How to increase the ROI of intellectual property through licensing
Have you ever asked yourself how to maximize the ROI for intellectual property? Well, to answer that question, we are going to take you just a little way outside your comfort zone. Licensing is one of the best strategies for getting the most out of your investment in R&D+i. Here, we explain how you can get a better return on investment.
Strategies for improving the return on investment of IP
You can focus on four different ways to do this.
1. Find new uses
If you have developed a particular technology, that innovation can almost certainly be applied to other fields or workspaces. Not necessarily in the same sector.
This is a strategy that most companies tend to ignore. Some of the greatest opportunities for a company’s intellectual property can be found outside their main markets or sectors.
For example, many uses are being found for robotics in modern medicine and surgery. And big data is being used by security companies, and even by governments. So, you can try to diversify your discovery to cover areas for which it was not, in principle, originally designed.
In today’s global economy, an innovation already amortized in your sector can be very valuable to companies in other markets or industries.
- Use licensing with your competitors
Also, strategically speaking, there are industries that license their technology to competitors with the sole aim of speeding up its adoption by the market, which, in turn substantially speeds up the return on investment. This is a way to continue to use your advances for your own benefit whilst, at the same time, profiting from them as they are introduced into industry.
3. Seek out investors
A significant portion of intellectual property is indeed financed by the investors that you might find. According to the OECD, high-quality industrial and intellectual property encourages investors to invest more and to make that decision more quickly.
So, you have to give your idea a marketable twist, focus on one clear use, specify a series of sectors in which it can work and bring in revenue, and, lastly, plan out just how you are going to develop this project.
By doing this, investors can see that the project is viable and will positively evaluate the idea of giving it financial backing so that it can continue to grow and be developed. So, you can get some particularly useful funding if you think about this while the project is in the early stages, while it is still in the incubator.
- Reduce production risks
Let’s suppose that your team is developing a really useful innovation, but it requires a great deal of preparation in terms of materials and a lot of funding before it can be implemented. However useful an invention or advance may be, this does not guarantee that it is going to be well received by the markets, or that it is going to bring a return on investment as intellectual property.
However, licensing it or subcontracting it to companies with more infrastructure so that they can develop your idea is a relatively efficient way of not running unnecessary risks, reducing time to market, and generating income sooner, especially in the case of foreign markets.
In conclusion, to get a greater ROI from intellectual property you need to diversify and to work in different fields. Licensing uses the value of your intellectual property to generate constant revenue from new markets or applications, it turns your competitors into partners, it reduces the risk of litigation, and it helps you expand internationally without the financial risks.