When to License Technology or Patents – Strike When Your IP Is Hot

Some companies build their entire business on licensing. But most don’t.

Instead, most companies invest in developing technology and IP to power and back up their own products and services. Then licensing, specifically out-licensing, enters the picture only when something changes: the strategy, the product roadmap, or simply the realization that some assets aren't being used to their full potential. IP team is always tasked with IP protection and portfolio development, and this is where they will focus on. Monetisation may not be the core focus or the skill set of the IP team. When a company has more urgent priorities and licensing revenue isn’t yet embedded in strategy or linked to a concrete action plan, it’s the kind of task that gets postponed indefinitely.

And of course, if you hire people to protect IP, that’s exactly what they’ll focus on, protection, not monetisation. It’s understandable: when a company has more urgent priorities and licensing revenue isn’t yet embedded in strategy or linked to a concrete action plan, it’s the kind of task that gets postponed indefinitely.

This article isn’t about in-licensing (a universe of its own). It’s about the moment when a company should ask: Should we be licensing this out?

The Scenario: Assets with No Home

One of the most common triggers is that something of value was developed, but is no longer used internally. Think of technologies tied to discontinued products, or tools developed for internal use that others might find useful. These assets just sit there, protected by IP, costing money to maintain, yet creating no value.

That's your signal. But it’s not the only one.

In turbulent times, companies increasingly ask how to generate new revenue and make better use of their R&D investments. A structured look at your IP portfolio and technology landscape; what you have, who else is using similar technologies and where adoption is heading, can surface real opportunities to create licensing income.

Sometimes licensing is sparked by outside interest. Another company wants to use your technology. But more often, licensing is driven internally by the realization that there’s untapped value in the portfolio.

Why License?

At its core, out-licensing is about revenue or relationships.

• Revenue provides both reward and reinvestment for innovation.

• Partnerships and ecosystems can grow usage, reinforce your competitive position, or enable joint IP monetization.

In some cases, collaboration with other IP holders can strengthen the collective position and bring more returns for everyone involved.

Timing Is Everything

Too early and there’s nothing to license. The technology isn’t proven or complete enough to be valuable. Nobody is using it yet. The pitch to licensees isn’t compelling.

Too late and the value is gone. In patent licensing, expiry plus the tail for past damages defines your deadline. In technology licensing, the value may last longer—if you’re continuously developing the technology and bundling trade secrets, know-how, or other non-expiring assets.

The sweet spot is when the technology is usable, protected and aligned with current or emerging market needs.

Common Missteps

• Underestimating value: Companies often think licensing is too hard, too costly, or not worth it. Sometimes it isn’t, but a strategic review will give a real answer.

• Overestimating value: Creators of the technology may believe it’s uniquely brilliant. The market may disagree. Landscape analysis helps avoid heartbreak (and wasted effort).

Does This Work in My Industry?

Most likely, yes. Licensing happens in every sector. But it’s especially visible in industries built on shared standards and interoperability, like connectivity, automotive, IoT, streaming and consumer electronics.

Is a Patent Needed?

That depends. Many software or technology licenses work without patents, relying instead on know-how, trade secrets, or code.

But patent licensing is often simpler. It can be based on a clearly defined legal right: a specific patent or set of patents. Unlike in technology licensing, there’s no need to negotiate issues like ownership of improvements, development responsibilities, or transfer of know-how.

What’s more, having patent protection makes it easier to find a licensee, especially for non-core assets. If you're offering a patent license, it's easier for the licensee to evaluate, adopt and justify the deal with patent involved. In contrast, licensing unprotected software, trade secrets, or know-how, especially if they're non-core, often raises questions of risk, enforceability and competitive advantage.

What Makes Something Licensable?

Simply put, a technology is licensable when:

• It has value,

• It’s defined and transferable,

• It’s usable by others,

• And it’s protected, legally and/or practically.

Why would anyone pay for something that not valuable or usable, or which they can use for free?

What Kind of Culture Supports Licensing?

Licensing requires risk tolerance and long-term vision. Revenue doesn’t appear overnight. In some cases, licensing includes enforcement and not every company is ready for that. But whether you enforce or not, you signal to the market what kind of IP owner you are. That perception matters.

Licensing vs. Selling

Licensing can be slower, but you retain ownership and upside. Selling is quicker, but the price reflects the buyer’s risk and discounts future value. One isn’t better than the other. The best path depends on your strategy, your timeline and your capabilities.

Where to start?

If you’re reading this and wondering whether your company has something licensable, it probably does. Licensing starts with awareness. It doesn’t require a perfectly packaged opportunity, just a willingness to review what’s already there. That review doesn’t need to be complex or expensive, but it does need to happen. Whether you talk to a trusted advisor, an experienced licensing partner, or even someone in your own network who’s seen this before, make the conversation happen. Good licensing strategies don’t start with forms. They start with people asking the right questions.

Dare to Look Around and See the Opportunities

Licensing is a way to make your IP work harder. It’s not always the right path, but it’s always worth asking the question: Do we have something of value that others would pay for?

That’s when licensing becomes tangible.

Enhancing IP Monetization with Advanced Technologies: A Strategic Approach

By Sonja London and Vijay Khatri. This article was originally published as a blog in Evalueserve website in December 2024 : IP Monetization with Technologies | IP and R&D Evalueserve

Monetizing intellectual property (IP) can be a significant opportunity for businesses to generate revenue and strengthen their market position. However, many organizations need help, from identifying suitable buyers to navigating complex licensing agreements. With advancements in technology, particularly artificial intelligence (AI), these challenges can be managed more efficiently, enabling organizations to make more out of their IP portfolios and enhance IP Monetization.

Challenges in IP Monetization

Monetizing IP involves several interconnected challenges that can make progress slow and reduce efficiency:

1. Identifying Suitable Buyers or Licensees. Finding the right partners requires accurate market insights. Traditional methods often fall short, leaving businesses needing guidance about who to approach and how to structure deals. The challenge of identifying the right partners is furthermore significant in new technologies such as Blockchain.

2. Determining IP Value. Valuing patents or other IP assets is a nuanced process that involves technical, legal, and market factors. Missteps in valuation can lead to underpricing or missed opportunities.

3. Navigating Licensing Agreements. Setting up licensing agreements requires careful consideration, particularly for joint, cross-licensing, or agreements involving standard-essential patents (SEPs). Misaligned expectations or unclear terms can lead to disputes or inefficiencies.

4. Lengthy Processes. Due diligence, legal reviews, and contract negotiations can stretch timelines, making it harder for businesses to act quickly and capitalize on opportunities.

These challenges highlight the need for more efficient strategies and tools that address the complexities of IP monetization.

Practical Strategies for IP Monetization

Organizations have several options for generating revenue from their IP, each tailored to different goals and resources:

1. Direct Sales

Selling patents or other IP assets outright can provide immediate financial returns. Startups or research institutions often use this approach to raise funding to support other priorities. Patent sales are an essential option to explore before dropping patents because of their low value or because the patent(s) are not aligned with the company’s focus.

2. Licensing Agreements

Licensing allows businesses to maintain ownership of their IP while generating ongoing revenue. Common licensing models include:

• Exclusive Licensing: Grants a single licensee the right to use the IP, often in exchange for a significant fee.

• Non-exclusive licensing: Enables multiple licensees to use the same IP, creating broader revenue streams.

• Royalty-based agreements are common in industries like biotechnology and software, where payments are tied to sales or usage metrics.

• Cross-Licensing: Often used in technology sectors, this involves exchanging rights to use one another’s IP.

3. Technology Transfer

This involves transferring IP from research organizations or universities to businesses, enabling the commercialization of innovations. Technology transfer agreements often include licensing terms or outright sales, depending on the stakeholders’ goals.

Each approach requires a well-planned strategy to balance risks and rewards effectively.

The Role of AI in Modern IP Monetization

AI is becoming integral to IP monetization, helping organizations address traditional challenges while uncovering new possibilities. Here are some ways AI is making an impact:

• Identifying Market Opportunities

AI tools can analyze vast datasets to identify trends, potential licensees, or markets where IP might have the most value. This insight helps organizations make informed decisions faster.

• Improving Portfolio Management

Automated classification systems powered by AI streamline the organization and prioritization of IP assets. This reduces manual effort and ensures that high-value assets are noticed.

• Supporting Valuation

AI can enhance valuation processes by analyzing historical data, market conditions, and legal precedents to estimate an IP asset’s worth more accurately.

• Evidence of Use (EoU) Analysis

AI tools can identify instances of unauthorized usage or potential infringement, creating opportunities for licensing or enforcement actions.

• Enhancing Technology Transfer

AI helps bridge the gap between research institutions and commercial entities by identifying innovations with strong market potential and facilitating connections with interested parties.

By integrating AI into monetization, businesses can streamline workflows, reduce risks, and allocate resources more effectively.

Building a Framework for IP Monetization

The value of AI lies in its ability to bring greater clarity and efficiency to IP monetization. Internally, it can enhance portfolio analysis, valuation, and strategy development. Externally, it supports negotiations, market validation, and deal execution.

This integrated approach allows businesses to focus on high-value activities, improving their ability to adapt to changing market conditions while making better use of their IP assets.

A Measured Approach to IP Monetization

IP monetization offers businesses a way to generate additional value from their innovations, but the process requires thoughtful planning and execution. Organizations can address traditional pain points by adopting AI tools, identifying new opportunities, and creating more efficient workflows.

While challenges remain, technology provides practical ways to navigate them. With the right strategies and tools, businesses can approach IP monetization more effectively, turning their assets into meaningful contributors to their growth and market positioning.

Leveraging Technology for Strategic IP Commercialization

This article was originally published as blog in Evalueserve website in August 2024.

In today's fast-paced innovation landscape, leveraging technology for strategic IP commercialization is more critical than ever. Companies can unlock new revenue streams by effectively commercializing intellectual property (IP), enhancing investment returns, and staying ahead of the competition. This article explores how cutting-edge technologies like AI and data mining revolutionize IP commercialization processes, from market assessment to competitive analysis. Technology can create value by facilitating better IP processes and capturing and communicating the value of the IP.

Technology-driven IP Assessment provides Market Opportunities

Understanding the market opportunity lays the ground for investing in and commercializing a new idea and understanding the technology landscape. Is the IP to be commercialized at the core of the technology area or potentially in a less critical niche? Is it a must-have or a nice one to have? Does it have alternatives? Technology intelligence about specific IPs provides understanding, for example, on whether and by whom the technology has been adopted. Are strong companies on the market offering alternatives, or how valuable is this technology’s contribution to products on the market? The more data available to assist in decision-making, the better. AI technologies facilitate obtaining and analyzing market data, providing a comprehensive understanding of the technology landscape.

Data Mining and AI Analytics Drive for More IP Insight

Today’s most modern technology opportunities focus on data mining and AI analytics. IP analytics allow one to examine relationships, trends, and patterns to facilitate decision-making.

For example, AI can analyze IP portfolios of third parties identified through the technology landscape or market intelligence data and identify commercialization opportunities. AI tools are far faster and more complete than older methods, and they will create numerous clear prospective outcomes and better potential for any commercialization strategy. AI can also analyze and clarify intangible assets related to your IP, identify potential.

Market Analysis is Critical for IP Commercialization

The incredible pace of technology adoption is exciting. Understanding the next opportunity is critical for organizations but is far more complex than ever. Predictive analytics can offer insight into foreseeable technology adoptions in various industries, enabling organizations to spot potential market opportunities more efficiently and comprehensively than a human could develop alone. Market analytics helps steer IP development towards new licensing opportunities.

Market trends analysis enables organizations to understand better what is already being utilized within the market, who the implementers are, and their IP position in the relevant market. This is critical information for patent monetization. There is an opportunity to monetize if there is infringement, such as someone using patented technology without a license. Finding the details of use before moving forward is necessary for any licensing effort.

Additionally, organizations must be able to see where the market shift is occurring. Predictive analytics can show what technology is being adopted (and what may not be), placing more value on those more in-demand applications. Another vantage point is determining whether the technology has a narrow focus within a very niche market, which could limit its overall growth opportunities, or whether it has yet unseen potential for wide adoption over several markets. Predictive analytics expands the data of traditional landscape analysis to more forward-looking insights.

Technology Scouting Benefits Both In-Licensing and Out-Licensing

Technology scouting is a systematic process that aims to exhaustively identify, evaluate, and ultimately access innovative technologies from numerous sources. And technology owners may be scouting monetization opportunities from their vast IP portfolios, while other organizations may be scouting to access innovative technologies through licensing or acquisitions. Technology scouting from both perspectives is comprehensively more detailed than traditional research and requires extensive insight. This process and moving toward IP monetization without enabling technology is labor-consuming and burdensome, even for large organizations.

For technology owners, these tools can support scouting for technologies within an IP portfolio for sale or licensing, providing more opportunities faster and with greater depth of analysis. For organizations seeking access to technology, these tools offer analytics on which organizations to approach for acquisitions, the strength and depth of the IP in question, and insights into the technology's benefits.

Competitive Landscape Analysis with AI Drives Competitor Tracking

Technology commercialization, whether through making products or licensing IP,  requires careful insight into what the competitor is doing or could do next. AI can facilitate this insight by tracking competitor activities or doing freedom-to-operate analysis.

AI systems can monitor the patent filings of specific organizations or within particular industries. This enables organizations to assess their competitors' moves and any potential opportunities for their decision-making. This process could involve analyzing citations, portfolio data, development, or other metrics applicable to the specific technology field.

Organizations can also utilize data other than patents to achieve the best insight and comprehensive results. For example, AI can couple patent data alongside scientific literature, market and product news, mergers and acquisition news, and other resources to facilitate the best possible insight into what the competitor is doing and thinking.

Enhancing IP Portfolio Agility with Dynamic IP Portfolio Management

Technology can help organizations align their IP portfolios with market trends, mitigate risks, and optimize resource allocation through dynamic IP portfolio management.

Utilizing these tools helps adjust IP strategies flexibly as market conditions change, providing better leverage and control based on accurate, in-depth data. For example, a company may initially file a patent in one country to create FTO for themselves (as no one can have a patent and thus cannot use it against them). However, this narrow scope of protection might lead to later adjustments in the IP strategy, such as filing patents in more geographies to enable them to block competitors from such markets.

Keeping the patent filing strategy agile and based on landscape insights will help make IP portfolio decisions quickly in response to changing conditions.

Holistic Data Approach Provides for More Effective IP Strategy

IP commercialization tools and management technologies enable insights based on the data available. The focus should not be only on patents; the data should also cover trade secrets and know-how. Advanced systems can provide a holistic view of IP in the context of business operations and strategy, enabling better alignment of IP strategy with organizational goals.

For example, combining business intelligence data on the licensing market and product sales volumes with royalty data provides better insight into royalty compliance.

Collaborative Platforms Enable Cross-Functional Teams

Collaboration enables data sharing, reducing market time across all product development stages. Utilizing collaborative platforms that allow cross-functional teams to bring information together and facilitate IP commercialization provides a clear advantage to all involved.

These platforms facilitate interactions between IP, R&D, and business development teams. They enable a cohesive, streamlined approach to identifying and exploiting commercialization avenues in a highly profit-driven strategy. Efficient team collaboration also reduces the costs of such processes.

Moving Beyond Limits and Ahead of Competition

It is difficult to underestimate the importance of leveraging technology in the strategic shift from IP management to commercialization. IP is simply a cost unless it is used strategically. Commercialization can include creating revenue by licensing, selling IP, or commercializing the technology through the company's products. Even in the latter option, there may be worthwhile opportunities to address adjacent markets outside the organization's specific product area by licensing IP.

Look towards the future. Technology is shaping a new era of IP commercialization strategies that could enhance profitability faster with less risk and better business insights.

Rethink your IP approach. Consider today's technology a critical enabler for successful commercialization before your competition does the same. Create a holistic IP approach, considering the intellectual assets beyond patents alone. Ensure your IP approach is pragmatic and business-oriented, and utilize outsourced resources to achieve targets without developing new technologies that support commercialization.

Navigating Technology Licensing for International Manufacturing Businesses

This article has been published in IP Briefs® in February 2024. Read as a Pdf.

In the rapidly evolving landscape of contemporary manufacturing, keeping pace with competitors demands commitment to innovation. As companies strive to incorporate cutting-edge technologies into their manufacturing operations, accessing the new innovation may become complicated. While traditional procurement methods involve obtaining parts from the supply chain, technology licensing emerges as alternative way of acquiring innovative solutions. In this article, we dive into the unique advantages of technology licensing and why it plays a growing role in the manufacturing industry.

Going beyond Traditional Procurement with Technology Licensing

In the conventional manufacturing industry, companies primarily rely on their supply chain for materials and components. Traditional way of purchasing is well known operation and agreement concepts are familiar to lawyers and business leaders. It is relatively easy to understand the warranties and liabilities given by a part supplier. However, this conventional and transactional approach does not work when manufacturers are willing to integrate transformative technologies into their business. Unlike the straightforward acquisition of physical goods, adopting technology requires a deeper level of collaboration and comprehension of the underlying intellectual property and the technology assets in question.

Unlocking Business Potential through Technology Licensing

Technology licensing enables businesses to get access to various strategic benefits. Here are a few key elements to consider.

Access to Specialized Expertise and Know-How. Technology licensing is more than that purchasing of products. Licensed technology assets often include specialized expertise and knowledge (know-how) developed by technology vendors over a long time. Through licensing agreements, licensee companies gain ongoing support, training, and updates to technology which ensure comprehensive understanding and optimal utilization of the technology they adopt. This collaborative relationship goes beyond traditional purchasing, and often requires mutual investment in the successful implementation of the technology.

Flexibility and Customization. In contrast to traditional procurement's standardized components, technology licensing offers potentially a higher degree of customization of products. Often technology assets can be applied to improve current manufacturing technologies and enable making of completely new applications, creating new business opportunities and revenue streams.

Risk Mitigation. Innovation is inherently risky, involving uncertainties like technology maturity and market shifts. Innovators face the dual challenge of potential market loss to alternative technologies and the risk of developing technology suitable for business applications. Licensing technology from innovators mitigates both technology and market risk that manufacturer would have if they developed technologies themselves. Further, by leveraging the innovator’s technology and their expertise during implementation, licensees can significantly reduce disruptions and setbacks. This kind of strategic collaboration effectively mitigates risk, providing benefit for technology licensees.

Cost-Effective Innovation. No-one can innovate on behalf of the whole world, often not for even a specific industry. Developing new technology in-house demands substantial investments. Therefore the innovator would have paid for costly development, which would be compensated by licensee only after the technology was mature enough to be licensed. This decreases also manufacturer’s investment risk. Thus, technology licensing offers a cost-effective alternative, allowing companies to leverage existing innovations, without investing time and resources for long-term development.

Accelerated Time-to-Market. In the fast-paced business landscape, time is a critical factor. Technology licensing enables manufacturing companies to bypass lengthy development cycles they would need in-house and swiftly integrate technologies already tested and proven. This approach provides a competitive edge, allowing for the rapid delivery of new products.

Focus on Core Competencies. Manufacturers excel in producing goods, not necessarily in developing every component or process. Technology licensing allows companies to focus on their core competencies while outsourcing the development of specialized technologies to those with expertise in those areas. This strategic division of labor enhances overall efficiency, with each party contributing its expertise to the partnership.

Market Differentiation. In an era where OEMs wish to provide for consumers’ demand of constant innovation, companies embracing new technologies will stand out in the market. Technology licensing enables manufacturers to differentiate themselves by incorporating cutting-edge solutions that align with evolving consumer preferences. This differentiation not only attracts customers but also positions the company as an industry leader.

Scalability and Global Reach. Technology licensing facilitates scalability of innovation without the need to scale up internal research and development capabilities. Manufacturers can tap into a global pool of technological advancements without geographical constraints. This access to a broader range of innovations enables companies to expand their operations and remain competitive in their respective industries.

How to Navigate the Technology Licensing Landscape

While the benefits of technology licensing in manufacturing are self-evident, legal and business professionals must navigate the landscape with diligence and foresight. Thorough due diligence is crucial before entering any technology licensing agreement. Licensee’s business teams should assess the innovator’s technology solutions and their own business case for the technology. Licensee needs to understand which technology assets are needed and what kind of business benefit they provide for. Analysis should be done on the portfolio of intellectual property rights holistically, not only understanding the patents but also the know-how, software and other technology elements. Developing general understanding of the technology landscape would be useful homework for both parties. Finally, licensed technology should be enabler for company's strategic objectives. Understanding the potential risks and rewards is essential for making informed decisions.

It's essential for legal and business professionals to recognize that, as explained above, licensor has made significant investments into technology development. Technology mature enough to be licensable has over time incurred substantial investments in development, productization, testing, expert personnel, and intellectual property creation. Consequently, licensed technology always comes with a price tag. Licensee should understand that accessing technology which enables significant advancements or new business does not come for free. Payment for access to technology should be viewed as investment, not as cost.

Licensing arrangements often include various intellectual property rights, including patents, copyrights, trademarks, databased and trade secrets. Both legal and business professionals need to be aware of the specific rights granted under the agreement and any restrictions imposed. As technology assets may vary, it is important to understand that intellectual property protection and license grants works in different ways for different assets. Understanding these distinctions is crucial for legal compliance and successful integration of technology into business operation.

The success of a technology licensing agreement depends on whether a win-win agreement with clarity of terms have been achieved. Legal and IP professionals should negotiate a comprehensive agreement that should address concerns of both parties. Licensor typically needs to maintain control and transparency of the usage of its valuable technology assets and ensure compliance in licensee fee and royalty payments. Licensee typically wants to ensure business continuity and manage the relevant business risks. It goes without saying that well-defined agreement minimizes the risk of misunderstandings and disputes going forward.

Effective communication between the technology licensor and the adopting company as licensee is vital for the success of a technology licensing arrangement. Regular updates, collaborative problem-solving, and a shared vision for the technology's evolution contribute to a positive and productive relationship.

Given the complexity of licensing arrangements and expertise required to handle intellectual property questions, both licensors and licensees are strongly advised to engage with expert intellectual property professionals. Whether in-house or external consultants, they bring a depth of knowledge and experience to the negotiation table and help each party to do their homework before negotiations and finally successfully close the licensing deal. They can guide the parties through the complexities of intellectual property law and strategy, ensuring that the final agreement is not only legally sound but also aligns with the strategic goals of both parties.

In conclusion, technology licensing stands as a dynamic and strategic alternative to traditional procurement methods, offering manufacturers access to innovation that goes beyond merely acquiring physical components. By embracing technology licensing, companies can tap into specialized expertise, achieve flexibility and customization, and mitigate technology and market risks associated with innovation. Further strategic advantages include accelerated time-to-market, enabling focus on core competencies, market differentiation, and the scalability required to address global markets. Successful technology licensing arrangement can be key strategic enabler for successful and sustainable innovation in manufacturing.