Manufacture And Market Under Licence
A person/manufacturer who has a patented product or a protected trademark may license another person to use his/her design and/or sell that product under his/her name. Such a licence may grant exclusive rights for a particular geographic area and/or a specific market, and be linked to a defined period of time. Renewal of the licence is often tied to a specified level of performance.
Alternatively, you may sell a licence to someone in another area to manufacture and/or sell a product to which you own the rights.
Some Examples
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The Workhorse for wood workers was invented in Canada and the licence to manufacture and sell it was sold to Black and Decker.
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Publishing is a form of manufacturing under licence. Authors create books, sell the rights for their material to publishers, and receive royalties.
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A Canadian entrepreneur contacted an American manufacturer of toy soldiers and obtained the rights to manufacture the toys in Canada.
How To Do It
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Decide what type of manufacturing you would like to do.
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Locate a product to manufacture by:
- reading publications relating to new products in the chosen manufacturing field;
- looking for suitable products being manufactured in other countries;
- approaching companies which may have rights to products they do not currently want to manufacture;
- attending trade shows;
- contacting venture capital organizations;
- reading classified advertisements listed under Business Opportunities in newspapers and trade magazines; and advertising for inventors to submit their ideas to you.
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Identify and talk with potential customers to determine their need for the product.
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If you have a product and want to licence someone in another area to produce it, you can find a manufacturer by:
- contacting manufacturing associations in Canada and other countries;
- advertising in the classified sections under Business Opportunities in newspapers and magazines;
- identifying manufacturers of similar products or products which would go well together in a package with your item;
- contacting manufacturers' agents;
- displaying your products at trade shows; and
- contacting venture capital organizations.
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Seek professional financial and legal advice.
Key Questions
For what product or service could I purchase the manufacturing and/or marketing rights?
For what product or service could I sell the manufacturing and/or marketing rights?
Is there a market for the product?
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