Copyright Licensing for Software Coders and Consultants

Licensing...for coders & consultants

This article is a companion to our podcast – Your Business Ally™. Please check out the Coders, Consultants and Content episode, and companion post – Copyrights for Business.

Licensing for Coders – Custom Software, White Labeling & SaaS

Hello, my brilliant friends who turn 0s and 1s into algorithms that reveal the perfect gift on Amazon, or make that little Echo box recite this week's weather on demand. The nerd in me salutes the nerd in you.

Let’s dive into three key ways to use your coding talents for good, and be paid well for it. Of course, you're familiar with Custom Development, White Labeling, OEM, and SaaS models. But do you know the most important negotiation point to help avoid leaving money on the table and inadvertently giving away your value? No worries. I've got you covered, Allies.

As you well know, Custom Software is uniquely designed to meet a defined customer need. When there are no “off the shelf” options, customers will pay for software that provides a unique solution. Because of its bespoke nature, you'll want to price appropriately for the time and unique nature of that customized deliverable.

By contrast to that single-use, or one-off product, you might gain more economy through White Labeling. In this scenario, you create the backend software that's presented under another party's brand, perhaps integrated into a larger program.

Your customer looks brilliant by delivering your incredibly elegant code under their brand, and they save the costs and oversight of having an in-house team of programmers. In turn, you gain scale through repeated use of your software, ideally with far less work than potentially reinventing the wheel via a custom software project. It's a win-win.

Finally, the strategy of recent popularity is “software as a service”. SaaS platforms have disrupted the historical model of software delivery. Whereas we used to, in the ancient ages, download software from disks or CDs, now it's efficiently delivered through the cloud.

Of course, the upside for customers is we receive consistent feature improvements. The profit play for SaaS providers is consistent cashflow through recurring subscription revenue. We see the SaaS concept at play in Microsoft’s Office 365 suite, for example, where for a monthly fee we receive regular updates to Word, PowerPoint, OneNote, and Excel.

Don’t Give Away Your Ownership Rights!

With Customized Software, clients might request “Work for Hire” terms. Legally, this means you're agreeing that you do not own the software that you create. Instead, from the moment you save that code, your client owns it. As long as you're being paid appropriately, this may be fine. Again, it's bespoke work for which you're ideally receiving a premium price.

But what if you didn't agree to Work for Hire terms? What if, for example, you'd like to use that same code, or elements of it, to develop custom projects for other clients? Or, suppose you want to use it for White Label or SaaS products?

Now we're thinking about scale. Reusing that custom software in another format is a derivative work. (We discussed those more in our companion article, Copyrights for Business.) In fact, retaining ownership of your code in its various formats is a key principle of building intellectual property assets in your software company. That way, you can reuse your programs in new ways, and generate greater revenue.

Allies, please don't inadvertently give away your software through agreeing to “Work for Hire” terms! By maintaining ownership of your code, your business has more value, is more attractive to investors, and is more likely to sell at a higher multiple.

Pricing & Fortune 500 License Negotiations

Returning to pricing, if you're creating a bespoke customized program, you can charge a premium because it's a unique, possibly single-use development. But let's rethink this. There's room to both charge a premium because of the unique value that you deliver to your client, and retain your rights in the program. How? By issuing that client a license, rather than agreeing to Work for Hire terms where, again, you're giving them ownership of your code.

If you punch above your weight, and work with Fortune 500 clients, you know that many of their standard contracts require Work for Hire terms. Of course they do! They’re expecting you not to negotiate. In fact, they may expect that you won't even read the contract.

A little secret, Allies, many times the lawyers who drafted that contract are not IP lawyers. So, they don't know that it's not necessary to require those Work for Hire terms in their standard agreement. But I do. And now, so to you. It's all a matter of negotiation.

Software Licensing Value Ladder

So, let's consider this scenario. First, you create custom software to meet a unique client's needs. Because it's customized, you charge a premium and do not agree to Work for Hire terms. Instead, you retain ownership in the work, and they get a perpetual license. Second, you create less bespoke versions of that code for White Label use, perhaps tweaked but not wholly reinvented. That pricing aligns to White Label value propositions.

Third, you apply the code to develop a SaaS product for sale to masses at scale. This is the opposite of customized software. It's “off the shelf”, commoditized delivery for margin based on volume. Your SaaS sells at a lower price point than the bespoke deliverables for that premium client at the beginning of the value chain.

All three scenarios are licenses, including the Customized Software, White Label, and SaaS. And you, my dear Ally, made money at every level. You can choose all three, or you can choose one or two. In fact, it might be rather tough to deliver in all three models, so you'll likely choose one that aligns best to your business goals.

Ultimately, it's worth understanding all three options. And importantly, refusing Work for Hire terms is critical to maintaining your copyright as an asset in the code you create. That way, you have the greatest latitude to generate residual IP licensing revenue from your investment.

Licensing for Consultants and Strategists

Much of what we've already discussed for Coders relates directly to Consultants and Strategists. Rather than licensing code, you license expertise, and the content that flows from it.

Let's say you're engaged to help coach an executive leadership team, and develop related business strategy. You devise a plan based on your experience. As with the bespoke software discussed before, you're creating unique, customized deliverables like training materials. That content might include assessments, workbooks, or frameworks.

Of course, once you perform with expert level aplomb and have extraordinary bottom-line impact, that executive team is going to be immensely grateful, and extol your value. What's next? I could imagine that they'd love to distribute your training resources at scale within their broader leadership development program. And there, dear Allies, is an opportunity for new revenue!

Before you agree to allow your training materials to be reproduced and distributed for free, perhaps even “White Labeled” among other company resources, let's consider how you might instead license those resources resulting in a win-win for both you and the client.

They want a proven, quality training and development program, but they may not have the budget to engage you to deliver one-on-one coaching to more junior executives. And frankly, you might not want to do that level of work one-on-one. However, through licensing your work, again, without ever agreeing to a Work for Hire contract provision, then you can earn additional revenue - and even annual profit - from your earlier trainings.

Perhaps, each year you update that content. Or, maybe you establish a license deal whereby you create new content and share it with the client throughout that annual term, so that they receive additional ongoing value. With that, we’ve moved from a finite license to a subscription license. Either way we negotiate the deal, you have more potential for revenue than if you'd simply agreed to allow that client to reuse your trainings for free.

MSAs and Licenses Are Different Revenue Streams

A content license is different than the MSA that you may normally enter with your clients. An MSA, or Master Services Agreement, includes the work scope for the original executive-level strategy and coaching. It's your vehicle for new work scopes and change orders, as those service deliverables may evolve from time to time.

By contrast, a license is the tool through which you permit that client to use your content. Within a license, you'll establish pricing, number of permitted users, exclusivity vs non-exclusivity, and identify allowed channels of use (online vs print, or both). You'll also set up geographic territories and determined timeframes for license renewal. Each of those are points of negotiation, and potentially additional revenue sources.

For example, you might permit your client to have unlimited access to view your training materials online, but no rights to make physical or digital copies. You might permit the use of your trainings within a parent company, but not with their subsidiaries or affiliates. Or, you might limit the license to one year so that they recognize the value in your original content, and then you can create newer additional materials that have value in future years. With that last strategy, the client is enticed to renew their license, possibly at more favorable pricing for your business now that your value is well established.

All of this is possible because you did not agree to Work for Hire terms, but instead maintained ownership and control over your content. By the way, we discussed different types of licensing negotiation variables in Episode 4 called Untapped Income: IP Licensing for Midsize Companies.

When to Register a Copyright

Here's an Assure ™ Action

It's a very good idea to file applications for copyright registration for any content in these situations:

1. If you'll use that content repeatedly in your consulting engagements, because it's a core staple related to your service delivery.

2. If you expect to license the content, as we discussed above.

3. If you anticipate that your content might be used without your consent, and you want to improve positioning to enforce your rights against an infringer.

It's best to file that application for copyright registration before you either present the content to any client, or otherwise share it publicly.

Here are a couple of helpful links for copyright registration in the United States.

• US Copyright Office

• US Copyright Registration Fees

Content Licensing Value Ladder

Imagine that you've had great success licensing content to your clients. Now, let's take it up a notch. Suppose that you have so many clients and prospects who see the value in your strategy, frameworks, and training materials that you don't have capacity to serve them all.

Take a page from the book of our Coder friends who sell SaaS at scale, you could do the same by teaching an online course. Create it once, deliver it through the cloud on a multiple delivery platform like Teachable, Udemy, or Thinkific. Each person who takes your course then pays you a licensing fee through one of those platforms. And, by making your content available online, you've created additional residual licensing income.

You're so brilliant, Allies! Now go tell your Coder and Consultant friends to listen to the Coder, Consultants and Content episode of the Your Business Ally podcast, so they can be experts too.

Quick Recap

• For Coders, copyrights are Customized Software, as well as the programming that underlies White Label and SaaS models.

• For Consultants, copyrights might include training materials, videos, and other business content.

• Plan in advance to earn residual income through derivative work licensing ladders. For Coders, that may be redeploying programs in stages from Customized Software, White Label, and scaled volume SaaS delivery. For Consultants, bespoke trainings can be scaled for license in the formats of video, physical and digital training materials, as well as online courses. All of those resources can be licensed individually, or through ongoing content subscription models.

• The key to maintaining copyright ownership that can generate residual income and grow your company's value, is actively avoiding Work for Hire contract terms.

Here's an Assure ™ Action.

Consider how you're delivering code or distributing consulting expertise today. Take a moment to strategize new licensing models, whether directly to individual clients, or at scale to multiple customers.

Need some help? Let’s collaborate!

We help 7 and 8 figure companies build recurring revenue through licensing successful brands, software, expertise, and business content. Our Assure Architect™ strategy framework identifies what to license, highlights target customers, develops pricing models, and establishes a go-to market sales plan. It's easy to get started. Reach out to us via our website. Or, connect with me, JoAnn Holmes, directly on LinkedIn.

Thanks for sharing the podcast, and for your kind ratings and reviews. If you haven't yet, please subscribe in your podcast app right now, so you don't miss any other great content from Your Business Ally™.

We always appreciate your support, Allies. Until next time, Set Your Agenda, and Here's to Your Success!

______________

JoAnn Holmes ("Jo") is the founder of HOLMES@LAW. The firm helps innovative midsize companies grow recurring intellectual property revenue, negotiate successful business contracts, and implement profitable legal strategy. Learn more about our Assure™ strategy services to monetize IP, establish a sound legal foundation, and streamline smart business decisions. Our Business Ally™ contract subscriptions help clients stop leaving money on the table, and protect your bottom line.

Holmes, How … about the Disclaimers?

Information shared by JoAnn Holmes and/or HOLMES@LAW, LLC ("We or Us") is for educational purposes only. It is not legal advice. Each situation is unique, so the information We share may not be relevant to your circumstance. Until you enter a formal engagement agreement with Us, We are not your legal counsel, and no attorney-client relationship exists. So, please do not share any confidential information with Us, and please only interact with Us if you agree to these ground rules. Thanks!

© 2020 HOLMES@LAW, LLC. All Rights Reserved.

Copyrights for Business

What's a Business Copyright?

This article is a companion to our podcast – Your Business Ally™. Please check out the Coders, Consultants and Content episode, and companion post - Copyright Licensing for Software Coders and Consultants.

What is a Copyright?

Formally, a copyright is an original, creative work in a fixed medium. In more pragmatic terms, there are two key types, creative copyrights and business copyrights.

• Creative copyrights are things like songs, movies, videos, photos, and artwork.

• Business copyrights include software programs, online courses, training materials, website content, and architectural designs.

We'll include examples of both creative and business copyrights in this article, but for your revenue purposes, give some thought to how you might focus on your valuable business copyrights.

Copyright Does Not Protect Ideas

Copyrights must be memorialized in a “fixed format”. For example, if you sit down at a piano and play a beautiful song as the notes come to you, that piece of music is not protected by copyright. However, if you play that same song, and record it on your smartphone, then it is protected by copyright immediately because now it's in a fixed format. That is an example of a creative copyright.

Here's one from a business context. Let's say you're a consultant providing training. You extemporaneously deliver the most brilliant presentation of all time, based on years of accumulated knowledge. Your audience is wowed. They go on to make millions from your teaching. Do you own the copyright in your training? No, not quite. But, let's fix that.

If you're not delivering a highly confidential training, get permission and record it. Also, save your leave-behind resources in PowerPoint. Once you've digitally preserved the teaching materials and recorded your live training, you've created copyrights. They’re intellectual property assets that you can license - whether to that client or others - to generate additional revenue.

Here's an Assure ™ Action. When distributing training materials and leave-behind resources, include a copyright statement at the bottom of the first page or each page, especially if it's digital. A simple line with ©, the year, and the name of your company followed by the phrase “All Rights Reserved.” That'll do it!

Now you understand what it means to preserve your work in a fixed medium. It's as simple as writing the content on your computer, or pressing record on your smartphone. The other important element to protecting a copyright is that it must be an original work. That means you created it. In fact, it actually doesn't matter if someone created the same identical thing, as long as you didn't have access to their work.

What’s the Difference? Copyrights, Trademarks, Trade Secrets & Patents

Intellectual Property (“IP”) includes copyrights, trademarks, trade dress, trade secrets, and patents. Here’s a quick primer.

A trademark is a word, sound, color, symbol or combination of them that distinguishes one product or service from another. Think Nike. The word Nike, Just Do It, and the Swoosh symbol are all trademarks. Nike is the brand name; Just Do It is the slogan; and, the Swoosh symbol is a logo.

Trade dress protects the look and feel that distinguishes your product or service. That can include things like packaging, architecture, or the atmosphere of a place. Consider the Tiffany blue box. I don't know about you, but I immediately know something good is inside those little blue boxes!

A trade secret is confidential information that provides a competitive business advantage because you take steps to keep it a secret. Good examples are the KFC recipe, the Coca-Cola formula, and the Google search algorithm. Trade secrets can also be information like your customer list, pricing strategies, and expert know-how.

Finally, patents protect inventions like the light bulb, pharmaceutical drugs, and similar novel innovations.

The Copyright “Bundle” of Rights ... + Beyoncé

Copyright owners have certain exclusive rights. In fact, they're called a “bundle of rights” that include the rights to copy, perform, display, distribute, and make derivative works. I know that's a mouthful, but we'll break it down with an example. More particularly, a licensing example.

Ever heard of a little artist named Beyoncé? Word on the street is that she writes lots of her own songs. Let's say she alone writes a song's lyrics. She then exclusively owns the copyright in it.

Turns out she can sing too! When she performs a song using the lyrics that she wrote, and video records that performance, the recording is called a “derivative work”. This is because she turned lyrics of a song into a new creation - on video.

Once, she even sang her songs at an event called Coachella. Estimates are that she was paid somewhere between $3 to $4 million for those performances. But do you know what? She negotiated the rights to the video recording of her Coachella performance. That video was called "Homecoming," and she licensed those rights to Netflix for a cool $20 million.

To recap, Beyoncé wrote songs, performed them at Coachella, created a derivative work with the "Homecoming" video, then distributed it under license to Netflix, making a fine set of coin along the way.

Each of those stages reflect the bundle of copyrights that we mentioned before. And my friends, that's the beauty of being a copyright owner with licensing rights.

You might be thinking, that's great Jo, but my Beyoncé-level creative talents haven't quite yet been discovered. No problem. Next, we'll talk about licensing business copyrights, which you do have. Specifically, business copyrights for Coders and Consultants.

Quick Recap

• We learned that copyrights are creative works in a fixed medium. That means that ideas are not protected under copyright law, but written, recorded, and digital content are.

• We covered the differences between types of intellectual property including copyrights, trademarks, trade secrets, and patents.

• We highlighted how Derivative Works capitalize on the "bundle of rights" under copyright law to generate new income streams … through appropriate homage to Beyoncé’s business savvy. All hail Queen Bey!

Here's an Assure ™ Action.

Consider how you're delivering code or distributing consulting expertise today. Take a moment to strategize new licensing and delivery models to capitalize on your bundle of rights.

Need some help? Let’s collaborate!

We help 7 and 8 figure companies build recurring revenue through licensing successful brands, software, expertise, and business content. Our Assure Architect™ strategy framework identifies what to license, highlights target customers, develops pricing models, and establishes a go-to market sales plan. It's easy to get started. Reach out to us via our website. Or, connect with me, JoAnn Holmes, directly on LinkedIn.

Thanks for sharing the podcast, and for your kind ratings and reviews. If you haven't yet, please subscribe in your podcast app right now, so you don't miss any other great content from Your Business Ally™.

We always appreciate your support, Allies. Until next time, Set Your Agenda, and Here's to Your Success!

______________

JoAnn Holmes ("Jo") is the founder of HOLMES@LAW. The firm helps innovative midsize companies grow recurring intellectual property revenue, negotiate successful business contracts, and implement profitable legal strategy. Learn more about our Assure™ strategy services to monetize IP, establish a sound legal foundation, and streamline smart business decisions. Our Business Ally™ contract subscriptions help clients stop leaving money on the table, and protect your bottom line.

Holmes, How … about the Disclaimers?

Information shared by JoAnn Holmes and/or HOLMES@LAW, LLC ("We or Us") is for educational purposes only. It is not legal advice. Each situation is unique, so the information We share may not be relevant to your circumstance. Until you enter a formal engagement agreement with Us, We are not your legal counsel, and no attorney-client relationship exists. So, please do not share any confidential information with Us, and please only interact with Us if you agree to these ground rules. Thanks!

© 2020 HOLMES@LAW, LLC. All Rights Reserved.

Brands & Bank - Trademarks for Business

What's a Trademark?

Trademarks include words, phrases, symbols, sounds, colors, and combinations of any of those. Of course, your business can have multiple trademarks. Let's use NBC as an example. There are the letters NBC, the peacock logo, and the chime. We associate all of those with the television network.

The goal of any trademark is to distinguish your products and services from those of others. Once you invest in building up goodwill through your marketing and sound reputation, you don't want anyone else to be able to confuse consumers into accidentally buying their products or services, rather than yours.

Let's go a bit deeper. The word trademark is actually an umbrella term that includes brand names, slogans, and logos. Here's another example. Nike is a brand name, "Just Do It" is a slogan, and the swoosh symbol is a logo. When we see any of those, we know that the product comes from Nike, Inc. And, we can expect and trust that there will be a certain quality standard upon which we can rely on those products.

I'm often asked about the differences between trademarks and service marks. Service marks are specifically for services. "Trademark", again, is more of an overall umbrella term. It's sometimes used to reference both products and services.

And what about those symbols? So the little "™" symbol indicates products, And, the best practice is to use an "℠" symbol to signify services like, say, consulting or software development. Keep in mind that both "™" and "℠" are best used for unregistered trademarks. That means that your trademark hasn't been granted registration (here in the US) by the United States Patent and Trademark Office. If you're outside the United States, then your country will have its own trademark registration office.

So why should you use the "™", the "℠" or the ®? The key reason is to tell the world that your word, logo or slogan is, in fact, a trademark that uniquely identifies your products and services. This helps to establish what are called "common law" rights in your mark, which gives you certain limited protections, even before a trademark registration issues. Once your trademark or service mark has been federally registered (again here in the United States with the US Patent and Trademark Office), it's a good idea to begin using that ®. That provides notice that your trademark is registered, and the federal registration grants you nationwide rights.

Here's an Assure ™ Action. If you have a pending trademark application, but your registration hasn't issued yet, you may want to limit the first run of product labels. That way, when your registration issues, you can update the graphics from a ™ to a ®.

What is Trade Dress?

Here's an opportunity to solidify your IP expertise, Allies. In addition to trademarks, you may also have trade dress. What's that?

It's actually legally defined as the overall look and feel of a product and can include things like packaging, architecture, specific decor, and generally themes of a product or a setting.

• Let's say you see a small teal colored box with a crisp white bow wrapped around it. Anyone thinking Tiffany?

• How about a curvy glass bottle full of soda? Does Coca-Cola come to mind?

• A plain white screen with six letters in the center, and each of those letters is presented in blue, red, yellow or green. Feeling lucky? Yes, that's Google!

Funny story here. I once walked into a Grand Lux Cafe restaurant and I just about had a nervous breakdown with a worry that this restaurant was knocking off the Cheesecake Factory. The colors, the decor, the setup, they all look just like Cheesecake Factory! Turns out it's a sister restaurant owned by the same company, but it's a great example because, even without seeing the Cheesecake Factory name, all the clues told me where I should be. That's strong trade dress.

What's the Difference? Trademarks, Copyrights, Trade Secrets and Patents

Okay, Allies, we've introduced trademarks and trade dress. Let's give a quick reminder on the differences between trademarks, copyrights, trade secrets and patents.

• So trademarks, as we just covered, are sounds, colors, words, symbols, designs, and combinations of them that distinguish your products and services from those of your competitors.

• A copyright is a creative work, so we organize them between creative copyrights and business focused ones. Creative copyrights are things like songs, movies, books, artwork, sculptures. By contrast, business focused copyrights are things like architectural designs, training materials, or software code. We'll talk more about copyrights later in this series.

• A trade secret is confidential information that provides you with a competitive business advantage. So you are familiar with famous trade secrets like the KFC secret recipe, the Coca Cola formula, or even the Google algorithm. Trade secrets can also be information that you might not have considered within your own business, like your customer list, pricing plans, advertising or marketing strategies, and your expertise. They're the things that you've invested in, and built over time. You generate revenue from those investments because they remain secrets in your organization. We'll publish an episode on trade secrets in this series.

• Finally, patents protect innovations, like the light bulb, or pharmaceuticals and similar novel innovations.

Now that we've established the trademark fundamentals, and distinguished them from trade dress, copyrights, trade secrets, and patents ... what does all of this mean for your business? Good question. I have the smartest Allies of them all!

Trademark Value in Business

Over time, you market yourself, your company, its products and services. All of that investment in ads, social media and networking grows your public reputation. In trademark speak, that's your "goodwill". Once you build that goodwill, it's worth protecting. Trademarks do just that. Again, they distinguish your products and services from those of your competitors.

We know the difference between Big Macs and Whoppers, Holiday Inn versus the Four Seasons, and a Toyota versus a Tesla. Each of those names mean something to us. They convey a set of values. Those values represent the brand's goodwill.

Let's go a bit deeper on goodwill. When advertising, you're likely trying to achieve some marketing objective. Here are some branding examples and their related goodwill.

• Consumer reports and Lysol are trusted brands.

• Bentley and Louis Vuitton are luxury brands.

• Ben and Jerry's ice cream and Honest foods are brands dedicated to social good.

• And Harley Davidson motorcycles is actually a "cult brand" because it's got lifetime devotees who will follow that brand, whatever they do over decades.

Do you see what I mean, Allies? We know something about those brands because the companies that own them invested heavily in building up a specific meaning associated with them. As a result, each of those brands have quite valuable goodwill. The way to preserve the brand investment in goodwill is by protecting them as trademarks, and assets in your portfolio.

Of course, those assets aren't traditional property like real estate. They're intellectual property. But they're assets nonetheless. Your business valuation - and should you want it, ability to attract investors and to exit your business profitably - will all largely be impacted by your IP assets.

So a quick recap, we've just covered why trademarks matter in business, and explained that your advertising dollars pay off in goodwill. You know that I LOVE to talk business, so you might be wondering, how can I monetize trademarks, Jo? Good question. Allies! The answer is up next, let's talk licensing and make you some money.

Monetizing and Licensing Trademarks

I'm an IP licensing geek. It's okay. I know it. In fact, I embrace it! And hopefully soon, you'll love it too ... because it's one of my favorite ways to help clients build recurring revenue.

In simplest terms, trademark licensing means allowing others to use the goodwill in your brands on their products or services so as to improve your bottom line.

Let's say you're a little outfit called The Walt Disney Company. You would own brands like Avengers, Frozen, Doc McStuffins, and a quaint little franchise named Star Wars. Then let's say you license those brands for use on things that you don't directly manufacturer, like toys, clothes and school lunch boxes. You might generate a cool $52 billion in worldwide sales on licensed merchandise. Do you love licensing yet, Allies?

I manage trademarks globally and in over 150 countries, so I know the power of an established brand to generate new revenue - both in the US and abroad.

Licensing leverages your brand in a few ways. For example, if your brand is well established in the United States, but you don't want to develop an international infrastructure, you could license the brand abroad.

Here's an Assure™ Action. There is no way to gain global protection for trademarks. So, if you enjoy brand success in one country, and want to expand into new markets, be sure to file trademark applications to protect your brands internationally before competitors grab up those rights.

Beside international expansion, you could grow your product and service footprint in other ways. Marie Kondo was well known for the Life-Changing Magic of Tidying Up book, but based on the popularity of her book, she leveraged that notoriety and goodwill into a Netflix series called Tidying Up with Marie Kondo. A natural expansion might be licensing her KonMari method for branding on storage containers, cleaning products, or other goods associated with home organization. All of this would be captured under the guise of trademark licensing.

Another example is licensing athletic brands. Your favorite sports team probably doesn't manufacture those jerseys or jogging pants that you love, but they earn a mint by licensing those brands.

Another way to leverage your brand is to expand through a strategic partner's marketing and distribution channels. This might be a co-branding or a cross-branding relationship. Think Starbucks in Barnes & Nobles. Or, Doritos brand shells at Taco Bell.

Brand licensing can also take the form of a sponsorship. This helps to increase brand recognition. By way of example, over several years, the NFL partnered with the American Cancer Society to raise awareness around breast cancer. Remember when players wore those pink uniforms? The partnership was likely intended not only to appeal to women, but also to enhance the NFL's goodwill with that female demographic. The benefit of gaining favor with women, and supporters of cancer survivors, may have been worth the NFL's investment in that partnership - even without any exchange of money from the charity.

By contrast, when Mercedes-Benz sponsors a sports arena, they're paying quite a good bit of coin to have their name seen and heard on NFL broadcasts. The takeaway, Allies, is that there are lucrative ways to leverage your trademarks via licensing arrangements, whether directly for income to raise your brand profile, or to simply do good.

Trademark License Revenue

There are various compensation arrangements for trademark licenses. For example, let's say you have a popular line of health foods. You can charge:

• A percentage of sales to license your brand to a manufacturer who sells pre-made meals to grocery stores

• Or, you could charge a flat rate royalty, let's say, to license your brands within a restaurant chain on healthy menu items. In that scenario, maybe your logo is next to those items on a menu that align with your popular brand of healthy foods.

In addition to channel licenses like we just described with grocers or restaurants, there are more granular territorial restrictions that you could apply. So, continuing with our example, perhaps the manufacturer can only sell to grocery stores in the Northeast, and the restaurant chain can only use your brand on their healthy menu items along the West coast. As those markets expand, you can renegotiate for more revenue!

Another layer might be time restrictions, so perhaps those licenses only last for one year, or you might include minimum royalty requirements such that if the license isn't profitable, then your brand is not locked up while there might be more lucrative sales opportunities elsewhere.

An Assure™ Action here. Start small, Allies. Allow a licensee to prove their ability to sell and maintain quality products before you expand the scope of that license. Otherwise, you could leave money on the table.

A quick note for those who want to license services, you can set up a certification program that has standards to replicate your systems using your proven techniques. You might even test licensees, or have other measures to ensure that your methods are deployed in the manner that supports the ongoing goodwill in your brand. Just be careful not to exert too much control, because that could be deemed a franchise (with governing federal and state regulations).

An example of certification is Zumba fitness. Zumba coaches are trained in that unique methodology. The trainers are not directly employed by the company that owns the Zumba brand. But, once they know how to deploy the program, and provided that they maintain certain standards, they have a license right to use the Zumba brand for some period of time at your local gym. Certifications help build recurring revenue because you can require ongoing training to maintain the certification license. And, each time a coach comes back for additional training, that's new monetization. We love recurring revenue!

License Agreement Watch-Outs

There are a few things to consider before you license a trademark. First, ensure that you actually own it. If you'll license brands, logos or slogans in the United States, it's important obtain a federal trademark registration, which affords you the nationwide right to use those assets in connection with your products and services. Likewise, if you intend to license the brand abroad, you'll want to obtain trademark registrations in those additional countries.

Also, avoid "naked licensing". If your grandmama was like mine, she probably had some standards. The same holds true for brands.

• Establish meaningful quality control standards.

• State them clearly in your licensing agreements.

• Regularly check for compliance, whether directly or by authorizing a third party to do that on your behalf. In particular, actively police the use of your trademarks online. Even a simple Google search can help you keep apprised of how your brand is being used, so you can take quick action against unauthorized uses and infringements.

• Include an audit right. In any licensing agreement, you'll want the ability to inspect the licensees' books and records to make sure you're receiving the correct payments and royalties. If not, you should be made whole and paid what's due to you.

Without these measures, you could lose your goodwill, and your trademark rights altogether. And, if you encounter an infringement, consult an attorney about how best to approach the infringer to protect your brand rights.

Quick Recap

We've learned -

• Brands, logos and slogans are all trademarks;

• We know the differences between trademarks, trade dress, copyrights, trade secrets, and patents;

• Companies build goodwill through brands; and

• How to monetize trademarks for recurring revenue through licenses.

Now that you're an expert, here's an Assure Action™ so you can use what you've learned to make money in your business.

• Inventory of your trademarks.

• Have you filed federal trademark applications to lock in your nationwide rights?

• Who loves your products or services? How might you leverage your brands, slogans and logos to expand into new markets with that audience?

• Which brand partners and strategic licensees could leverage the goodwill in your brands to sell their products and services to your customers?

Need some help? Let's collaborate!

We help clients build recurring revenue through licensing successful brands, software, expertise, and business content. Our Assure Architect™ strategy framework identifies what to license, highlights target customers, develops pricing models, and establishes a go to market sales plan. It's easy to get started. Reach out to us via our website. Or, connect with me, JoAnn Holmes, directly on LinkedIn.

More goodies to come on our podcast! Next up, we'll talk Copyrights for Coders and Consultants. Be sure to subscribe to Your Business Ally™ in your favorite podcast app, so you have access to every episode.

And, if you've learned anything that would be valuable in your business, take a moment to share the love with another business leader who could benefit from more revenue through trademark licensing.

We always appreciate your support, Allies. Until next time, Set Your Agenda, and Here's to Your Success!

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JoAnn Holmes ("Jo") is the founder of HOLMES@LAW. The firm helps innovative midsize companies grow recurring intellectual property revenue, negotiate successful business contracts, and implement profitable legal strategy. Learn more about our Assure™ strategy services to monetize IP, establish a sound legal foundation, and streamline smart business decisions. Our Business Ally™ contract subscriptions help clients stop leaving money on the table, and protect your bottom line.

Holmes, How … about the Disclaimers?

Information shared by JoAnn Holmes and/or HOLMES@LAW, LLC ("We or Us") is for educational purposes only. It is not legal advice. Each situation is unique, so the information We share may not be relevant to your circumstance. Until you enter a formal engagement agreement with Us, We are not your legal counsel, and no attorney-client relationship exists. So, please do not share any confidential information with Us, and please only interact with Us if you agree to these ground rules. Thanks!

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