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How To License An Idea To More Than One Company

by | Sep 6, 2023 | 0 comments

How to License

I often get asked the question “How to license an idea to multiple companies and increase the revenue?” It is most people’s common concern, and I am here to share my experience on how it can be done. Always keep in mind that while approaching various companies to license your product idea, the majority of them will seek an exclusive license. This indicates that they want a monopoly on your product and do not want others to sell it.

This makes sense from their perspective because they are investing time and money in developing your idea and simply don’t want any competition. But from the inventor’s point of view, having multiple revenue streams is essential, and it provides protection if issues arise with one company.

How To License an Idea to More Than One Company

So, how can we achieve this? For me, the solution is quite simple.

First, consider what your licensee needs for success. Next, identify the categories or territories where they currently sell their products. You’ll also need to find the areas where they are not selling. Many companies desire a worldwide exclusive, but you have to realize that most companies don’t sell to everyone. So, your job is to identify their weaknesses and the gaps in their market coverage.

Is it possible that your product idea could sell in a different category or territory without directly competing with the product your licensee is offering? You must provide your licensee the opportunity to flourish while also looking for circumstances where another company may sell your product without directly competing with them.

To illustrate this, let me provide a few examples:

Assume the interested company sells its products in all of the big box stores but does not have an online presence. Online sales are not their strength. In this case, you could make a case for “carving out” online sales to other companies. “Carving out” means not giving them the rights to sell online in certain territories or categories, allowing you to grant those rights to other companies.

Also, consider repackaging the product to differentiate it and avoid price competition. Repackaging is a popular strategy. For instance, Costco repackages national brands in a way that doesn’t compete with their original price points and distribution channels.

There might be different distribution points that would not compete. If your licensee sells to food and drug stores, you could find another licensee to sell the product in the convenience stores. This argument can be made if you are already selling your product online and offer them an additional distribution point.

In my experience with one of my products, Spinformation, I was able to license an idea to multiple companies because they didn’t compete with each other. The label had broad applications, making it suitable for licensing in different categories like food, drugs, vitamins, and more.

Don’t forget to consider territories as well. Although your licensee may be exclusively interested in the US market, you may license an idea to companies in Canada, Mexico, or other areas of the world.

Overall, licensing an idea to multiple companies is a difficult task. The best approach is to find a territory or category that your potential licensee does not currently participate in and carve out those specific aspects in the licensing agreement. By identifying the gaps and providing unique opportunities, you can increase your chances of licensing an idea to multiple companies and maximize your revenue potential.


  • Stephen Key

    Stephen Key is an award-winning inventor, renowned intellectual property strategist, lifelong entrepreneur, author, speaker, and columnist.
    Stephen has over 20 patents in his name and the d...