If you’re the creative soul behind a concept destined for success, turn off the right side of your brain for a little while and think analytically about reaching folks who can run with your idea. One of the best ways to do this is by licensing your intellectual property. You retain artistic control while leaving the job of finding markets to the guys who do it best.
Design the product or idea, and protect your intellectual property by filing for a copyright or patent. Some licensees will handle this for you, but to be in control from the moment you start this process, it’s worth the time and money you’ll spend filing these papers on your own. Use a lawyer if your budget can take the hit or avail yourself of the services of a credible Internet legal service like LegalZoom.com.
Find the right licensee. Assume, for example, you’ve come up with an innovative children’s game that not only entertains but it also builds character. You’ve got the board and the instructions down pat and you’ve even made a model and tested it on lots of kids. Sourcing production both domestically and abroad has proven outrageously expensive, so it’s time to research companies that make games for the age group your product targets.
Approach multiple potential licensees to determine which best fits your product or idea. Take your prototype to regional trade shows where manufacturers exhibit new products, but don’t expect to engage sales personnel for lengthy amounts of time, as they're on hand to sell new merchandise to retailers. Instead, collect the names of people at each company who are responsible for developing new products or handle licensing agreements.
Make a list of what you want from a licensing agreement before you book your first appointment. You may wish to have a final say on advertising avenues, retail shelf placement, control over colors and materials or your name on packaging and ads. Every licensor has a specific list of criteria for which there’s no compromise, so think hard while creating yours. Investigate standard royalty fees in your area so there are no surprises once you find a licensee.
Meet with company representatives. Ask them to sign a confidentiality agreement before you begin your pitch. Nondisclosure statements offer some peace of mind, but they’re not guarantees that your idea won’t be ripped off. Make your presentation succinct, supplying facts, figures, prototypes and production costs so everyone’s on the same page. Trot out the features and benefits of your product that sets it apart from all others.
Hire an attorney to vet the licensing contract you’re offered once your product finds a home. Ask the attorney to compare the legal contract language to the list of demands you made when you wrapped up your discussions. A great intellectual property attorney will make certain you come out of this arrangement with the right royalty fee and enough enthusiasm to think about coming up with another product now that you’ve been baptized.