Successful collaboration with licences

Licensing means that you give or receive permission to use a technique or product that is protected by intellectual property rights. The creator remains the owner. For example, someone may use the machine you designed, but the technique remains yours.

With a licence, the licensee receives permission from the licensor to:

• reproduce
• and/or sell
• and/or apply the invention.

Licences can be granted for any form of intellectual property right. Licensing can be done on patents, for example, but also on written text or images. As a writer or photographer, you can lend your material for use in return for payment. However, you remain the owner of your work.

Why work with licences?

Licences allow you to earn more money without entering a new market yourself. Someone else works in that new market and takes the risks. You earn money because you are the owner of the technology. You share the profits according to the contract.

Another advantage is that you retain control over your invention and how it is used. When you sell the invention, you no longer have that control. A licensee has more freedom to decide how to sell the product than an agent who works directly for you.

A disadvantage may be that you make less profit than if you sold the product yourself. The behaviour of your licensees can also influence your business. This can be positive, but also negative.

Whether licensing has more advantages than disadvantages depends on the situation. Jean Pierre Raes, owner of creative studio Apollo 11, uses licences for the FOOOTY, a foldable football. Apollo 11 sells this football itself in various countries, but also works with an international licensing partner. This partner sells the football for promotional purposes, for example with a company logo on it.

‘It gives us the opportunity to enter large markets and countries more easily through our licensing partner. They are a reliable party that also supports their customers. That means less work for us.’ For Apollo 11, these advantages outweigh the disadvantage of lower profits.

Would you like to know what you can include in a licence agreement and what you can do if you want to terminate the partnership? Then read our Tips for drawing up a good licence agreement.

How to find licencep artners

The Databank Octrooilicenties (patent licence database, in Dutch) is a digital marketplace run by RVO Netherlands Patent Office. It brings together supply and demand for protected technology. You can see what other businesses are asking for or offering and you can present your own design.

Another way to find partners is through the Enterprise Europe Network (EEN). Through this network, you can search for potential international partners via affiliated parties – such as RVO in the Netherlands – using a partner profile. Advisers will help you create a compelling profile.

Check, check, double-check

Have you found a good customer? Always check whether the business and entrepreneur are who they say they are. And whether the promises they make are realistic. Also check whether the business is registered with the (local) KVK. And whether the person with whom you want to conclude a contract is authorised to sign? 

Patent adviser Karen Kraan-Sam (RVO) warns against giving too much away to potential partners in your enthusiasm: ‘You often find yourself in a conflict of interest. You are enthusiastic about a collaboration, but at the same time you don't want to reveal your trade secrets right away.’

It is also wise to conduct a book review. This is also known as “due diligence”. It will give you more insight into your potential collaboration partner and their financial situation. Make sure you do not infringe on existing contracts or existing intellectual property rights.

Collaborating with knowledge institutions

Do you want to use existing technology for your business? Then consider universities and other knowledge institutions. They have a wealth of knowledge that they do not always market themselves. The process by which a business markets the knowledge or technology of a knowledge institution is called valorisation.

Hans Brouwer has extensive experience with valorisation. He brings technology from knowledge institutions to market with various businesses. One of those businesses is Optics 11, which developed a nanosensor (in Dutch) for scientific measuring equipment. The Vrije Universiteit Amsterdam developed the patented technology. Optics11 now markets it under an exclusive licence.

Brouwer: ‘An invention is only 1% of the road to success. More than half of university inventions never get off the ground. That is precisely why we see opportunities for collaboration. Because we are good at bringing a product to market. Often there is no existing market, but you have to create one.’

Collaboration: more than a contract

Licensing is not just a legal collaboration, both Brouwer and Raes emphasise. Brouwer: ‘When it comes to valorisation, it is important to really collaborate with the researchers who generated the knowledge. The best thing is to do this for a longer period of time, at least four to five years.’

Raes: "Trust is really essential. We don't just go into business with the first person who comes along. You have to prepare well for a collaboration and investigate who you are going to do business with. We met our licence partner at a trade fair. After researching them and getting to know them better, we decided to work with them. But you also have to be able to say no if that trust is lacking. Maintaining the relationship is also important. We meet every quarter and provide our partners with information in a timely manner.”

In the more than 20 partnerships he has set up, Brouwer has almost never had to deal with conflicts: ‘We have never terminated a licence because of a conflict. We only stopped once because an invention did not work in the market. It's always about chemistry between people. If that's not there, you shouldn't continue working together anyway. After all, you want to enjoy working together.’