IP Boot Camp — Leveraging Your IP
The historical purpose of intellectual property protection in the United States was to offer an incentive for inventors and artists to create, for the progression of the arts and sciences as well as to build a lasting legacy of creation in the US. This purpose has grown throughout time and the development of systems and businesses to add an additional purpose: to use that intellectual property to grow business and individual wealth. Leveraging your IP, or using it in effective and wealth generating ways, is an essential part of today’s IP and business strategy for its creators/owners. There are several different ways that owners of IP can use it to grow and scale.
Use
The primary way to leverage your IP is to use it! You have spent the time, effort, and money not only in creating the IP, but also (hopefully) in protecting it. Why wouldn’t you use it to its full potential? This can be done in different ways, depending on the type of IP and the type of business using it. Copyrighted materials, for example, can be utilized as creative content that brings in consumers and money, but can also be a useful tool for marketing, advertising, or driving sales to other products or services (like a slogan or jingle). Music, images, video, trademarks, inventions, and combinations of these can be leveraged for themselves, licensed to others for promotional purposes, or used as a mechanism to drive distribution or sales.
Licensing/Merchandising
In general terms, a license is a permission. When you license your IP, someone is generally paying to have your permission to use your content in a certain way or for a certain purpose. In most instances with a license, the person licensing the content maintains ownership of it. Also in most cases, the creator can dictate how the license will be executed and monitored as well as consequences, like revocation of the license, for improper use. It is very important to monitor licenses and licensees closely. Not only do they represent your brand or content to the outside world, but in some cases, particularly in trademark law, you can lose rights in your mark if you license to someone else and you do not monitor or check for quality (what is known as naked licensing).
Licensing options for IP owners are many, but what we see most often are distribution licenses and marketing/promotional licenses. Distribution licenses are entered into in order for an owner to license rights for manufacture and distribution to larger entities such as Target or Walmart for them to sell in their stores. In such a case, you could either receive a lump sum license fee or a royalty percentage off of units sold. There are also Marketing/Promotional licenses, including the sale of music, video or graphics to ad agencies or companies for use in commercials, print advertisements, etc.
Sale, Assignment and Transfer
IP is held as part of a company’s assets (usually as intangible assets for copyrights and patents, and as part of “goodwill” for trademarks) in determining the value of the company. Using your IP to raise the value of your company or bringing in IP from other sources may aid in growing your bottom line or making your company more attractive in the case of a sale or merger. In the same vein as a license, a sale or transfer of IP rights can also provide an infusion of capital for your company an in a pinch (if it is valuable).
**A note on licensing and sales: intellectual property may be licensed, sold, transferred in whole or in part! You may license the reproduction and distribution rights to a song, for example, but keep the performance, adaptation, and digital display rights. The default if no restrictions are mentioned in the transfer document, however, is that all rights are being transferred, so make sure you know what you are giving/receiving in an IP transfer and bargain for (all of) what you want!**
Policing
Policing can be an effective leveraging tool, and not just for keeping your IP safe and maybe getting some money. In high profile cases, you can even get media attention and exposure of you, your content or your product/services. A few examples are the “Own Your Power” trademark case involving Oprah and a small business owner in New Jersey — https://morrisonlee.com/oprah-not-heading-to-scotus-over-own-your-power/, or the band The Slants and their court battle to trademark their name, which the USPTO denied as a culturally disparaging mark— https://www.npr.org/sections/thetwo-way/2017/06/19/533514196/the-slants-win-supreme-court-battle-over-bands-name-in- trademark-dispute. The latter case changed trademark law and procedure, as well as bringing nationwide exposure to the band. Effectively policing and enforcing your IP can lead to a surge of internet hits, clients, sales, contacts (even hate mail) what have you. You know what they say: no publicity is bad publicity!
Leveraging IP in multiple ways
Just because you use one method of leveraging your IP doesn’t necessarily mean you aren’t able to leverage it in other ways. On the contrary, often the most successful content is content that can be used in several ways. Literary works (books) are a prime example of the possibility of leveraging a work in multiple ways.
At the outset, a literary work can involve multiple copyrights. First there is the actual text of the work. any illustrations that accompany the text can be taken separately or subsumed into the copyright in the work as a whole. When the work is completed, additional copyrights may be available for other related content. For example, there may be a Sound Recording Copyright available for the performance of an audiobook version of the work. New editions or compilations of works may qualify for additional protection as well, to the extent of any new information added or the unique organization of a collection of works. Adding on “non-literary” elements, such as cover photography/artwork, jacket notes, fictional world maps and character histories/backgrounds (as separate from the text), and author head shots and biographies, you could have even more copyright options, as well as possible Trademarks in unique character names, logos, or other unique aspects you have created.
From this, you can see that from a single work, say Harry Potter and the Sorcerer’s Stone, there are a host of intellectual property elements that could be (and have been) utilized by the owners of the IP: copyright protections in the book and illustrations, future works in the series, associated trademark protections (Harry Potter®, Hogwarts®, Butterbeer®, etc), merchandising (related products such as official wands, clothing, etc.), adaptations (movies), derivative works (Fantastic Beasts, live shows, plays, musicals, etc), and licensing for related and unrelated products and services (candies, Pottermore, video games and mobile apps, The Wizarding World of Harry Potter, etc).
Case Study: The Walt Disney Company
Disney is one of, if not THE, world’s most successful IP leveragers. As of this post, the company holds over 2,200 active patents, ranging from animation and film-making technology to animatronics, computer graphics and software, roller coasters, and even specialized vehicles.
They also have over 2,300 federally registered trademarks including Disneyland®, Disney World®, the Disney Channel®, Mickey Mouse®, Frozen®, Pirates of the Caribbean® and It’s a Small World®. Not to mention the Disney® mark itself, as well as all of its acquired trademarks and associated IP like Star Wars®, Marvel®, the Muppets®, and PIXAR®.
The Copyright results are even more staggering. Online copyright search records only let you view 10,000 results at a time, and only show records of copyrights registered after 1978. 10,000 search results for “Disney” only gets you through the “C”s. And that is only for copyrights owned and registered directly by the Walt Disney Company, not copyrights owned or independently registered by subsidiaries like ABC and ESPN or acquired companies like Marvel or Lucasfilm! Needless to say, Disney has registered and received a massive amount of copyrights.
Disney is also to be fierce sometimes unrelenting when it comes to enforcement and policing its intellectual property and has brought actions against not only large companies and competitors, but small businesses and even individuals when they believe their IP is being used improperly or without permission.
The Walt Disney Company is one of the most profitable merchandising, marketing, production, licensing, and entertainment conglomerates on earth that owns companies, products and rights in Music, Television, Movies, Travel, Live Entertainment, Technology, Consumer Products and many other fields. The company is a model of how a business can leverage its IP to grow and expand its business and business operations.
