The licensing process

Five key steps

The licensing process can be summarised in five key steps:

1. IDENTIFY

Carry out thorough market research to identify suitable licensee companies.

2. PROMOTE

Generate marketing materials for approaching potential licensees.

3. INVESTIGATE

Undertake a process of due diligence on potential licensee companies to demonstrate that it has the necessary resources and expertise to fully exploit the technology.

4. AGREE

Negotiate fair and reasonable commercial terms and conditions in any licence agreements to license the technology to an interested company.

5. MANAGE

Provide post-licence administration including revenue distribution.

Issues in deciding whether to license

Here are some of the key issues to think about when considering whether to license the technology to an existing and market-established company:

• Is a company already linked with the research, possibly via a collaborative research agreement, may have first options on licensing?
• Is the technology sufficiently proven to interest licensees?
• Are there significant barriers to a new company entering the market?
• Does the marketplace comprise a small number of large companies?
• Are the applications of the technology well understood and demonstrated?
• Is the technology complementary to an existing company's IP/product portfolio or potentially disruptive?
• Does transfer of the technology require significant know-how and time from the inventors?

Why license a technology?

Licensing can be a very beneficial route to market. It enables technologies to be taken to market with the expertise and resources of an already established company and still provides revenue for the inventor(s).

Finally, licensing can increase adoption of new technologies. When a technology fits a company’s product range its existing client base can be accessed immediately and good links with customers are established.