Home Startup & Entrepreneurship Five ways to commercialise your intellectual property (and make the big bucks)

Five ways to commercialise your intellectual property (and make the big bucks)


The first step to making big bucks from your IP is to obtain the appropriate protection. Once that’s done, it’s time to reap the rewards from your hard work and sheer brilliance.

And remember: none of this information should be construed as legal advice. Always seek out a qualified professional in relation to your own circumstances.

1. Questions, questions, questions

There’s no right or wrong method to commercialise your IP. However, the route you choose must account for your individual circumstances. Before you embark upon a path, ask yourself some, if not all, of the following questions:

  • Do you want to fly solo with commercialising your IP? Do you have the finances to do so? If not, then you’ll need to consider finding a source of finance.
  • Are you trying to manufacture a product? Are you able to do this with the resources available to you or will you need to outsource the process?
  • Do you want to commercialise locally or internationally?
  • Do you understand the market that you’re trying to enter? Do you need a board of advisers to assist you in return for a share of the profits?
  • What’s your business strategy?
  • What are the tax consequences of each commercialisation option?

2. License to license

If you have a brilliant product but no funds to manufacture it, one option is to license it to another party. A license is a contract whereby the licensee (the other party) will commercialise your IP in return for a fee payable to the licensor (you).

Licenses are a fairly common arrangement and the type of license entered into will depend on your business strategy, plus the requirements and bargaining position of both parties.

For example, you may want to enter into a non-exclusive license as this will allow you to license your IP to several parties.

However, your potential licensee may insist upon an exclusive license. If they’re the best option for getting your product out to your target market, you may have to agree to their requirements.

3. Receive a fee from a franchisee

Your business is up and running and you’re looking to expand your brand and territory. Only problem is, you don’t have the capital to do so. What do you do?

One option is to franchise your IP to others (the franchisee). In a franchising arrangement, the franchisor (you) retains ownership of your IP (trademarks, business system etc) and the franchisee pays you a fee in return for their ability to use it. The franchisee benefits by being able to operate a business under an established brand with established business and marketing models.

Many chain stores operate under a franchise system. For example, Dymocks book stores and Subway restaurants.

4. Assigning your IP

Assigning your IP is another option in the commercialisation process. An assignment is a transfer of the ownership of IP to the assignee.

5. Where to from here?

Before you make a decision regarding your IP, consult appropriate advisors including your lawyer and accountant.

Commercialisation of IP can be a complex process and it’s recommended you consult someone with expertise in the particular area of interest.

This option may suit you if, for example, you’re an inventor of a product, you don’t have the resources to manufacture the product, you don’t want the stress of attempting to license or otherwise commercialise your product, or you’d prefer an up-front lump sum.

Devita Pathi is an intellectual property lawyer and trade mark attorney. She has over 7 years experience in the legal profession. She is the author of numerous articles including an award-winning article on copyright and design laws. Devita has a particular interest in assisting small and start-up businesses to identify, protect and commercialise their intellectual property.