With over 20 years of experience, IP strategy and licensing is University of Utah alum Andy Godsey’s bread and butter.
Founder of The Inventor Playbook and COO at Summit Venture Studio, Godsey was the perfect host for the Lassonde for Life workshop, “How to License Your Technology,” where he walked through the how-to of successful IP licensing.
What is a license?
“Licensing grants the right to use your IP, or whatever you’ve developed, in exchange for value,” Godsey said. “There are a variety of licenses: a non-exclusive license means I give you the right to use the IP as well as other people, while exclusive licensing may grant use to one party, or a specific use case.”
The value, or reward structure, comes in various forms — royalties, equity, and lump sum payments are most common.
It’s more than just monetary gain for inventors, though.
“Typically, inventors pursue licensing because it’s a great way to extend their capabilities,” Godsey said. “If you’re an inventor who comes up with an idea in your garage, how do you get it out in the world quickly, how do you scale? Rather than going at it alone, it’s a lot easier to partner with a company like Google, who has the resources to take it the distance. Then you see the idea blossom and share in the earnings, eliminating risk.”
That’s a big motivator for the licensees, too. Godsey said companies that are interested in licensing want access to new technology and innovation without potential research and development risk.
“Large companies I’ve worked with want the competitive advantages by being open to new tech that they may not be in a position to develop themselves,” he said. “It can be expensive to hire experts in so many different areas, so accessing that expertise through licensing can offer significant advantages.”
Patents are granted to inventions which meet the legal criteria of being “novel” and “non-obvious.” Godsey cautioned that while many founders pursue patents, a granted patent does not automatically make a technology attractive for licensing.
“Most patents do not get licensed,” he said. “A patent simply protects an invention — it doesn’t prove that there is a real market or that customers care. The more your IP resembles a viable business opportunity, the more likely it is to be licensed.”
The types of licenses
Once a founder has validated the problem, the solution, and the market, there are still decisions to make about the types of licensing strategy to pursue. Godsey explained that he generally sees two main categories.
“The first is enforcement-based licensing. This is when you believe another party is using your IP without authorization and you pursue a license or compensation,” he said.
Godsey noted that enforcement doesn’t always mean litigation.
“Enforcement can often be handled through direct outreach and negotiation,” he said. “Most people hear about the cases that end up in court, but many never reach that stage.”
Even so, Godsey cautioned that formal infringement litigation is extremely expensive. “Historically, the side that wins in a patent infringement case is the one that can afford to keep going,” he said. “It’s a ‘sport of kings.’”
“It can cost millions of dollars to bring a case,” he said. “I always ask startups, ‘Do you want to spend the next 3-5 years in depositions, or do you want to focus on building your business?’”
While some successful enforcement actions can result in sizeable settlements years down the road, Godsey noted that litigation also carries significant risk, including the possibility of losing the case or having the patent challenged and invalidated.
The second type of licensing approach, adoption, is different.
“This is when you proactively introduce your technology to potential partners who may benefit from it,” he said. “You’re demonstrating why it matters and how it can strengthen their products or operations.”
While this style of licensing is more collaborative, securing an adoption deal is still challenging.
“It’s about the desirability of your technology; if you’re claiming that no one is doing what you’re doing out in the market, but they should be, then you have to have a very strong business case.”
The goal of adoption-focused licensing isn’t to offload your idea — Godsey said it’s about partnerships and long-term relationships.
“You’re showing potential partners how beneficial working together would be,” he said. “You don’t walk away from your work here; you’re extending your capabilities through the right partner.”
Difficulties of licensing
Once you’ve built a valuable technology and identified the approach you’d like to take, founders still face an uphill battle: bias.
“Complexity bias is a big deal and one that stops a lot of licensees,” Godsey said. “Many inventors who come to me have invented something in a system that’s very complex and don’t fully appreciate how difficult it will be to integrate what seems like a simple development into a larger system.”
Godsey recently worked with an inventor, a farmer, who faced this challenge.
“He had identified a real grounding problem and came up with a clever way to address it,” Godsey said. “It sounded straightforward, but once we started mapping out all the systems it touched — ignition, electrical, controls, and even practical questions like making sure it deploys only in the field and not in the shop — it became clear how much complexity was involved. That’s what we’re still working through.”
Beyond technical complexity, Godsey said organizational bias can be another major barrier.
“There is a strong preference for internal innovation for most large companies,” Godsey said. “If you have ever asked your parents for McDonald’s and they said ‘We have food at home,’ it’s a really similar mindset: I have an R&D unit internally and it’s hard for me to stomach paying more money for external parties who don’t know what’s on our company roadmap or how to align with internal systems.”
Founders, too, can get in their own way. Godsey said inventors who assume inflated value in their idea early on can be the reason a deal is dead on arrival.
“I get inquiries all the time from inventors who have a number in mind for what they think their idea is worth, and in many cases it isn’t grounded in any validation,” he said. “One inventor, for example, expected an eight-figure payout without first determining whether the problem was widespread, who it affected, how severe it was, or whether it occurred frequently enough to matter.”
This founder and many others fall victim to “wonky math,” Godsey said.
“They say ‘Do you know how many of these widgets exist in the market? There are 100 million, therefore, this must be a lucrative idea,’” he said. “But that kind of thinking ignores the fundamentals of an adoption-style licensing campaign, which should focus on how the technology will help the licensee succeed so both sides can win together.”
Is my technology licensable?
The first step in determining whether a technology is licensable is validating that a real problem exists.
“You may believe you have a billion-dollar idea, but that belief isn’t enough — you have to validate this,” he said. “We research the problem to see how significant it is and if it affects the market in a meaningful way. Inventors need to think about this too — is your solution rooted in reality?”
Even if it addresses a real problem, Godsey said the next question is whether the solution stands out.
“Competitive advantage is about whether your solution really addresses the problem faster, cheaper, better, or uniquely,” he said. “Having implementation readiness with data, documentation, or prototypes reduce adopters’ time or cost to integrate and can make a huge difference in the likelihood of adoption.”
Yet another factor that affects licensing potential at this step is industry flexibility.
“Different industries are more open to external licensing than others,” Godsey said. “We look at two key variables: the need for continuous innovation — like short product life cycles or intense competition — and how easy it is to adopt new technology within that industry’s existing systems.”
Using this model, Godsey explained that categories such as toys and games, sports and outdoor, and packaging are the most open to innovation.
“These sectors have long histories of partnering through licensing,” he said. “If a product can help them move faster or stand out, they’re generally willing to explore collaborations.”
On the other end of the spectrum are industries with highly complex or regulated environments, such as defense.
“These industries operate under strict requirements and standards, especially when competing for government contracts,” he said. “Even strong ideas can be difficult to implement quickly. Innovation still happens, but often in more incremental steps.”
Whether an industry is open or closed to external licensing isn’t the only factor that determines adoption.
“Sometimes a market cannot afford innovation in the space.” Godsey said. “If margins are already thin, even if your solution is better than anything that exists, if it’s also more expensive in a very price-sensitive market, it won’t be attractive.”
Reaching out to Potential Licensees
When it comes to outreach, Godsey said being intentional is everything.
“Who you reach out to at the company is super important,” he said. “IP departments are historically traditional thinkers from a risk mitigation standpoint and have smaller budgets. I often reach out to someone who is the head of the product that I’m trying to implement with, or within corporate development.”
How to prepare for licensing
Godsey summarized his remarks at the workshop by laying out 9 steps to help prepare for licensing. The steps are:
- Define and validate the problem you are solving
- Consider IP protection and define strategy
- Demonstrate feasibility and validate your solution
- Validate customer and market
- Quantify your value proposition
- Align with target industries and partners
- Reduce adoption friction
- Create professional collateral
- Plan your licensing outreach
Licensing, Godsey emphasized, is ultimately about clarity — clarity of the problem, the solution, the market, and the value created for a partner. While the path can be complex, founders who validate real needs, prepare their technology for adoption, and target the right industries position themselves for meaningful partnerships. “Licensing isn’t about handing something off,” he said. “It’s about finding the right people to build with.”
