What is Intellectual Property?
A licensing agreement is a partnership between an intellectual property rights owner (licensor) and another who is authorized to use such rights (licensee) in exchange for an agreed payment (fee or royalty). A variety of such licensing agreements are available, which may be categorized as follows –
- Technology License Agreement
- Trademark Licensing and Franchising Agreement
- Copyright License Agreement
Some of these agreements form part of one single contract since in transfer of this nature many rights are involved and simply not one type of intellectual property right in practice.
All of these mechanisms either on their own or in combination will provide your SME, as a licensor or licensee, a wide variety of possibilities in conducting business in your own country or elsewhere. As an intellectual property owner and a licensor, your SME can expand its business to the frontiers of your partners’ business and ensure a steady stream of additional income. As a licensee, your SME can manufacture, sell, import, export, distribute and market various goods or services which it may be prevented from doing otherwise.
Related Topic: Intellectual Property Protection: What and for How Long?
Managing the Intellectual Property Assets of Your SME
Management of a company’s IP assets is much more difficult than just acquiring the formal IP Rights through the national IP office. Patent or trademark rights are not worth unless they are adequately used. However, part of a company’s valuable IP may not require formal registration but may require other measurements for protection. Companies who are willing to extract full value from their know-how methods and creativity should take adequate steps to develop an IP strategy for their business and seek to integrate it into their overall business strategy. This includes IP considerations while making business plans and marketing strategies. A basic IP strategy would include at least the following:
Policy on IP Acquisitions
A single product or service may be protected by various forms of IP rights covering different aspects of that product or service. SMEs must consider the best protection package and make sure that all the formal rights are acquired as early as possible. SMEs should also bear in mind that creating a comprehensive IP portfolio may be a considerable investment. This is particularly the case for patents. SMEs must therefore carefully assess the costs and benefits of patenting on a case by case basis and develop a strategy/policy on patent acquisitions which is appropriate given their budget and market opportunities.
Policy on IP Exploitation
IP assets may be exploited in a variety of ways. These may include the commercialization of IP-protected products and services; the entering into licensing or franchising agreements; the sale of IP assets to other firms; the creation of joint ventures; the use of IP to obtain access to other companies’ technology through cross-licensing agreements; or the use of IP to obtain business finance. Enterprises should decide in each case how they may best exploit their IP assets both domestically and internationally.
Policy on IP Monitoring
Consulting patent and trademark databases regularly is important in order to find out about recent technical developments and new technologies, identify new licensing partners or suppliers, new market opportunities, monitor activities of competitors, identify possible infringers, and avoid infringing competitors’ rights.
Policy on IP Enforcement
A clear policy on IP enforcement is crucial due to the losses that may be incurred by the existence of counterfeited goods in the market and the high costs involved in some IP disputes. A description of how different companies with different levels of technological capacity may develop an IP strategy to suit their own needs is contained in a WIPO paper on “The Management of Intellectual Property Rights by Small and Medium Sized Enterprises”