Chapter 4. Intellectual property internationalisation business

• Product of intellectual property
• Patents
• Licensing
• International franchising
• Franchisor’s pros and cons
• Franchisee’s pros and cons
• Cost of pricing of franshising
• Questions for chapter review
• Chapter bibliography

This chapter describes in detail business models that are useful both to the creator and owner of intellectual property, and to those who want to take advantage of the intangible but huge benefits of other people’s innovations, business models or scientific achievements. Intellectual property is physically intangible, so selling it to another country is different from exporting goods. Although it avoids the complex process of physical transportation of goods, business models based on the sale or lease of intellectual property require specific knowledge, especially related to threats and risks when transferring them to another country.

The chapter describes three business models for intellectual property: licensing, patent selling, and franchising. All three business models are widely used in international business. The chapter explains how the creator of intellectual property can earn from the created innovation or business model in other countries and what challenges await there.

Special attention in the chapter is devoted to franchising, as it is one of the most common methods of international business. Franchising is associated not only with fast food restaurant or cafe chains well known to the reader, which count tens of thousands of outlets globally. A part of international hotel chains, retail chains operate by franchising, franchise can even be found in the industrial sector – from furniture to oil products. The chapter describes both the franchise owner’s business model, benefits and threats, as well as the franchisee’s perspective. The types of international franchise agreements, the principles of their conclusion, and the structure of franchise business income are described.

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