Whatever your business is, you’re likely to run into the issue of Intellectual Property Management at some point. Whether you have designed an innovative new idea, or simply need to license someone else’s system, having a good understanding of the principles underlying intellectual property licensing is important for your business.

Keep Records

This is especially important if the technology is yours: if your livelihood is in licensing software you have invented and written, for example, allowing an agreement to lapse and not enforcing it is a potentially catastrophic loss of revenue for you. It also sets a bad precedent: if you do not enforce the use of correct licensing for your products you run the risk of others recognising there will be no repercussions and using them for free as well.

Less seriously for the long term, but still inconvenient, if you are licensing software for example, and your agreement lapses, you may find yourself liable for fees and penalties. Even if paid promptly, this could endanger your relationship with person you are licensing some key software from.

Having a shared archive of agreement documents allows you not just to keep on top of your licensing agreements, but will also help demonstrate a good history of compliance when needed.

Get the Right Contract

While any licensing agreement is an enforceable legal contract, you’ll be safer if you’re using the right one.

Make sure you take legal advice (if you don’t have an in-house lawyer to handle this for you – unlikely, at least in your early years), to ensure you are signing to the right kind of agreement. A Technology License Agreement does not cover the same ground as a Copyright License Agreement and will not protect you as well if you aren’t licensing technology.

Negotiate Sensitively

Negotiating a license isn’t a one off deal. You’ll be collaborating with the businesses you license to, potentially providing support as well over the course of months or years, and hoping they will choose to extend or expand their contracts into the future.

Being too cut-throat in your negotiations could sour this ongoing relationship. Be as flexible as you can in, for example, your discussions of exclusivity. It may be worth sacrificing an exclusivity cause to build a better relationship with your new partner.

If you can build a strong working relationship with your first licensees, you can rely on referrals and recommendations from them in the months to come.