We've been approached recently by several large companies to license our content, platform and app. Looking for pros and cons?!

I am a patent attorney generally on the patent owner's side. Signing such a clause should make you nervous. You don't want to be responsible for the major company's infringement. The major company is likely getting more benefit out of using your software than your company is making by selling licenses. The previous gentleman's answer is incorrect. Anyone can be sued for patent infringement if they make, sell, or *use* the claimed invention. It depends on the claims in the asserted patent. Based on experience, it's much more likely that the larger entity would be sued for infringement. A patent infringement case could cost anywhere between $350k-$5M+ USD. http://www.cnet.com/news/how-much-is-that-patent-lawsuit-going-to-cost-you/ In order to properly answer your question, I would need to know why you feel it's "very unlikely" that someone would sue the major company for using your software. If the major company won't back down on this provision, the best thing you can do is determine if you need IP (defense) insurance. If a patent attorney determines that it is necessary, raise the price of your license and get IP insurance.

I've been in ecommerce for over a decade and have co-founded and helped start companies collectively driving over $10MM in ecommerce sales. I've consulted for Fortune 500 ecommerce stores. Here's my advice if you're just getting started without a big budget. Note: Some of this is copied from my answer to a similar question. #1) PROVE THE ASSUMPTION: Start with a dropshipper's existing products to figure out what sells best before you spend money on manufacturing and warehousing. Amazon is perfect for this - they will pay you 4%-10% to promote 253,000,000 products (http://bit.ly/1q2M85R) - you can sign up at https://affiliate-program.amazon.com/ Alternately, get very small amounts of the product (maybe even just buy some from a competitor) and try selling them on ebay and amazon. Nothing hurts more than having $50,000 of imported product gathering dust in your fulfillment warehouse while listening to a voicemail from a debt collector. #2) SOURCING There are several options here. Many people prefer Alibaba.com. Warning - if you use Alibaba, you are stepping into a tank of pirahnas. There are more scam "manufacturers" on Alibaba than real ones. Use Escrow or AliSecure Pay if you buy. If the supplier says they only take T/T, Western Union, Moneygram - just say no! I prefer American Made when possible. If you're like me, try Ariba's Discovery Service - http://bit.ly/1q2NFZu - which will allow you to find suppliers with a physical presence in the USA. Note: Many things can be made on demand (someone purchases, one gets made and shipped) instead of in 500+ manufacturing runs. Start there if you can - Books on CreateSpace.com, Clothes on CafePress.com, Playing Cards on MakePlayingCards.com, etc - to test out your exact product. If you decide to source by purchasing product in bulk, find a fulfillment company to store and fulfill (ship) your orders. Amazon does this - http://services.amazon.com/content/fulfillment-by-amazon.htm - but they might decide to crush you like a bug if you're successful (http://bit.ly/1q2V7DX). Other fulfillment companies for e-commerce include http://www.shipwire.com/ and http://www.webgistix.com/ #3) LAUNCH YOUR SITE This is an entire topic in itself. One of the fastest ways I know for newbies to start in e-commerce is with a SquareSpace.com store. Other options include GoDaddy.com and BigCommerce.com. If you can stand to use the templates they provide instead of trying to customize them, you'll save yourself a lot of hassle and expense - customization usually looks terrible unless a designer/coder was hired to do the work. If you do customize, find someone on odesk.com or elance.com. If you're not hard up for money, just build a custom store from the start. If you can't do that, save up some money and then go for it. Focus on increasing conversion rate - for every 100 visitors, get 1 to buy. Then 2. Then 4. Then 8 (8%). #4) MARKET Figure out where your competition is advertising. Are they getting free, "organic" SEO results on Google? Using social media to drive billions of dollars of sales? (NOTE: That was a joke - don't count on social media as the nucleus of your marketing campaign. Please!) Are they paying for Google ads ("PPC"), buying email lists, using strategic partnerships for promotion, relying on shopping portals, using banner advertising, or something else entirely? There's probably a good reason - figure out what it will take to play in those waters. At the same time, try to find a small enough niche that you can win in it. #5) BEWARE Be careful about artsy things. If someone is attracted to something artistic, it's usually because there is a story behind the art for them, or because it's cheap. If you're going to try to sell artistic things, you may want to consider doing some serious research first about who has been successful in that area. Look at etsy.com to see handmade artsy items (very cool). #6) WORTH A LOOK Worth checking out as you start your journey: Art.com, yessy.com, Artfire.com, ArtPal.com #7) DEEP FOUNDATION If you need help, reach out for a 15 minute call and we'll discuss a go-to-market strategy specific to your goals.

This is always a question of who wants whom more. I've seen deals where the percentage was in single digits. The thing is, I've seen both deals where a LICENSEE ended up with a single digit percentage and deals where a LICENSOR ended up with a single digit percentage. It all comes down to your ability to convince the other side that you are bringing in so much to the table that the other side should get a smaller piece of the pie. Essentially, this depends on these factors: - whether you are well-known in the industry; - whether the other side is well-known in the industry; - the level of uniqueness of your product (if you've developed another minor variation of a product that already exists on the market, chances are the distributor will want a larger piece of the pie); - your level of desperation (it's one thing when you partner up with someone else who will commercialize your product simply because you can make more money by investing your time building new stuff; it's another thing when you have no realistic way to commercialize the product yourself, and if you don't find someone who can do it for you quickly, you'll starve...) MOST IMPORTANTLY, no matter what number you agree to, make sure you read the contract extremely carefully. Contracts can create rights and contracts can destroy rights. Contracts are more powerful than any rights vested in you by IP laws. So, the bottom line is: - Know EXACTLY what you are trying to get out of your contract; - Get your contract reviewed by an experienced lawyer, but make sure you tell the lawyer what it is you're trying to get out of the contract. Lawyers are not going to create "the right deal" for you. We're not going to tell you whether you should be getting 9% or 90% of the revenue. We're going to make sure that you understand whether the contract you are about to sign reflects what you think the terms of the contract are. You're welcome to schedule a call if you would like to discuss this in more detail. Cheers, Andrei

First off, stop calling it an idea. (might be just that, but in licencing efforts you don't want to call it that). Second, what do you mean time is of the essence? This already started sounding risky. With that said, I believe you have two options, assuming that you can spend the next quarter reaching out and performing poorly in presentations and pitches to executives for licencing deals. 1. Learn the art of pitching and presenting, in my blog I have listed some books, one of them is presentations like Steve Jobs. Check it out here: unthinkeverything.blogspot.com (books are listed on the right) and hopefully secure a deal. The risk with this is that if you don't is time wasted. 2. Figure out a creative way to launch your innovation yourself, even if is simply to test for validation. It can be relatively inexpensive to do this (you didn't provide information on your patented idea so I can't help you on that yet). The upside of you launching your product or validation effort yourself is that it gives you exposure, it gives you business experience and most importantly it adds tangible value to your idea no longer putting you on the spot putting a random price point for it. This also makes it easier for you to approach companies and executives and if the licensing deal doesn't go through you have a business out of it. The reality is that if another business can make profit off a license, so can the owner of the product itself. Just have to figure out how.

A 0.31 second Google search located this: http://i.cdn.turner.com/nascar/.element/pdf/2.0/sect/kyn/NASCAR_Prospective_Licensing_Application.pdf