Licensing Q & A - What is Licensing? Apr 10, 2012 Many people ask CONSOR the question: what is licensing? In simple terms, licensing grants the right to a second party to use a trademark, patent, process or copyright for a given product or service, for a given period of time, in a specific territory.   The history of licensing dates back to the Middle Ages, when the Pope granted warrants or licenses to local entrepreneurs who collected taxes and forwarded a royalty percentage to Rome. Later, in the 1770s, two ladies of British royalty lent their name to a line of facial cosmetics in return for a royalty on sales (Royal Warrants originally were granted in return for a “royalty”).... Tagged in: Branding & Licensing Trends

The Role of Social Media and New Social Trends in Licensing Mar 12, 2012 There is no doubt that the basic premise of licensing is changing: The old methods of distribution, the old pricing systems, the old royalty rate ranges, the old relationships, the old selling and on-shelf periods, the old delivery systems to consumers – everything is in flux. It is also clear that an entirely new network of opportunities, media and trends has arisen. Currently, for lack of a better phrase, we refer to this network collectively as social media. However, while “social media” is certainly one way to describe what is happening in the marketplace, there actually is a bigger movement afoot: changing social trends and ways of delivering licensed products and concepts to consumers. Whether these entail promoting a product on Facebook or Twitter; or delivering music via Spotify or video through YouTube and promoting a product via one of these services, all of them fall under the general category of social media and changing social trends.   One purpose of this new column is to identify some of these changes and bring them home to the licensing and merchandising community. The second purpose is to give voice to those readers who have an opinion about ... Tagged in: Social Media

The Real World of Licensing Series Nov 07, 2011 Part I: What are the alternatives to the 25% Rule of Thumb? Previously we discussed the demise of the 25% Rule of Thumb (http://www.consor.com/ip-blog/25-percent-rule-demise.html). While the 25% Rule of Thumb won’t be missed, it does pose the “what-now” question:  what analytical techniques are available to replace the 25% rule?    If there are any rules of thumb that reflect real world transactions, they would be: no agreement is generic, and no one’s intellectual property is “average.”  Just as parent’s of Little Leaguers feel their child is unique and special enough to be the next Mickey Mantle, IP owners believe their properties are special.  Yet many IP valuations rely on a simple calculation of sales multiplied by industry “average” royalty rates.... Tagged in: Untagged 

CONSOR Predicted Demise of 25% Rule Aug 15, 2011 Chairman Weston Anson Has Historically Called Rule Into Question Quoting from Wes Anson’s most recent book, IP Valuation and Management (published by The ABA, 2010):   The 25 percent rule. This “rule” states that an appropriate royalty rate is established by allocating 25 percent of profit as a royalty.  The questions this rule raises are obvious and fall into three broad areas:  First of all, where did this rule come from?  No one knows.  Second, what is the definition of profit?...The third observation on the 25 percent rule revolves around the lack of analysis of investment required, or the risk profile of the particular industry.  Also, there is a complete lack of analysis as to any other negotiating conditions or concerns, such as the competitive environment, the market size, market share, etc.   In sum, in our opinion, the 25 percent rule of thumb should never be used.   ... Tagged in: Untagged