Once a business becomes successful, it likely has an entire intellectual property portfolio that includes patents, trademarks and various copyrights. And, one of the ways successful brands and businesses increase their income streams is by licensing parts of that intellectual property portfolio out to other businesses, sometimes, even competing businesses. However, without the proper planning and strategic strategies, intellectual property licensing can lead to Illinois commercial litigation.
Think about the business objectives
Before entertaining intellectual property licensing, the first step is to think about the business objectives of that licensing. Is the goal to step back from active business operations and license the entire business IP?
Does the business simply want to find new income streams? Who should be allowed to use the business IP, and to what extent should that IP be licensed? These are all questions that should be answered, and a commercial litigation attorney can help work through these strategic objectives.
For mechanical devices and systems, like hardware and computer software, a Godfrey, Illinois, business can license their patents to allow other businesses to utilize that IP. For example, utilizing a user interface across multiple platforms, or allowing your software to work on other companies’ hardware.
For example, AndriodAuto and Apple CarPlay are working on most, if not all, new vehicles. Hotels, like Hilton, can license their trademark to other hotels without actually having to house any customers. Other copyrights can be used to help market other business services, like artwork, photographs, etc.
What to consider
There are many Illinois business considerations to consider prior to licensing anything from your IP portfolio. The first is costs. Will the cost be royalty based, a recurring fee, lump sum fee or some other cost scheme (profit sharing, etc.). Next, is the length of the license. Should it be renewed monthly, bi-annually, annually, be indefinite or some other length of time?
Can it be canceled unilaterally, and if so, how can that be done and should fees be returned. Another concern is territory. In other words, where can the licensee use their purchased license? Is it locally, within a state, regional, national, international, etc.?
The license can also be exclusive or non-exclusive. For example, many hotels allow multiple individual operators to use their brand in the same region. Another consideration is the extent of the rights. Can it be sold, reproduced, the IP distributed or adapted, etc.?
Penalties should also be considered for infringement or doing stuff outside of the Godfrey, Illinois, license. Indemnification should also be considered, especially where one allows the use of their brand identity. Think about which state or country’s laws will govern and how disputes will be resolved (i.e., arbitration, mediation, etc.).