FAQs - Licensing Intellectual Property (IP)

Licensing is a key business strategy. It's a way to maximize the earnings from inventions and creative works, which are called intellectual property or "IP.".

What is licensing?

Licensing is when you grant some rights to intellectucal property "IP" that you own. It is really a partnership of mutual cooperation between the licensor, who owns the IP, and the licensee, who is given the right to use it for certain purposes.

Question: What are royalties?

Royalties are a way of calculating compensation for use of intellectual property. The licensee is granted the right to use it for a royalty. Royalties are usually based on a percentage of the revenues that are generated. For instance, if I license my course to a company and say, For every subsequent use of this course, I get 5% of the revenue, thats the royalty 5% of the revenue would be the royalty/payment that I would receive.

Question: Are there rules of thumb for royalty amounts?

Figuring out what royalty to ask for is always a challenge. As sort of a really rough rule of thumb, the allocation of the revenue generated can be 25% for the licensor and 75% for the licensee. This is because the licensee is usually doing all the sales and marketing related to generating revenue. It varies greatly from industry to industry.

Question: What are some examples of the types of works that can be licensed?

Many types of IP can be licensed. For example, copyright-protected works, trademarks, and patented inventions can be licensed. Materials and know-how may be licensed and generate additional income. Other examples include images, photographs, music, a recording on any kind of media.

Its very difficult to license something that has not been reduced to writing or some kind of tangible form. Just trying to license know-how, for instance, is very difficult. Someone could have a lot of expertise, but unless they turn it into something concrete or tangible, its difficult to license it.

Question: What are the pitfalls of licensing?

A classic pitfall is that the licensee does not pay royalties. The licensor gives rights to a licensee and the licensee doesnt do anything with them. So the licensors IP rights are tied up in the license agreement, but the licensor isnt getting any money for the IP. I recommend that a licensee be required to pay at least a minimum royalty or forfeit the license. That way, the licensor is guaranteed a certain level of revenue. Thats also motivating for licensees because theyre going to have to pay that money in order to keep the license, so theyre going to focus on using your IP.

Another pitfall is granting an exclusive license, or giving away way too many rights. The scope of the license grant is extremely important. For example, one situation that Im familiar with involved a patent for a chemical process. It was licensed to a very large pharmaceutical company. But in that license, we were very careful to limit it to medical applications. We turned around two years later and licensed that same patent to a paint company. Had we granted all the rights in the first license, we wouldnt have been able to do the second licensing agreement, which was a very different market and a very different application.

Question: What if I want to use someone elses work?

Using someone elses work is sometimes called licensing in. Thats a very good business strategy as well. Why recreate the wheel if you can use materials that are out there or content thats already been created? Usually, what I suggest is that you approach the owner of the IP and say, Id like permission to use some of your materials, and you negotiate an agreement.

Its OK to use other peoples works (without payment) if the work is in the public domain or if the use is considered to be within the fair use doctrine. (See enews archives for further discussion).

Question: What if someone copies my work?

Registering copyrights is an important step. If an infringement occurs after the copyright is registered, you can recover statutory damages per infringement and attorney fees. If an infringement occurs prior to registration, you can only recover actual damages, which are extremely difficult to prove.

Question: What is a territory?

Licensors try to specify territories for authorized use. Say, for instance, you have a way to fix cars and you were going to deliver a training program and it required on-site training to show people how to do this particular type of repair fix the paint or fix the dents. Thats a service that would probably be delivered in person, so it makes sense to carve that up geographically.

But, if you market on the Internet, its really hard to specify a geographic territory. For example, if youre developing an e-learning kind of program and it is going to be marketed over the Internet, then its very difficult to restrict geographies, just because you could have potential customers coming from anywhere in the world.

In conclusion, these are just a few of the frequently asked questions about licensing. Licensing is a great way to generate revenue from IP. Is licensing a strategy that you want to explore for your business?

Jean Sifleet is a practical and experienced business attorney whose career spans many years in large multi-national corporations and includes three successful entrepreneurial ventures. Jean has extensive experience in dealing with intellectual property matters in the large and small companies and as a small business owner. She has authored numerous books and publications on avoiding legal pitfalls in doing business. This article is excerpted from her new book, Advantage IP Profit from Your Great Ideas (Infinity 2005). For more information, Jean's website is http://www.smartfast.com.

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Horse Riding Exercises Circles and Bends

Every horse riding exercise is based on the circle exercise. Circles help the horse to be able to bend equally in each direction, and this also helps the horse maintain straightness.

Circles are a very important part of any dressage test - a dressage test at all levels will include combinations of circles of varying sizes, at different paces and in different parts of the arena.

When a horse walks a circle he bends his body to match the curvature of the circle - this is called the correct degree of bend. It is important when asking for a circle that the rider imagines a circle drawn on the ground, and tries to follow it. The horse must not lean to the outside and make the circle too wide, or drift in, and make the circle smaller. By practicing these bends the horse becomes more supple.

Most horses find one direction of bend easier than the other. These horse riding exercises are a great way to even up the horses muscles.

The first circle exercise you will be asked to do is a 20m circle. This basically splits the 40m arena into 2, with the start of the circle at letter A or C, as below, and the mid point of the circle crossing through the imaginary letter X in the centre.

A 15m circle should take you five metres inside of X. It is a tighter circle, and will ask for more bend from your horse.

The smaller circle is the 10m, which will use up one quarter of the arena.

The circle exercises can be performed anywhere in the school - you may be asked for a 20m from A, C, E or B. 20m circles from B or E will take you from one side of the school to the other.

In beginner lessons riders will usually ride a circle as a group, or the instructor will tell you which letter to start from. In more advanced lessons riders may be working in open file, and the instructor will ask all riders to work a circle wherever they choose. In these lessons it is important to remember your school etiquette, and if you are going large (riding round the outside of the arena) you should 'give way' to the horse and rider completing a circle, and let them back onto the track in front of you.

In your first lessons you will walk or trot circle horse riding exercises. Later on you will perform canter circles. This is an excellent way of improving your balance.

Circles in the Dressage Test

At the Preliminary level of dressage (level 1) you will need to show 20m circles in trot and canter, and half 10m circles in walk. At the advanced level you will need to show an 8m circle in collected canter. For more information on the movements at each level visit the Dressage page at http://www.limebrook.com/dressage.html

Trish Haill is the Webmaster for Limebrook Farm Riding School and Livery Yard. This ever growing website is a great resource for riders and horse lovers everywhere. Check out the site at http://www.limebrook.com

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RC Cars - Get Started

You have loved the radio controlled cars since you were a child. Or may be you liked the RC car you bought for your son and now you are he only one playing with it? No matter what your case is, one thing is true RC cars can be fun. Moreover this can turn into a real hobby.

If you want to turn the passion for RC cars into a hobby you should be prepared and consider everything before you go. Of course since it is a hobby you do not have deadlines and rules to comply with but still it is best to be informed for certain things in advance.

The first thing to take into account is the costs that your hobby will involve. While toy RC cars are not that expensive, the hobby models can cost a fortune. You will also have maintenance costs, costs for upgrading and customizing. Imagine a remote controlled car as a real car it has many parts and some of them need maintenance, other break and need to be replaced.

You may be wondering why RC cars are more expensive than the same toys. The reason being is that they are not toys. Hobby cars are made to resemble real vehicles; they have complex parts which are much more durable as well. Moreover the hobby cars are made in a way that you can easily upgrade r customize them which also increases the cost.

The next thing to worry about is the maintenance. You should be able to take care of your remote controlled vehicle. As with your real car you should be able to do some repairs and maintenance by yourself. If you really want to go into this, dedicate some time reading so that you learn how to keep your car in its top shape.

Finally allocate time for your hobby. As with any other side activity, RC cars require time. There is no point buying a great car if you never have the time to use it. You will also need to time to assemble it and time for maintenance and repairs. You will need time to learn how to operate it. Although it seems a piece of cake, it is not that easy. In some occasions it might turn out that you learned to drive your real car quicker than your RC car.

Additionally check if there are other people in your area keen on RC cars. This will bring you new friends and will defiantly make your life much more exiting. There are many RC cars competitions as well that you should start attending. Driving your car in your backyard is fun but imagine how the first place in a real competition will taste.

Keith Londrie II is a successful Webmaster and the owner and publisher of http://rc-mini-nitro-gas-electric-cars.info/ A website that specializes in providing tips on Radio Control Cars that you can research on the internet. Visit http://rc-mini-nitro-gas-electric-cars.info/ today!

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