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.