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The Key to Successful Trademark Licensing

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The Key to Successful Trademark Licensing Transaction talk Written by Charlie Chapman and Pete Dubler The key to successful trademark licensing Trademark and brand licensing are an advocate for the HP brand). Individual strategic value to the business. For example, significant elements of HP’s IP licensing business units are responsible for assuring the HP technology is used by many paper mills to practice. For other brand owners, it financial stability, go-to-market and make products aimed at the digital printing may be worth considering adding customer-support capabilities and product markets in which HP printers compete. We such a practice to their own IP value- quality of each potential licensee on a region- made this technology available under capture models by-region basis. The licensee’s motivations multipart licences using the ColorLok and must also be evaluated by the business – for ColorPRO Technology brands, as well as In our experience, the highest-value, most example, how the licensee will position the under the HP brand itself. These trademarks, sustainable trademark licences include licensor’s brand in relation to house brands or each aimed at different parts of the market, differentiating technology (licensed by the other brands can have long-lasting assure customers of the best possible output trademark licensor to the trademark implications for the licensor’s brand. quality from their digital printers and presses. licensee). They are also complementary to The HP brand is a top-10 most valued Our licensing executives regularly update the company’s main lines of business and are brand (according to Interbrand). In order to and align with the business unit vice oriented towards the trademark licensee’s protect that status, we choose not to license presidents and chief technology officers. This main line of business. the brand promiscuously. Instead, we seek ensures that licensing activities remain tightly There are few closer relationships in always to align trademark licensing efforts coupled to business strategy, with the added licensing than those between trademark with core product development and sales benefit of earlier identification of licensing licensors (whose brand reputation is at stake) activities. To mitigate any potential erosion of opportunities. Trademark licensing and licensees. To develop and grow such brand value, the following evaluative filters are arrangements must be certain to enhance the relationships, licensing executives must applied: company’s brand messaging and positioning. carefully steward their own brands, while • Strategy – will a licence support core Accordingly, constant communication supporting the motivations of the licensor’s business objectives? between licensing executives and corporate businesses; but at the same time work to • Brand permission – would customers brand strategy executives is imperative. ensure that the companies’ overarching accept and value the brand in the target Finally, trademark licensing includes legal strategies and brand positioning, as well as product or service category? obligations to police the brand (ie, to inspect product lifecycle objectives, are not • Brand fit – does it align with company- licensed products, assure that quality is compromised. wide positioning and messaging of the consistent with the brand promise and to HP’s trademark licensing practice is an brand? defend the mark in licensed jurisdictions). We example of how brand owners can • Go-to-market alternatives - build, buy or have a team of expert trademark attorneys implement a licensing practice that enhances license: is trademark licensing the optimal who work with the licensing executives to brand value, complements corporate route to the market? craft the transactional structures and licence business strategies and develops loyal, documents that deal with matters such as passionate licensees. Our efforts focus close Trademark licensing can be a powerful indemnity, exclusivity, termination, renewal to the core, where technology-related product lifecycle management tool. It can be and other terms which commonly arise in intellectual property can most effectively be used to: licensing arrangements. used in concert with trademark licensing. • Penetrate new markets by building new A strategic trademark licensing Close-to-the-core trademarks plus product lines, channels or regions in programme does not simply rent its brands technology licences are more valuable to the which licensees might already have go-to- opportunistically. Rather, trademark licensing licensee, and thus more enduring. market capabilities (often including our should link directly to the company’s core HP believes that the company’s IP technology as a differentiator). business and brand strategies, and to the licensing function exists to support the core • Grow business by enhancing product product lifecycle stage. Trademark licences businesses and not solely as a profit centre ecosystems with licensed products and that include other kinds of intellectual decoupled from business strategy. We have services (eg, PC accessories). property multiply both deal value and established a disciplined process to align • Transition mature product lines to strategic impact. Brand owners seeking to trademark licensing activities with long- licensees to ensure continuity for grow their businesses and brands might well term business strategies before engaging customers and full value extraction. consider similar structures. with potential licensees. That process evaluates brand permissions (ie, a study of Our experience is that the most Charlie Chapman is vice president, IP what customers expect a brand to sustainable and highest-value trademark Licensing at Hewlett-Packard Company encompass), corporate brand messaging licences also include licences to technology and Pete Dubler is director, technology, (pursuant to corporate marketing guidance), and patents. As one would expect, such patent, and brand licensing at Hewlett- and licensee capabilities and motivations (as multipart arrangements deliver the most Packard Company www.iam-magazine.com Intellectual Asset Management July/August 2012 31.
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