Perform a patent search

The first step to licensing a product is performing a patent search to determine if someone else already owns the rights to your product.

I recommend: Search issued patents and published applications at the United States Patent and Trademark Office (USPTO) Web site.

Obtain a patent

You can't license a product for which you don't own the intellectual property rights. Most licensing firms won't even schedule a meeting with you if you don't have a patent in hand.

I recommend: File a patent application electronically at the USPTO Web site. In order to file electronically, you'll have to apply for a customer number first.

Locate potential licensees

Turn to professionals who can find the right licensee to fit your product.

I recommend: Fill out a simple online form to request information from Davison Integration, which prepares and presents products to corporations for licensing. IMC Licensing negotiates licensing agreements in dozens of consumer product categories. Or consider attending an industry tradeshow where licensing company representatives will be present.

Use confidentiality agreements

Most licensing firms will ask you to sign their confidentiality agreement, but won't sign a confidentiality agreement that you bring to the table.

I recommend: Have an intellectual property lawyer review the agreement or purchase a template from the Internet Legal Research Group to get an idea of what's commonly included in these agreements.

Submit a proposal

Include data on your proposed target market and an analysis of your competition. Be prepared to reveal product specifications, drawings and your prototype, if you have one.

I recommend: Create a professional-looking presentation using Microsoft PowerPoint, available from Amazon.com as a stand-alone program or as part of Microsoft Office.

Sign a licensing agreement

Key components to are royalties (what they'll be based on and how often they'll be paid), exclusivity for the licensee, territory rights granted and market rights granted. Always have an intellectual property attorney review the document before signing.

I recommend: Find a sample patent licensing agreement at FindLegalForms.com and search for an intellectual property attorney in your area at LawInfo.com.