Here is how you can make money out of your IP


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Every other business has some form of IP , without a doubt. To make the most of it as an asset, you need to recognize your IP and, most importantly, determine the best way to make the most out of it. We will discuss “how you can make money out of your IP” in this article.

The IP of your firm is likely to involve everything from your website content and your company’s new products, logo and processes you might have come up with.

Recognize the IP.

To entirely exploit your IP, you will have to have it protected by the trademark, copyright, design right or patent.

When you opt for company incorporation in India, it is recommended to leverage the availability of the intellectual property that ensures cohesive business growth. Once you do that, you open the alternative source of making money through an IP as well. 

Licensing your IP 

Licensing offers someone the right to utilise your patented invented or copyright material. For instance, a soft drink formula on a blog for publication – in a specific area or for a particular customer group. The license offers royalties to you in return. Generally, you receive a meagre proportion of the product’s value, based on what it costs to produce before distribution and transport costs are added.

A patent only lasts up to two decades, so if you do not possess the resources to exploit your IP yourself, accepting a licensing agreement that provides you 10P per sale is a better option than making no money from it at all, said Miles Rees (business development adviser at the IPO).

There are multiple kinds of licenses to suit various trading scenarios. For instance, you can license your IP so that other businesses have the prerogative to exploit it in a specific region where you give your word not to compete. On the other hand, you can allocate an exclusive license that enables you to exploit your IP in the same region as the licensee. Still, it means you cannot assign further licenses to any other businesses in the market.

To help raise the royalties you receive, the licensing agreement must include a minimal sales clause. Also, it must consist of a method of termination so you can license it out again.

Becoming a franchise.

Franchising involves enabling someone to set up and operate their own business under your name or brand. You offer the required practical support and oversee the way your offer is marketed; they would pay you a fee, generally a percentage based on the business’s turnover. This might be suitable if your firm is service-based, for instance, a food delivery business.

You have to be sure that your offer can be imitated without deviation in quality, as your consumers would expect it to be the same everywhere. If your firm has only short-term sales potential or a geographically limited market, it is unlikely to be suitable for franchising.

Rees explained that franchising needs ongoing management as you enable people to use your brand and goodwill. You require stringent rules; if yours is a delivery service and a franchise uses illegal drivers, that is damaging.

Sell your IP: Best way for how you can make money out of your IP

Rees has observed that most of the firms are not inclined to sell their IP until they sell up, as their IP is a central pillar of the business. The exception is if their objective is solely to create things for the other businesses, firms, entities or organizations. Let’s take an example here to make things more lucid, you might sell your IP if you are a designer, but you would not do the same if you are a manufacturer.

If you are drawing up an IP agreement to license, sell or franchise, you are obliged to seek legal advice. Rees said that keep your business negotiations private and confidential and consult with a patent or trademark registration consultant as and when necessary as it would help your business tremendously. Sometimes, we might not possess the legal expertise and know-how to do so.

– To get legal advice on patents, visit the website of the chartered institute of a patent attorney.

– To get legal advice on a trademark, visit the website of the chartered institute of a trademark attorney.

– For further information relating to franchising and finding franchisees, visit the website of the British franchising association.

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