1. Different Ways to Earn Money From Your IP
2. Licensing and Re-Licensing
3. Let's Make a Deal

Intellectual property for sale gives artists, inventors, and authors various ways to earn money from their hard work. In some cases, licensing may be preferable to an outright sale.

There are pros and cons to selling your IP. One advantage of selling it is knowing you'll receive a guaranteed payment, while one big disadvantage is that your maximum return of investment (especially if your investment of time and efforts was large) is limited to the sale price.

Different Ways to Earn Money From Your IP

IP is a good area for creative people because it's flexible. It allows them to create something once and then license it in different forms. However, it's not enough to simply be creative if you want to earn money from your creations. Other skills that are just as important are licensing, selling, and deal-making.

If you don't feel your skill level is quite up to par in these related areas, you might want to partner with someone who can bring those skills to the table. They may consider it a good opportunity to team up with a creative partner. The partnership could be a win-win for you both.

Licensing and Re-Licensing

When you create a piece of IP, you can sell it to see if anyone is willing to buy it from you. If you have a following or are able to build one, this strategy can work well. It's best for patient, persistent types.

Lead generation is a leverage point in the self-publishing arena. This means finding ways to attract potential consumers. 

Selling IP such as video or e-books is actually an example of licensing instead of selling. The information contained in a book or video isn't really sold since it involves no transfer of rights. Instead, the customer purchases a license to use that information. In most cases, licenses are limited to one, specific purpose.

You could sell physical media containing the information, in the form of a DVD or CD. Licensing agreements are very common in software, where consumers agree to terms in order to use it.

You can also license your IP to generate revenue. When you license it to other entities to exploit, you get a portion of the revenue stream. For instance, this happens when authors sign a publishing deal with a publisher. The publisher sells the book, and the author receives royalties.

More examples of how you use IP to earn revenue include the following:

  • Create a tee shirt design and license the design to a clothing company in exchange for a cut of the sales.
  • Take some photographs and license them to postcard or card publishers.
  • Record your own mellow music and license it to companies that sell meditation audio programs.
  • Write an e-book and sell it on Amazon.
  • Create a smartphone app and sell it.
  • Design your own cartoon character and license it to companies that focus on kids' merchandise, such as toy or game companies.

If you have IP that you want to license, you may also choose to grant someone else the right to license the IP for you. In exchange, you'll give them a share of the revenue.

Let's Make a Deal

Once you get a handle on licensing, you might consider creating new sources of revenue by acting as a deal maker. It may take some practice before you feel comfortable in the role, but it can be a fun way to generate money. Some people have perfected the dealmaking art so well, they earn millions in passive income just by making a few phone calls.

Although it doesn't have tangible structure, there's real value in the process of dealmaking, where you connect two or more individuals or businesses that can benefit from each other's resources. The only thing standing in their way is not knowing about the other — that's where dealmakers come in.

Creative pursuits can give you a great deal of satisfaction, and you may find even more enjoyment when you make money from your efforts. Understanding your rights regarding sales versus licensing will help ensure you retain all the rights you wish to keep. If you need help understanding the IP law field, you might want to consult with an expert.

If you need help with intellectual property, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.