Taking advantage of product licensing

February 2, 2011 - Tags: Intellectual property, Products

Istock 000000877604xsmallConsider this scenario: during the course of running your business, you've come up with an idea for a new product that will sweep the market off its feet. Perhaps your idea stems from conversations you've had with your customers; or, maybe it's just something that popped into your head. Whatever the case may be, you've got a viable idea, but, unfortunately, you don't have enough capacity to manufacture and market the product.

The research and development is a major piece of the puzzle; however, it is not the only piece. Without the ability to properly produce, distribute and market your product, you might find it challenging to be profitable. This doesn't mean you should have to give up on your idea. You may not have the necessary capacity, but another business might. Product licensing is a common, functional way to bring two or more businesses together in hopes of bringing a product to market.

By licensing your product you can take advantage of:

  • Production resources of businesses that specialize in product manufacturing
  • Marketing and distribution channels of businesses across the country or around the globe

You may also find yourself on the reverse side of the situation: perhaps you'd like to obtain the rights to manufacture and distribute someone else's product. A product licensing agreement between your businesses can make that happen.

In the case of either type of agreement – whether you're the licensor or the licensee – be sure to exercise due diligence. A product licensing agreement is a legally binding document, so you can't change the stipulations of the agreement once they are in place unless all parties agree to do so. You may want to have your lawyer go over the agreement with you in detail before you sign.

For more information on developing your unique ideas, consult our sections on Copyright and Intellectual Property and Innovation.


I am looking for a grant or loan for my Invention I already Patened it with US Trademark Patents in the United States need direction for the rest of the building materials for the Concept Model for Presentations to the companies for Advertising to Market

By Teresa on February 3, 2011

Interesting page. Is there a guide like this for a more specific step like getting a patent, or is there a government program to help with that?

By Alex on February 8, 2011

Hello Theresa,

There are a number of resources you can look into for financing.

Our Grants and Finances section is an excellent place to search for resources. Within this section, you can view or search for financing programs offered by governments by selecting parameters such as your industry, your location, your demographic group and/or the reason you are looking for financing. The section also links to sources of community-based and private sector financing.

Keep in mind that most lenders want to see a well-prepared business plan in advance of providing financial assistance. Consult our Business Planning section for more information on how to capture the essence of your business.

If you are still having difficulty finding business financing that is right for you, feel free to contact the Canada Business office in your region for further assistance.

If you have any questions about patents in Canada, the Canadian Intellectual Property Office may be able to help you.

Best of luck!

By Canada Business on February 8, 2011

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