{"id":11004,"date":"2023-11-21T07:14:51","date_gmt":"2023-11-21T07:14:51","guid":{"rendered":"https:\/\/dmsretail.com\/RetailNews\/how-to-lease-use-intellectual-property-2022\/"},"modified":"2024-02-01T17:23:36","modified_gmt":"2024-02-01T17:23:36","slug":"how-to-lease-use-intellectual-property","status":"publish","type":"post","link":"https:\/\/dmsretail.com\/RetailNews\/how-to-lease-use-intellectual-property\/","title":{"rendered":"How to Lease & Use Intellectual Property"},"content":{"rendered":"

\"Retail<\/a><\/p>\n

\n

\u201cI want our products to be everywhere at once. But I don\u2019t have the time, manufacturing capabilities, or team to make that happen.\u201d\u00a0<\/span><\/p>\n

That\u2019s a thought process running through many business owners\u2019 minds. <\/span><\/p>\n

They know they want to expand into new markets, develop new product lines, and diversify their income streams. The only problem? Lack of resources.<\/span><\/p>\n

Brand licensing exists to solve that issue. <\/span><\/p>\n

It happens when a company grants permission for other businesses to commercially use their intellectual property\u2014be that their brand name, software, or patent\u2014in return for royalties.<\/span><\/p>\n

If you\u2019re unsure whether brand licensing is right for your business, this guide is for you. <\/span><\/p>\n

We\u2019ll walk through the types of deals you can broker, the benefit of licensing your intellectual property, and examples of brands who\u2019ve successfully licensed their products.\u00a0<\/span><\/p>\n

What is Brand Licensing?<\/strong><\/span><\/h2>\n

Brand licensing is the act of giving permission for another company to use your business\u2019s intellectual property (IP).<\/span><\/p>\n

Brand owners lease their patents, software, or characters to other companies. <\/span><\/p>\n

Licensees can re-sell the IP at a higher price or manufacture merchandise with the IP on it. <\/span><\/p>\n

Either way, the licensor gets a kickback\u2014as a percentage commission or a one-time fee\u2014as a thanks for granting permission.\u00a0<\/span><\/p>\n

One famous example of a brand licensing deal is McDonald\u2019s. <\/span><\/p>\n

Its infamous Happy Meal boxes contain miniature toys of whichever movie is out in theatres that month\u2014from Trolls<\/em> to Fast and Furious<\/em>. <\/span><\/p>\n

McDonald\u2019s gets a licensing agreement from the creator of those movies. <\/span><\/p>\n

It gives the fast food brand permission to manufacture those characters for their Happy Meal boxes.<\/span><\/p>\n

5 Types of Licensing Deals<\/strong><\/span><\/h2>\n

Brand and Trademark<\/strong><\/span><\/h3>\n

Businesses can own the rights to use a brand name or logo. These are called trademarks, and exist to prevent other companies from using a company\u2019s assets. <\/span><\/p>\n

Customers know if they\u2019re buying from a brand with a trademark, they\u2019re the real deal.\u00a0<\/span><\/p>\n

Companies can give licenses for other brands to use their trademarks. Take Coca-Cola for example. <\/span><\/p>\n

Independent brands who manufacture the fizzy drink on behalf of Coca-Cola can do so because they have a trademark license. <\/span><\/p>\n

These partnerships drive upwards of $1 billion in retail sales for the mega brand.<\/span><\/p>\n

Patents<\/strong><\/span><\/h3>\n

A patent is similar to a trademark in the fact that it\u2019s intellectual property legally protected from unauthorized commercial use. <\/span><\/p>\n

The only difference is that patents are given to new inventions, not brand names or logos.\u00a0<\/span><\/p>\n

Patents can be awarded for new machinery, design (consumer product), or plant inventions. <\/span><\/p>\n

Take Lollacup for example. Anyone who wants to use its weighted children’s sippy cup needs a patent license from the brand.\u00a0<\/span><\/p>\n

Character, Entertainment, and Art<\/strong><\/span><\/h3>\n

Characters are another type of trademark that brands can license. The most obvious example? Disney. <\/span><\/p>\n

You\u2019ll find Mickey Mouse, Marvel, and Star Wars characters on merchandise all over the world\u2014not just official Disney stores. <\/span><\/p>\n

Third-party brands get a license to use Disney\u2019s characters on their clothes, home decor, and mugs.\u00a0<\/span><\/p>\n

These trademarks pass over into entertainment. Disney also licenses its movies, TV shows, and music. <\/span><\/p>\n

Even footage of its theme parks can only be used by those with a brand license.\u00a0<\/span><\/p>\n

Software<\/strong><\/span><\/h3>\n

If you\u2019re paying to use a software, you\u2019re buying a single-user or team license. <\/span><\/p>\n

You\u2019re not allowed to sell access to the software to anyone else\u2014unless you have a multi-user license. <\/span><\/p>\n

This allows third-party companies to re-sell a software company\u2019s code to other people.\u00a0<\/span><\/p>\n

Sports<\/strong><\/span><\/h3>\n

The licensed sports merchandise market is big business. <\/span><\/p>\n

It reached a value of $30 billion in 2020 according to the Global Licensing Group\u2014a figure predicted to grow at a compounding annual growth rate of 5% through 2026.\u00a0<\/span><\/p>\n

Sports teams in the NBA, NFL, and European soccer leagues all broker brand licensing deals. <\/span><\/p>\n

Each agreement allows third-party companies to produce merchandise with the team\u2019s logo or player name. <\/span><\/p>\n

Soccer team Manchester United, for example, makes more than $115 million from licensing agreements every year.<\/span><\/p>\n

The Benefits of Licensing Your Brand<\/strong><\/span><\/h2>\n

Grow Your Brand and Reach a Wider Audience<\/strong><\/span><\/h3>\n

Licensing your brand essentially means forging a partnership with another business. <\/span><\/p>\n

One of the main benefits of these partnerships is being able to reach a wider audience.\u00a0<\/span><\/p>\n

Working with another brand gives you instant access to their customers and audience and vice versa. <\/span><\/p>\n

Whether you\u2019re the licensor or the licensee, both brands lend each other their audiences to grow and expand into a new age demographic, geographic location\u2026 you name it. <\/span><\/p>\n

Market penetration is easier when you\u2019re working with licensees who\u2019re already established there.<\/span><\/p>\n

Build Stronger Relationships with Customers<\/strong><\/span><\/h3>\n

As your brand grows, your customers\u2019 desires and expectations grow with it. <\/span><\/p>\n

No matter the size of your company, it can be hard to grow a product lineup in a meaningful way that keeps pace with those customer expectations.<\/span><\/p>\n

Licensing your brand is one way to build bridges between your manufacturing and product design capabilities. The end result? <\/span><\/p>\n

Driving repeat sales and delivering the products your customers are looking for.<\/span><\/p>\n

The licensed product definitely spreads faster on social media. And when people buy it, they love sharing it. That’s a huge part about our businesses and our positioning: we’re fun. It makes a lot of sense when we do fun licenses because it puts smiles on people’s faces and they love showing off their coolers.<\/span><\/p>\n