For budding entrepreneurs who have the fortitude to actually bring their ideas to market and not simply talk about them, few things are as appealing as the idea of licensing their innovation to the masses. Often, in doing so, the anticipation of unlimited income streams follows. This income – often important from an innovative standpoint – can give rise to previously unattainable research and development efforts, or just as importantly, a full-scale marketing blitz complete with all the fancy bells and whistles afforded by today’s technology.
But a question I’m often asked (okay, well, I’m not asked the question that often, but I’d like to be) is how to best balance the trade-off of access to new markets and, therefore, create a larger customer base for your innovation, with the always important issue of control, or more importantly, how to hang on to it. This is one of the more delicate balancing acts when a start-up or small company elects to license its intellectual property and it must always be measured against the particular circumstances of any prospective deal. However, certain “truisms” of the practice emerge. The guidelines set forth below are equally applicable to both the experienced licensor as well as the less-sophisticated novice.
Joel MacMacull, Esq.