Intellectual property, licensing, and franchising partner Marc Lieberstein recently spoke on the topic of “Innovative Income: Licensing and Monetizing IP” during a panel at the ESCAPADES program hosted by ESCA Legal. Here are the takeaways from the program on how intellectual property owners can creatively use licensing to generate revenue from their IP assets.

Key Takeaways

• There are several different ways brand and IP owners can generate revenue.
  • Licensing in – licensing a third-party brand to make, distribute, supply, or sell products or services.
  • Licensing out – licensing third parties to make, distribute, supply, or sell your branded products or services
  • Co-branding – brands license each other to appear together on a product or service.
  • Collaborations – brands work together and license each other to use their brands collectively to make and sell existing or new products/services.
  • Patent licensing – involves new and novel technology or products that the patent owner can license others to make, use, and sell.
  • Franchising – a brand that is associated with a specific and proprietary business model licensed to a third party to operate their own business, with significant oversight and instruction from the franchise brand owner.
  • NIL - Athletes (professional or student) and celebrities can generate revenue from the value of the personal brand via name, image, and likeness (NIL) licensing, influencer agreements, and celebrity endorsements.
• The purpose behind each relationship may differ. Some are meant to generate revenue; some generate “buzz”; and some introduce the brand or IP to a different trade channel, customer demographic, or product line.
• Take care when entering into these alternative revenue generating relationships. Conducting trademark clearance before your brand enters the new venture is important to avoiding potential third-party infringement claims, and also to ensure you can own enforceable trademark rights after you go to market. Due diligence investigations are crucial to make sure your new partner/franchisee/co-brand is reputable, responsible, and has a history of complying with applicable laws for manufacture, sale, labor, and other marketplace practices.
• Ensure that your relationship agreement — no matter the type — has important provisions to protect your brand/IP. These can include precise definitions for the grant; the term and territory; and audit, termination, and enforcement rights. And while U.S. courts may be adequate to enforce agreements covering U.S. parties and rights, consider an arbitration provision if your agreement involves non-U.S. parties or you are going outside the U.S. with your brand.