Exploiting IP Assets Overview of Licensing, Franchising & Merchandising Wong Jin Nee.
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Transcript of Exploiting IP Assets Overview of Licensing, Franchising & Merchandising Wong Jin Nee.
Exploiting IP Exploiting IP AssetsAssets
Overview of Overview of Licensing, Licensing,
Franchising & Franchising & MerchandisingMerchandising
Wong Jin Wong Jin NeeNee
Roadmap Roadmap An overview of Licensing,
Merchandising & Franchising Benefits of these arrangementsLicensing
NatureTypes Key elements of a license agreement
MerchandisingFranchising
An overview of the Franchise Act 1998Conclusion
An Overview
Licensing, Merchandising & FranchisingLicensing Licensing
Permission to use IPR to improve profitability & expand opportunities, subject to contractually agreed terms & conditions
MerchandisingMerchandisingPermission to use of
brands/characters/events to promote saleFranchising Franchising
Permission to use “proven business system” (standard products/services, look & feel, signage, methods of preparation, inventory control) to replicate success
Why, Oh Why?Why, Oh Why?
Show me the Money – Generate revenue$Recoup R&D expenses & investmentVehicle for entry into:
new geographic markets without major capital investment
new product markets or product rangeForm strategic alliance
build relationship create new opportunities gain know how (new applications of old technology)
Strengthen market position Incorporation of technology into industry standard
Licensing
Nature of LicensingNature of LicensingIP owner retains ownershipA tool to leverage & exploit IP rights
Entering a new businessExpanding an existing business
(extending territory or nature of business)
Improving quality of goods/services Improving market positioningSettling legal suits
Exclusive, non-exclusive, sole
License
Exclusive
Sole
Non-exclusive
Only the licenseeOwner and Licensee
Owner and various licensees
Sub-License
TypesTypes
Licensing Out Grant right to 3rd Parties to use IPR
Contract manufacturingDistributorship/Dealership/Agency/MarketingExpansion into new market, product range, brand,
technologyLicensing In
Use 3rd Parties’ IPRTechnology transferSettlement of legal suits
Cross Licensing Exchanging of rights to use IPR
Co-brandingCollaboration, joint R&D , joint developmentCo-existence
Stages of negotiations, execution & management
NegotiationsNDA, confidentiality agreementHeads of Agreement/MOU/LOI
Due DiligenceExecution, Implementation &
ManagementTermination & Post termination
Key Elements of a License Agreement Parties Definitions Grant of Rights
Extent & Scope of licensed rights Right to sub-license Field of Use Territory
Term & Renewal Payable fees
Lump Sum Royalty Payment terms Overdue payment Taxes
Parties’ other rights & obligations KPI Quality control
Confidentiality Accounts, records & audit Ownership & Enforcement of
IPR Improvements Representations, Warranties
& Indemnities Termination Consequences of Termination Miscellaneous provisions
Entire agreement Compliance with laws Severability Notice Governing laws and dispute
forum
Merchandising
MerchandisingMerchandising Improve visibility and appealLicensing out
Revenue generation (royalties, license fees) Expansion into new market, extending product
range and business Invaluable marketing tool Risk free (relatively) and cost effective
Licensing in Increase brand visibility & recognition Reduce brand awareness cost Shape or reinforce perception Revenue generation (more sales)
Brand extension
Merchandising
Character PersonalityEvent
Source: http://www.etawau.com/HTML/AirAsia/Lat.htm
Brand extension
Source: http://www.virgin.com/about-us/
Franchising
FranchiseFranchiseEfficiencies, economies of scale,
market penetration, increased sales and profitability
"Franchising means working for yourself, but not by yourself"
Foundation of FranchisingA method of growing a business where a franchisee is
granted, for a fee, the right to distribute goods or provide services under a system determined by the franchisor
3 critical components of franchisingIntellectual Property Rights (IPR)Intellectual Property Rights (IPR)
Include trade marks, confidential information, Include trade marks, confidential information, copyrighted manuals, trade dress (décor) and copyrighted manuals, trade dress (décor) and all intangible assets that create customer all intangible assets that create customer loyaltyloyalty
Operating systemDelivers the promise of proven business format
Ongoing supportTools and tips to expand growth of customer base and
market share
Franchise Act 1998Franchise Act 1998Franchise relationship, governed by:
Franchise Act 1998 Franchise agreement Disclosure document Operation/Training manuals
Franchise Act 1998, in force since 8 October 1999 Provides for registration and regulation of the franchise
industry in Malaysia Sets out the respective duties and obligations of franchisors
and franchisees Governmental agency responsible for the Franchise
Act 1998 since April 2009Franchise Development Division of the Ministry of
Domestic Trade, Co-operatives and Consumerism (MDTCC or KPDNKK)http://www.kpdnkk.gov.my/index.php?lang=en
Application of Application of Franchise Act 1998 Franchise Act 1998 Applies to sale of any franchise in Malaysia
Sale deemed in Malaysia whereOffer to sell or buy
is made in Malaysia and accepted within or outside Malaysia; or
is made outside Malaysia and accepted within Malaysia; and
Franchised business is operated or will be operating in Malaysia
Starting point - determine whether the business arrangement is a “franchise”
Ingredients of a Ingredients of a franchise franchise For a business arrangement to be considered a
franchise under the FA, all of the following elements must be present:
a right to operate business according to franchise system; a grant of license to use the intellectual property rights
such as the brand names, confidential information and copyright;
a continuous control over business operations in accordance with franchise system;
assistance rendered to operate business (e.g. provision or supply of materials and services, training, marketing, and business or technical assistance);
in return, there will be payment of fees or other form of consideration; and
the business is operated separately.
Common elements
Protected IPRCore brand identity Shared connection or themeControl over commercial useIdentified scope of licensePutting a value to the IPR
Conclusion
Take-Aways IP Assets are business tools Its use should not be limited internally or simply
to exclude othersMany different ways to leverage, exploit,
maximise & moneti$e your IPManaging expectations
clear communication to establish mutual trust and respect
exercise sensitivity to relationshipsAfter the deal has been struck, important to
monitor and review for compliance Licensing management and enforcement
Development of strategies to manage, monitor and enforceCompliance programs and auditsA need to continuously fine tune the license agreement
Thank youThank you
Email :[email protected] (Wong Jin Nee)Tel : 03 20923322
Copyrights & Trade Marks of third parties in this presentation belong to the respective owners and are used solely for a
non-commercial purpose Wong Jin Nee & Teo