Have you developed a new product or an innovative technology? Or have you, for example, created a unique photo or text? Then you can grant a licence to someone to make, use, or publish that product or service. This allows you to earn extra money from your creation.
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What is a licence?
A licence is an agreement with which you give a company or person permission to use your creation. This is subject to conditions you choose. The agreement can be verbal or in writing. When you grant a licence, you remain the owner of your creation. In exchange, you can ask for a fee. For example, a percentage of the profits (royalties).
What can you use a licence for?
Licences are for products, services, or creations that are protected by intellectual property rights (IP rights). For example, protected by a patent, copyright, or design right.
With a licence, you give someone permission to:
- Produce, use, or sell a product or service that you have patented.
- Publish any type of creative work for which you hold copyright. For example, a photo, text, software, drawing, or film.
- Reproduce a design that you have registered in the designs register.
- Use a trademark that you have registered in the trademarks register.
- Grow plants of a variety for which you have plant breeders' rights.
Types of licences
There are different types of licences, such as:
- An exclusive licence for one person or business.
- A licence for several persons or businesses.
- An open licence for anyone who meets your conditions. For example, a Creative Commons licence.
You can also grant a licence for a specific country, or for a specific use.
Advantages and disadvantages of licences
Advantages of licences include:
- Profit more from your work without working extra yourself.
- Expand the market for your product. For example, by licensing to international partners.
- Increase awareness of your brand by letting others use it.
- Decide what else to do with your product, service, or brand. You remain the owner.
Disadvantages of licences include:
- Part of the profit goes to the licensee. You could possibly earn more by selling the product yourself.
- You are dependent on the success of the licensee. If they sell less, you earn less. If they have a bad reputation, your product or brand may also suffer.
- The licensee’s objectives and interests can differ from yours.
Before you grant a licence, take time to research the licensee and come to a proper agreement. If it relates to a product or service for which you hold a patent, also consider alternatives to a licence.
Find a licensing partner
There are many ways to find a licensing partner or licensee. For example, by networking, advertising, or joining a trade mission (in Dutch).
Do you want to license a product or service for which you hold a patent? You can offer your patent for licensing through the Enterprise Europe Network (EEN). This a networking and matchmaking organisation active in over 60 countries. The service is free of charge. You can also look for licensing partners yourself. For example, by searching patent databases.
Entering into a licence agreement
If you have found a licensee, it is often worthwhile to enter into a licence agreement. This contract may include agreements about:
- What the licensee can and cannot do with your product.
- What fee you will receive for this.
- What happens if someone else copies the product without permission.
Read the Netherlands Enterprise Agency’s (RVO) tips on licence agreements. These tips are mainly about licences for patents, but most also apply to products protected by other IP rights. Are you a member of a professional or trade association? If yes, you may be able to get an example of a licence agreement through that association.