Licensing

*** Topic for #WorldTrade: Current Events in World Trading
#WorldTrade: @ImpExpNow ideabrokr
*** End of /NAMES list.
#WorldTrad: Welcome...this is it...you made it to the classroom!
*** Mode is +stnrzl 50
ImpExpNow: howdy!
ideabrokr: hi there!
ImpExpNow: nervous?
ideabrokr: how many are we expecting?
ideabrokr: not really
ImpExpNow: 10 confirmed..
ideabrokr: good
ImpExpNow: I sent out a reminder to the ten last night..
ImpExpNow: 2 sent regrets...
ImpExpNow: so who knows...
*** cnk5 (cnk5@proxy2.talkcity.com) has joined channel #WorldTrade
ideabrokr: if I can talk in front of hundreds of people, a few online
won't hurt me :)
ImpExpNow: there ya go..
ImpExpNow: Welcome, cnk5, glad you're here!
ideabrokr: ditto!
ImpExpNow: cnk5, have any news to report from the biz front?
*** Signoff: cnk5 (cnk5 has left the room)
ImpExpNow: well...
ImpExpNow: cnk5 will be back...
ideabrokr: was it something you said? LOL
*** cnk5 (cnk5@proxy8.talkcity.com) has joined channel #WorldTrade
ideabrokr: am gonna e-mail you with some more questions about the
site
ImpExpNow: ever had stilton cheese and a granny smith apple?
ImpExpNow: sure, email me anytime..
ideabrokr: not stilton, but yes, the combo's great!
ImpExpNow: stitlton is that killer english blue cheese..
cnk5: welll...lost the connection for a minute...but glad to be
back!
ImpExpNow: about the only thing that can stand up to a granny smith..
ideabrokr: even better! I've only got tangerine juice!
ImpExpNow: and we glad you are!
ImpExpNow: cnk..any news from the biz front?
cnk5: are we talking food beacuse it's dinner time?
ideabrokr: I think so... :)
ImpExpNow: cnk5, dinner comes after cocktails..
ideabrokr: in Seattle and LA, anyhow!
ImpExpNow: right now we are having hors d'ouerves...
ImpExpNow: lol..dinner at 8...
*** gattor (modeangru@proxy1.talkcity.com) has joined channel
#WorldTrade
cnk5: Biz was "onm hold" while I planned a wedding and got
hitched...but now I'm ready to get serious about pMorrocan pottry
or...who knows
ideabrokr: welcome gattor!
ImpExpNow: I swear I never get dinner until 8 cause I am too busy
before that...
ImpExpNow: gattor, welcome to #WorldTrade, we are glad you are
here...we so esteem your views!
gattor: howdy
ideabrokr: yeah, I'm 7:30-8ish myself
ImpExpNow: cnk5, you tied the not..way to go..hope you have a long
and happy marriage...
cnk5: Thanks...so far so good
*** mark4321 (mark4321@proxy6.talkcity.com) has joined channel
#WorldTrade
ideabrokr: welcome mark4321!
ImpExpNow: Hey everyone, mark4321 is here..everyone welcome mark4321!
ImpExpNow: howdy mark!
cnk5: Welcome mark4321!
gattor: howdy
*** mark4321 has left channel #WorldTrade
ideabrokr: it happens every time! :)
ImpExpNow: well..
--> ideabrokr probably go ahead and start..people will wander in
later...
ideabrokr: shall we? or wait for mark4321?
ImpExpNow: aw..go ahead..he'll be back.
--> ideabrokr do you have your transcripts running?
ideabrokr: okay. First, thanks to everybody for being here on a
night "off." I appreciate it!
gattor: Some times its really hard to get back in
*** mark4321 (mark4321@proxy4.talkcity.com) has joined channel
#WorldTrade
ideabrokr: there he is!
ImpExpNow: not for mark, he is expert!
ideabrokr: are you "all" here, mark?
mark4321: hi, sorry had a bad connection
ideabrokr: no problem
ideabrokr: Okay, let me give you a little background, so that you
know how I can speak about the subject matter.
ideabrokr: In my "physical" life :) I was part of the team that
licensed the Mighty Morphin
ideabrokr: Power Rangers
ideabrokr: We were the first TV series to reach $1 BILLION in
merchandise sales worldwide in one TV season
ImpExpNow: Most of that from my nephews...
ideabrokr: I was the contract administrator, and as part of my
duties, I had to oversee licensing agreements
ideabrokr: and a few others!
ideabrokr: licensing agreements worldwide--when I left, I was
managing 500+ contracts
ideabrokr: Now, everybody here know what licensing is?
mark4321: permision to sell a particular product
cnk5: It covers a lot of different areas doesn't it?
ImpExpNow: I think I do, but go ahead and tell us...
ideabrokr: good, I wanted to see what everyone knew
ideabrokr: If someone owns a patent, trademark and/or copyright, they
own the "rights" to that item
ideabrokr: Licensing is their "rental" of those rights
ideabrokr: The terms can be different for each rental
ideabrokr: Different territories, terms, etc.
*** jbjson (dbjack@proxy7.talkcity.com) has joined channel #WorldTrade
ideabrokr: welcome jbjson!
ideabrokr: so whoever owns rights to an invention, a story, etc. can
"license" those rights.
ideabrokr: Is that clear?
ImpExpNow: Howdy, jbjson, just jump in any time!
mark4321: yes
ImpExpNow: clear to me..
ideabrokr: good!
cnk5: In some cases would the licensee have the right to
manufacture and in othe cases just the right to sell?
ideabrokr: good question...yes, on both accounts...each "license"
agreement can be for manufacturing or selling or both...
ideabrokr: the licensor is the one owning the rights
ideabrokr: the licensee is the one getting the rights to temporary
use, either to sell the item and/or manufacture it
ideabrokr: so, if you own the rights to a widget, you can license it
out to a manufacturer to make and distribute for you, and you can also
license out other forms of distribution for it
ImpExpNow: with mighty morphin, who was licensor and licensee?
ideabrokr: one of those other forms of distribution is international
licensing
ideabrokr: with MMPR (power rangers), Saban Entertainment, who held
worldwide rights except for Asia, was the licensor
gattor: Are these license very expensive
ideabrokr: as I said above, we had over 500 licensees when I left,
125 domestic (US), the rest worldwide
ImpExpNow: Who developed the product?
ideabrokr: depends on the perceived "value" of the license..it's all
negotiated
ideabrokr: MMPR came from Toei TV in Japan...it's been running there
for over 20 years!!!
ideabrokr: cnk5...to answer your question more fully
ideabrokr: if you have an "unknown" product, the value of the license
will be small
ideabrokr: as ours were when we first sold MMPR...
cnk5: flat fees...royalties...variety? What is most common
ideabrokr: if it's a "hot" tradename, such as Disney or Coke,
starting licensing fees can be upwards of $100,000
ideabrokr: depends on the industry. It's been my experience that
there's a mix of royalty and flat.
ideabrokr: Flat mostly in patent-related
ideabrokr: royalty in copyright/trademark related items
ideabrokr: copyright/trademark items are audio, visual (TV, movies
ideabrokr: books, records, music, photos, etc.)
ideabrokr: patent items are inventions, and upgrades on items, such
as furniture
ideabrokr: questions at this point?
ImpExpNow: Ok..you've defined royalties and licensing..
gattor: Sounds like paying to be a sales man
cnk5: Can you license the ability to provide services or the use
of equipment?
ideabrokr: gattor, not quite. Good example--lunchboxes.
ideabrokr: There's a company in TN who's made them forever.
ideabrokr: But, year in and year out, they can only sell so many
ideabrokr: So, they go to Disney, pay a license fee for the rights to
put
ideabrokr: Mickey on the lunch boxes, and voila! Their sales go
ideabrokr: up 300%!
ideabrokr: Well worth the license fee because now people
ideabrokr: who didn't buy their lunch boxes before, do now.
ImpExpNow: Mickey is so hard core in sales...say I have an excellent
product idea..should I export it or shouold I license it..what is the
criteria?
ideabrokr: Up to you, but let me present the pros and cons
ideabrokr: With international licensing, you license the rights to
manufacture and distribute your product to manufacturers in other
countries.
ideabrokr: The product is made there, distributed there, there are no
import taxes paid, no shipment not arriving...
ideabrokr: the big companies in this country all do it because...
ideabrokr: it is basically a paperwork job for them.
ideabrokr: they find an appropriate agent for the country
ideabrokr: through the US Dept of Commerce, who scours the country
for the best companies to do deals with
ideabrokr: since their own reputation is on the line, and they known
their own country better than any outsider
ideabrokr: they are the best sources of companies to work with in
each country
ideabrokr: I also did a short stint in exporting to the
Philippines...
ideabrokr: half the time our products ended up on the black market
at the dock...
ideabrokr: never reaching the big marketplace...with licensing
agents, you rarely run into those problems...
ideabrokr: okay, questions on this part?
cnk5: The Dept of Commerce will locate the agents?
gattor: They make a commitment by purchasing a license
gattor: which cost money
ideabrokr: yes cnk5, they give you a list of approved agents for each
country
ImpExpNow: How about this..we find a hot item in USA..can we get
license rights for say Japan, have it made and distributed there and
make money this way?
ideabrokr: gattor--right! The foreign manufacturer has an investment
in the product too, so he's gonna make sure it gets out there!
ideabrokr: ImpExpNow--exactly! Then you're acting as an agent for
that product into Japan.
cnk5: I like that idea!
ideabrokr: By the way, there are no requirements for being an agent,
except honesty and networking...
ideabrokr: Inventors here do it for each other all of the time...
ImpExpNow: ideabroker, no int'l legal requirements?
ideabrokr: With licensing, it gives you an easy, quick entry into a
foreign market without the large capital outlay
ideabrokr: int'l requirements--if you have a relationship already set
up with that country, no
gattor: Paying out money means you would have to have customers
ideabrokr: if you don't, then you'll have to check with the Dept of
Commerce for each country's requirements
cnk5: what is involved in "having a relationship"
usually--registration, fees?
ideabrokr: gattor--paying out money to who? The manufacturer is the
one who has the distribution already in place...
*** jbjson has left channel #WorldTrade
mark4321: how do you determine what is a fair price for a license?
mark4321: whether your buying or selling the rights
ideabrokr: cnk5--business relationship. You already have business
contacts in those countries, you've done business there.
gattor: paying out money to whom is selling the license
ideabrokr: mark--first, you only "rent" rights...just like an apt.
mark4321: sorry fair rental price
ideabrokr: That "rent" is determined by the value of the product, the
demand for it, what the market will bear, etc.
ideabrokr: gattor--the licensees, the manufacturers are the ones who
pay the license fees.
ideabrokr: they are the ones who want to be able to make the product
and distribute it.
ideabrokr: they do this instead of paying for a huge advertising
campaign for their product, or in addition to one...
ideabrokr: it's basically used to give a mfg company multiple
streams of revenue. If they get the rights to make a product
ideabrokr: and then get the rights to distribute it retail, through
catalog, via the Internet, in overseas markets, through vending
machines, etc.
cnk5: I, like gattor maybe, thought you pay for the rights then
find a manufacturer so you'd have to have customers first . That's
not the case...you're strictly an agent?
ideabrokr: then they have the market pretty well sewn up for the
product.
ideabrokr: then they have the market pretty well sewn up
ideabrokr: sorry, I didn't page down :)
ideabrokr: As an agent, you get a percentage of putting the deal
together between the owner of the rights and the mfr who wants to
ideabrokr: rent them for a while...
ideabrokr: cnk5/gattor--you both produce a product
ideabrokr: or I should say
ideabrokr: "have the rights" to a product
ImpExpNow: idea, how would you appraoch a USA manufacturer who you
wanted to broker a license...
ideabrokr: I come along, and tell you that I know a way you're not
getting money for that product
ideabrokr: have an example from the papers recently
ideabrokr: a woman in Baltimore came up with an idea, but the product
ideabrokr: was already out there, but she figured out a way they
weren't selling it
ideabrokr: and making additional money from it.
ideabrokr: the way they weren't selling this product was through
vending machines.
ideabrokr: She went to a vending machine company, with facts and
figures in hand (having scoped out the market)
gattor: The person between two companys?
ideabrokr: BUT NOT WHAT THE PRODUCT WAS...
ideabrokr: and told them that if they sold this product, they would
ideabrokr: triple the number of vending machines they would sell in
this country.
ideabrokr: They asked her to tell them what the product was, and at
that point, she produced an agent agreement
ideabrokr: Once they signed, making her their agent and giving her
25% of whatever they took in from this new product coming in to their
vending machines, and their having to sell additional vending machines
to hold all of the goods,
gattor: Do they have to sign before you tell them product?
ideabrokr: then she told them what the product was.
ideabrokr: If they didn't want to sign, they never found out what it
was.
ideabrokr: On the other side, she went to the people with the
product,
ideabrokr: and gave them the same story--there was a way their
product wasn't being sold, and if they'd give her 25%, she'd tell them
cnk5: She got 25% of gross or net for how long? Is that a
commmon %?
ideabrokr: Always gross--licenses are negotiated--no two are
alike--although with this particular product, I would guess 2-5 years.
mark4321: Does she have a right to audit their books to ensure she
is receiving the correct royalties?
cnk5: OK...I have to know...are you going to tell us the
product?
gattor: She sold them a marketing idea
ideabrokr: mark--always part of a license is an audit--I could spend
about two hours on the 30 or so clauses in a standard licnese
agreement
ideabrokr: gattor--the product side, yes a marketing idea, on the
marketing side (vending machines), she sold them the product
ideabrokr: cnk5--women's pantyhose! they're putting pantyhose in
vending machines in ladies' rooms in business bldgs all across the US!
gattor: I like that
cnk5: great idea!
ideabrokr: my female students always groan and say, "Why didn't I
think of that?"
mark4321: ingenous
gattor: as long as the panty hose is lycrose 15% is good idea
ideabrokr: that's a prime example of being a licensing agent without
owning the rights to a product
ideabrokr: gattor--if they're in the bathroom, you can easily go in
every 10 minutes when you rip the old pair and get a new one! LOL
ideabrokr: that's why I say for overseas licensing
ideabrokr: you have to have a relationship in the country you're
ideabrokr: interested in--in order to be a successful agent there.
gattor: Those will not rip...
ideabrokr: you can also be an agent here for overseas companies who
want to license here...
ImpExpNow: my wife is constantly complaining about pantyhose..she
says the cheap ones are the best...
ideabrokr: and that's what's going into the machines from what I
hear...
gattor: The new one's are the ones that have lycrose in them
ideabrokr: more questions?
gattor: no girdles?
ideabrokr: not in this particular deal...
ideabrokr: the one thing you'll have to have in overseas
ideabrokr: licensing, especially for bringing money out, is someone
ideabrokr: you probably already have in import/export...
ideabrokr: a good tax attorney
ideabrokr: we set up corporations worldwide, just to avoid the
overpayment of taxes
cnk5: What is the best way to research common terms of these
agreements for an idea or product?
ideabrokr: on taking out MMPR money out of each country
ideabrokr: cnk5--terms of a license agreement you mean?
cnk5: yes
ideabrokr: okay...go to an Office Depot, Staples, Office Max, etc.
cnk5: and also agent agreements
ideabrokr: check out their legal software, most of them have a
cnk5: I imagine a common agent % in one indistry could be
dfifferent than another
ideabrokr: boilerplate license agreement in them, which you could use
ideabrokr: as a starter, since each license is individual
ideabrokr: as to an agent agreement...not out on the common
market...one of the prize possessions that my classes get upon
request...and again, it has to be modified for use
ideabrokr: there are also
ideabrokr: a series of books put out by Nolo Press
ideabrokr: www.nolo.com
ideabrokr: that deal with "intellectual property" which is what
ideabrokr: patents, trademarks, copyrights and licensing
ideabrokr: fall under--most of them have forms
ideabrokr: I don't know which ones would have agency ones off the
ideabrokr: top of my head, though.
ideabrokr: more questions?
ImpExpNow: ideabroker, this is very interesting..
ImpExpNow: I have always traded in things you can touch..
ideabrokr: thanks!
ideabrokr: now you can trade in ideas!
ideabrokr: thus...tada!...the Idea Broker!
cnk5: it is VERY thougt provoking
gattor: I like to learn more about trade in ideas
gattor: what are the pit falls
ideabrokr: same as you would have in import/export
ideabrokr: is the product, or idea, ultimately going to sell?
ideabrokr: mfrs can license the rights to products, and then
ideabrokr: the stuff sits on the shelf
ImpExpNow: So ideabroker, how do people find you for further
information?
gattor: if you found a product in Canada and then looked for it
here. And find usa does not have it.
ideabrokr: email--ideabrkr@ix.netcom.com and very soon through...can
I say it.. Imp?
gattor: Please...do say
ImpExpNow: sure, idea...go ahead..
ideabrokr: through a WONDERFUL new site called Learn Online.
WONDERFUL classes! WONDERFUL instructors! :)
mark4321: In our classes about Import/Export there was little to no
use for attorneys. In trading ideas how important are attorneys?
ideabrokr: www.NonCreditEd.net
ideabrokr: the business side of trading ideas can be done without
ideabrokr: an attorney, the agreements should be run by them to close
loopholes before they're signed
ideabrokr: they're also important if highly technical material is
involved, and that's one case in which licensing overseas won't work,
for obvious reasons.
ideabrokr: Make sure you check out NonCreditEd.net...it'll be up and
running soon...
ideabrokr: right?
gattor: okay
cnk5: sound good!
mark4321: have you ever had a problem where a license agreement
wasn't adhered too overseas and what did you do about it?
ImpExpNow: soon, but not yet..
ideabrokr: not trying to put you in a spot, Imp
ImpExpNow: no prob, idea..lol..
ideabrokr: mark--you pull the license
ideabrokr: you keep the money, you get the goods back, and they lose
out
ideabrokr: all depending on what's negotiated
ideabrokr: anything else?
mark4321: thank you
ideabrokr: you're all very welcome, and thanks for letting me ramble
on
cnk5: Thanks very much...definitely worthwhile!
ideabrokr: Imp--anything you want to say in closing?
gattor: What about an idea that a manufacturer could make money
at.
gattor: how would you sell that
gattor: only one manufacturer
ideabrokr: that's what takes me over six hours to teach in person,
gattor
ideabrokr: lol!
ImpExpNow: ideabroker, I enjoyed this very much...
ideabrokr: thanks to all...and now, DINNER!!! :)
gattor: Do we get transcripts?
ImpExpNow: And thank you for sharing this with us...there are a quite
a few people who want transcripts...
gattor: yes
mark4321: yes
ImpExpNow: yes...I'll send transcripts..
cnk5: yes
gattor: thank you
cnk5: thkx
mark4321: thanks, John
ImpExpNow: So, folks, should idebroker offer a class online?
cnk5: yes
mark4321: yes
gattor: I think so...if there really is a way to sell an idea
ideabrokr: thanks, do I curtsy here? :)
ideabrokr: gattor--done every day
gattor: Ideas are plenty full
ideabrokr: cute--gotta go! Thanks!
*** Signoff: ideabrokr (Leaving)
cnk5: take care all...dinner is ready!..Bye
mark4321: bye
*** Signoff: cnk5 (cnk5 has left the room)
*** Signoff: mark4321 (mark4321 has left the room)
gattor: Thanks ImpExpNow
gattor: bye
*** Signoff: gattor (Leaving)
ImpExpNow: adios all!

Bookmark this post --- Email this post