By: James Kashmer (LinkedIn profile here.)
Going the license route is a “no brainer” right? You get lots of money up front and still get to sit back and collect all those future royalty checks over the life of the patent!!!! You do not need to worry about raising money, hiring employees etc etc…….not a bad way to go right?
I wrote previously “there is NOT a shortage of new ideas or inventions that warrant licensing and development”. Visit any web site where you can find available IP from Government and Universities to see and understand this. Try Googling “tech transfer” sometime…..(or just click here–I did the work for you).
The truth is Government and Universities do a great job of licensing technology with revenues in the billions of dollars each year. Unfortunately, only a relatively small percentage of available IP is ever licensed despite their best efforts.
What Are The Potential Markets And Who Are The Leaders In Those Segments?
Chances are you did not create your idea or invention in a vacuum. It’s likely you already knew something about the subject; who the players are in the field; something about their strengths and weaknesses; something about the current offerings that you could make better. Chances are that, as you talk to people, you will learn about additional markets or potential applications. Spending some of your time researching potential markets (including their size and competing companies) is a good idea even if you have no intention of licensing your IP. By doing so you likely will come up with alternative paths on how to proceed.
In the Medical Device Industry as an example, it is not uncommon to enter a market that has fewer FDA regulatory requirements then an initial targeted market. On the other hand if your intention is to develop your IP ONLY for a specific market or industry, the background work will be very useful for you or your “tech transfer office” to target potential licensees outside your interest.
How Do I Get People To Understand What I Have?
Newer “cutting edge” or technically advanced IP is often hard for people to understand (and therefore value). Do not underestimate how big a problem this is and how important it is to find ways to make people “understand” what you have AND how to apply it. It is my strong belief this is a major key to success and the earlier in the process it is done the better even when resources are tight.
What Is My “End Game” Or “Exit Strategy”?
Thinking of an “end game” or “exit strategy” early in the process does not sound like a useful exercise, but I would argue that in fact it is. Managing expectations and measuring results helps to keep the head “screwed on” and focused on the important objective(s). Without thinking about these early on, designing for “manufacturability” can be challenging later on. If you are strictly planning to only license your IP, you may be able to make your idea more or less attractive by considering what’s coming downstream.
Questions? Comments? Thoughts? Let me know. Until then, keep the ideas coming.