Intellectual property (IP) is a valuable asset for any company, and it can be transferred. To put it another way, IP can be purchased or in-licensed, and your own IP can be sold or out-licensed.
Is it possible to get a competitive edge by purchasing and licensing someone else’s intellectual property?
IP ownership or a secure IP license can provide a degree of exclusivity in a market, or at the very least a competitive edge, and hence can be used to attract investment. Other advantages of acquiring or licensing IP include:
- Avoid infringement of third-party intellectual property rights to get business certainty.
- Reducing the risk of investing money in early R&D by purchasing or licensing an innovation that has previously been proven viable.
- Developing a collaborative relationship with the IP owner, thereby reducing risk and gaining access to external expertise.
- Allowing the utilization of current products protected by the IP to reduce time to market.
- Entering new markets in nations where IP would otherwise be a barrier.
Is it possible to profit from selling and licensing your own intellectual property?
Although IP ownership does not ensure profit, obtaining exclusivity through selling the invention covered by the IP might raise the chance of profit. All IP rights can be sold or licensed for a fee, which can help you make more money. A sale would result in the purchaser gaining ownership of the IP rights in exchange for a certain quantity of money. A license, on the other hand, grants the licensee the right to profit from the IP right in exchange for royalties, while the owner retains overall control. Other advantages of selling or licensing intellectual property include:
- Access to new markets — licensing IP to a local business in another country can be a simple method to enter a geographically distant market without the risk and expense of going there yourself. Alternatively, licensing IP to a company in a different industry can allow you to expand your geographic coverage in areas where you already have a presence.
- New revenue stream – usually in the form of royalties or a sale payment from a third party. This is especially appealing if you don’t have the means to market the product yourself or want to concentrate on other aspects of your company.
- Minimize the risk – the buyer/licensee may be a more established company with a strong R&D team and proven sales channels to quickly exploit the product or service. As a result, the path to success can be shortened, and business risk is reduced.
- Saving money – collaborating with another company that already has a manufacturing and distribution facility can save a lot of money by avoiding the need to build these capabilities from the ground up.
You may just lack the motivation to bring the covered product or service to market and instead prefer to leverage the IP to raise funds for other investments.
When you need to decide to enter an IP arrangement, an expert IP attorney can help you audit your IP and analyze the existing IP environment. The agreements that go along with them can be complicated, and they need to be carefully drafted to ensure that your company gets the optimal benefit.
You can find the list of international IP Firms here