Does your business collect customer data as part of delivering or selling your product or service? If so, you might be overlooking one of your most valuable IP assets…especially if you’re looking at your intellectual property as only a product or service.


Companies today suck up data like vacuum cleaners sucking up bread crumbs. They invest tens of millions of dollars to learn about their customers, markets, and industries. And they always want more.

Companies license this data for various purposes including business intelligence or developing their own products and services. Data can be accumulated and packaged from public sources, such as real estate listings or business records, or proprietary data acquired from customers, research, or testing.

I consulted a woman who created a patented learning assessment toy. It collects data about the kids learning skills through a series of interactive tests. It analyzes the results and, based on a series of questions answered by the parents, provides customized recommendations on the best type of learning toys to enhance their child’s learning skills. The real value of this IP is not the learning assessment toy, it’s the data recommending the best toys. For example, the data could be licensed and used by toy companies to help them develop better educational toys for their customers.

Your data can be licensed in several formats, such as a database or as a data feed, to multiple parties and markets simultaneously. It can be licensed on a subscription basis, per use or per specific database. For example, retailers generate millions of dollars by licensing their point-of-sale and other data to business partners on a subscription basis.

Data enhancement can increase the value of your data. For example, you can combine your data with other data from public sources (such as new home listings) or aggregate comparison data on the usage of different products.

Sometimes the value of your data can create a new business model. A restaurant supply company designed a system for better customer services. They provided their customers with a monitoring system to track their oil usage. When customers cooking oil ran low, it automatically re-ordered before than ran out. They quickly recognized the vale of the data, and changed their business model. Instead of selling restaurant supplies, they switched to consulting services, and licensed their usage data (and related monitoring technology) to equipment manufacturers and restaurant owners.

Here are some key points to keep in mind when licensing your data. Make sure the agreement is very clear on the data ownership and specifies the usage rights. One way to do this is listing the types of customers included as well as excluded customer segments. For example, medical office only, excluding hospitals. Also specify how you’ll provide the data (such as monthly downloads), and what the licensee must do to keep up, control and protect your data. Using data to get data can be a big negotiating point. Be sure you’re clear on who owns the rights to any derived data.

If your business collects data, don’t overlook it’s value as a revenue generating IP. Data IP is confidential information you can protect as a trade secret, copyright, or a database patent. It requires diligence in keeping it confidential to maintain its protection. Your licensing revenue opportunities increase as you create different ways of packaging your data. You can license the data itself, and you can also create new proprietary data packages by acquiring and merging information from other sources.


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