Other businesses may request permission to use your intellectual property (IP). For instance, a company may want to use your innovation to enhance its products or services.
Licensing your IP can offer numerous benefits. For starters, it can be a source of income. Businesses that use your IP rights will pay you through royalties, licensing fees and any other agreed-upon forms of compensation. Further, your marketing share can be increased. When a business uses your logo on its products, you can access new markets.
So, should you allow other businesses to use your IP?
Assess each request thoroughly
When you receive a request, you need to assess it thoroughly. Find out what the business deals with, what its reputation is, how they want to use your IP and if its intended use of your IP aligns with your goals.
You should also assess the potential risk to your brand by giving a business permission to use your IP. If the negative impacts of granting a request outweigh the positive ones, it can be wise to deny it.
Have a well-drafted agreement
When you accept a request, the respective business should sign a licensing agreement. This contract needs to be well-drafted. It should clearly state the IP rights the other party can use and to what extent. It should also outline the compensation structure.
Additionally, include a termination clause explaining the conditions under which the agreement can be ended. For example, if the other party uses the IP in a way not authorized by the agreement (breach of contract).
Your contract should not have ambiguous language. Every clause should be clear.
If you don’t want to sell your IP rights, you can allow other parties to use them while you retain ownership. Learn more about IP licensing to know what to do when you receive a request.