How Your IP Counsel Can Help Leverage Your IP Portfolio Part 2
In the first part of this two-part series, we discussed how your IP legal counsel is a crucial partner in executing your company’s strategy for leveraging and monetizing your intellectual property portfolio. We highlighted three key areas where they play a vital role: assessing the value of your IP, ensuring that commercialization is secure, and arranging licensure and sale of your IP to resolve infringement disputes, among other things.
In this installment, we consider the benefits of partnerships and joint development agreements for advancing and commercializing new products or technologies. We’ll highlight how startups and small companies can leverage partnerships with larger, established companies to access resources and markets they may not have on their own. The article also emphasizes the importance of having a strong IP strategy in attracting venture capital or private equity investment, and in positioning for IPO or M&A. Working closely with your IP counsel ensures that your assets are properly protected and valued, and that IP-related agreements are well-defined to maximize their fiscal potential.
Partnerships & Joint Development Agreements
Joint development agreements (JDAs) and partnerships are two types of agreements that allow parties to collaborate in developing and commercializing a new product or technology. By partnering with other companies or individuals, you can leverage your existing IP assets to develop new products and access new markets, while sharing the costs and risks involved in the product development process.
JDAs are contracts between two or more parties that agree to develop a technology or product together and can be a win-win situation for both parties. Likewise, partnerships can be mutually beneficial agreements, but are often broader in scope, involving a range of activities such as joint ventures, collaborations, or strategic alliances. A partnership can allow for a deeper integration of IP, resources, and expertise to create a new product or service. In some cases, partnerships may involve cross-licensing agreements where both parties exchange IP rights.
Partnerships and JDAs can be particularly beneficial for startups and small companies that may not have the resources to develop a new technology or enter a new market on their own, but companies of all sizes can benefit as well – leveraging the technological development of others and gaining access to resources such as manufacturing facilities and distribution channels.
When entering into a partnership or JDA, your IP counsel will work to put clear agreements in place to define the terms, roles, and responsibilities of each party. This includes defining the ownership and use of IP rights, how revenue will be shared, and how disputes will be resolved. They can help ensure that the rights to the jointly developed IP are properly allocated between the parties, and that each party has the necessary rights to use the other party’s existing IP. In addition, IP counsel can help identify the IP assets that each party brings to the partnership or JDA and assist in valuing those assets.
Attract VC or Private Equity Investment
When presenting your business to venture capital or private equity investors, it’s crucial to have a compelling story that outlines how their investment will be used to expand and generate returns. Investors seek companies with a unique and defensible IP portfolio that can create a sustainable competitive advantage. This can position your company as an attractive opportunity, leading to better terms during investment rounds and improving your chances of a successful exit through IPO or acquisition.
An active protection strategy for your IP portfolio can increase the overall valuation of your company. This, in turn, can boost investor confidence and lead to more significant investments to drive growth and bring products or services to market.
Working with your IP counsel to develop a comprehensive IP strategy that aligns with your business goals can help ensure your IP portfolio is viewed as valuable assets by potential investors.
Licensing & Selling Intellectual Property Assets
Companies often have a significant number of unused or under-leveraged patents or trademarks in their portfolio which can be transformed into streams of revenue.
In a licensing agreement, your company retains ownership of the IP while an outside party is free to use the asset to develop, manufacture, and sell their own products. The licensee pays royalties to you over a specified term, either as a fixed amount or a percentage of the revenue they generate using your technology or your brand. These agreements can be exclusive or non-exclusive, allowing you to generate multiple streams of revenue from one asset.
Selling your IP requires identifying potential buyers, negotiating terms, and enforcing obligations over the term of the sale. This can be a complex process and requires active engagement from expert IP counsel to navigate.
Licensing and sale opportunities may arise when a competitor or other outside party infringes on your intellectual property rights. Instead of heading straight to litigation, your IP counsel could attempt to strike a licensing deal to avoid an infringement lawsuit. Even in the case of litigation, licensing agreements are often part of a settlement outcome. In any event, both parties stand to benefit monetarily when they recognize their mutual interest.
Engaging your IP legal counsel to develop a comprehensive IP strategy that aligns with your business goals can help ensure your IP portfolio is viewed as valuable assets by potential investors, development partners, and the marketplace as a whole. Leveraging your IP portfolio can create new revenue streams, drive growth, and build a competitive advantage in the marketplace for your innovation company.
This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. The opinions expressed in this article are those of the author only and are not necessarily shared by Dilworth IP, its other attorneys, agents, or staff, or its clients.