What are the risks to licensing IP?

Oft stated in IPBlog is the premise that licensing may well be the most pure blending of IP and business strategies. An editorial published in IAM Magazine cautions potential licensors about the attendant risks to out-licensing IP• It can compromise the licensor’s ability to enforce quality control standards and requirements; • It increases the risk of the licensor’s IP rights being infringed; • The licensor’s reputation can be damaged by a licensee’s bad behavior; • The licensor can lose direct control over its customers; • It may increase counterfeiting activities and piracy if proper controls are not in place; and • It results in an administrative burden of monitoring the network of licensees.

This is a good checklist for analysts to go over with clients in strategic review of how to best exploit their IP.