of IP including trademarks, copyright and trade secrets lie abandoned and unused, locked inside businesses of all sizes who are missing out on a treasure trove of new income opportunities.
A recent research study conducted in the UK concluded that small and mid-size businesses don’t understand their intellectual property assets and how to use them strategically to generate more cash flow and revenues. In many cases these businesses didn’t even identify many of their IP assets,leaving them unprotected and unused.
In many cases, all your time, money and personnel are focused on running the business, making and selling your products or services, and little time, if any, is focused on managing your IP assets.
Failing to manage your IP assets pro-actively costs you potential revenue opportunities. It sits on your shelf until one day you happen to get a phone call from someone who saw your patent and called you about licensing it? But without an active IP strategy, you don’t know whether this license opportunity will help or hinder your company.
Actively managing your intellectual property assets requires creating an IP strategy that is part of your long and short-term business objectives. You find different ways to leverage your IP into new markets, applications and revenue opportunities. You invest the time to find possible out-licensing opportunities for unused or under-used parts of your IP.
You may have several patents you’re not using, or a trademark that fits other product categories outside your core market. Investing a little time will unearth some valuable licensing opportunities you can turn into tremendous income sources.
By licensing out your IP, your company generates income from “unused portions” of your IP. You exploit other markets by allowing the licensee to use your IP in a different market. If your IP is useful to several industries, you can license it to companies in each of these industries. The Ford Motor Company has been licensing its brand since the early 90s, and has over 400 licensees making everything from video games to die-cast models and toys.
The old industrial ‘bricks and mortar’ era is being replaced by a powerful knowledge-based economy, with ideas and innovation as the new currency. In this environment, IP is no longer just a means of protecting innovation – it’s also a potent business asset and a means of capturing value. Most high technology companies in various industries including aerospace, telecommunications, computers, semiconductors, and electronics rely on IP assets to protect hard-won market share and competitive advantage.
Smart businesses aren’t sitting around waiting for buyers to cash in on their companies’ unused IP assets. They’re busy figuring out how much their IP assets are worth and the best ways to monetize that value. Even traditional industries such as manufacturing, energy, and automotive, are led by companies focused on developing and exploiting their IP assets.
Your business IP is valuable gold hidden away in a secure place. But your IP is like ripe fruit – valuable today, but if it’s not used, it will become rotten and inedible. IP Rights are the most important form of competitive power your business owns. They are the foundation for your market dominance and continuing profitability. Your IP is a revenue generating asset and it’s often the key reason investors are attracted to your business.
Intellectual property is the fuel that keeps your business moving forward. It’s a sustainable and highly renewable resource that is your greatest competitive advantage – if you know how to manage it for maximum return at every stage of your business life cycle.
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. His first book, Hidden Wealth: The Money Making Power of Licensing was released in 2019 and is available on Amazon.com. He’s also a published writer with articles appearing in several prestigious trade magazine including The Licensing Journal, Intellectual Property Magazine, and License India. Rand also mentors at the Cal State Fullerton School of Business and Economics and is a judge for their startup business plan competitions.