Successful collaboration with licences

Licencing means giving or receiving permission to use technology or a product that is protected by intellectual property. The creator remains the owner. For example, someone may use the machine you designed, but the technology remains yours.

With a licence, the licensee (the user) gets permission from the licencer (the owner, creator) to:

• copy or recreate the invention;
• and/or to sell the invention;
• and/or to apply the invention.

You can license any form of intellectual property. Licencing can be done on patents, for example, but also written text or images. As a writer or photographer, you can lend your material for use against payment. But you remain the owner of your work.

Why work with licences?

With licences, you can make money without having to enter a new market yourself. Someone else works in that new market and takes the risks. You make money because you own the technology. You share the profits according to the contract.

Another advantage is that you keep control over your invention and how it is applied. When you sell the invention, you no longer have that control. A licensee does have more freedom to decide how to sell the product than an agent working directly for you.

A disadvantage may be that you make less profit than if you sell the product yourself. Also, the conduct of your licensees can affect your business. This can be positive, but also negative.

Whether licencing has more advantages than disadvantages depends on the situation. Jean Pierre Raes, owner of creative studio Apollo 11, uses licences for the FOOOTY, a folding football. Apollo 11 sells this football in several countries, but also works with an international licencing partner. This partner sells the football for promotion, for example, with their own company logo on it.

“Through our licencing partner we can get introduced to big parties and big countries more easily. It is a reliable partner that also guides their buyers. That means less work for us.” For Apollo 11, these benefits outweigh the downside of lower profits.

Want to know about what to put in a licencing contract and how to end a partnership? Then also read our Tips for making a good licencing contract.

How to find licencing partners

The Patent Databases and registers is a digital marketplace of Octrooicentrum Nederland, a department of The Netherlands Enterprise Agency (RVO). This is where supply and demand for protected technology meet. Here you can see what businesses are asking or offering and you can present your own design.

Another way to find partners is via the Enterprise Europe Network (EEN). Through this network and its affiliated parties – such as the Netherlands Enterprise Agency (RVO) – you can search for potential international cooperation partners, using a partner profile. Advisers will help you draw up a profile.

Check, check, double check

Have you found a buyer? Always check if the business and entrepreneur are indeed who they say they are. And whether the promises they make are realistic. Also, check right away whether the business is registered with the Netherlands Chamber of Commerce, or local equivalent. And whether the person you want to conclude a contract with is authorised to sign.

Patent adviser Karen Kraan-Sam of RVO warns against giving away too much information to potential partners in your enthusiasm: “It is often a careful balance. You are enthusiastic about a collaboration, but at the same time you do not want to reveal your trade secrets straight away.”

Doing research is also advisable. This is called due diligence. It will give you more insight into your potential collaboration partner and how they are doing financially. Make sure you do not infringe on existing contracts or existing intellectual property rights.

Cooperation with research or educational institutions

As an entrepreneur, do you want to use a technology that already exists? Then consider universities and other research institutions. There is a lot of knowledge there, which the institutions do not always market themselves. The process by which a business brings the knowledge or technology of an educational institution to the market is called valorisation.

Hans Brouwer has a lot of experience with valorisation. With several businesses, he brings technology from research institutions to the market. One of these businesses is Optics 11, which developed a nano sensor for scientific measuring equipment. Vrije Universiteit Amsterdam developed the patented technology. Optics 11 is now marketing it under an exclusive licence.

Brouwer: “An invention is only 1% of the road to success. More than half of university inventions do not get off the ground. This is why we see opportunities for cooperation. Because we are good at bringing a product to market. Often there is not even an existing market, but we have to create one.”

Working together: more than a contract

Licencing is not just a legal collaboration, both Brouwer and Raes emphasise. Brouwer: “With valorisation, it is important to really cooperate with the researchers who have the knowledge. And preferably for a longer period, at least 4 to 5 years.”

Raes: “Trust is key. We do not take the plunge with the first person who comes along. You have to prepare a collaboration well. And you research who you are going to do business with. We met our licencing partner at a trade fair. After researching and getting to know them further, we decided to go into business with them. But you also have to be able to say no if trust is lacking. In addition, maintaining the relationship is important. We get together every quarter and give our partners timely information.”

In the more than 20 collaborations he has set up, Brouwer has almost never encountered conflicts: “We have never terminated a licence because of a conflict. We only stopped once because an invention turned out not to work in the market. It is always about chemistry between people. If it is not there, you should not continue. After all, you also want to enjoy working together.”