When Sonja London talks about out-licensing, she does not start with contracts. She starts with timing, value and culture. As immediate Past President of LESI and founder of Fearless IP, her perspective is rooted in operational reality: most companies are not licensing businesses. They build IP to support their own products and services — until strategy, markets or portfolios change and previously “core” assets quietly turn into unused potential. Podcast episode #62 of 🎧IP Management Voice distils this moment of truth: dare to look at what you already have and ask whether others should be paying for it.

From unused patents to strategic assets: when out-licensing becomes an option

The classic trigger Sonja highlights is simple: assets with no home. These are patents behind discontinued products, internal tools developed for one project, or technologies that no longer fit the roadmap but are still maintained at full cost. They sit on the balance sheet, not in the business.

Here, the IP Management Glossary concept of the Organization of the IP Department becomes concrete: a professionally organized IP function is not only a “cost and protection center,” it also scans the portfolio for exploitation options and aligns with business units to identify external use cases. If the IP department is structurally locked into filing and defending only, out-licensing opportunities appear exotic instead of obvious.

Moving from passive ownership to active monetization requires a systematic portfolio review: Which assets are still aligned with the company’s strategy? Which have strong protection but no internal application? Which intersect markets where others are investing heavily? This is where out-licensing moves from “nice idea” to strategic lever.

IP alignment: the precondition for credible out-licensing

Out-licensing is not a workaround for mismanaged IP. It is a consequence of IP alignment done well: first with your own business, then with other people’s businesses. According to the IP Management Glossary, IP alignment means embedding IP decisions into innovation, market priorities and competitive positioning so that every protected asset has a clear business role.

In the context of Sonja London’s approach, three alignment questions stand out:

  1. Does the asset still support our current or future value creation?
  2. If not, is someone else building offerings where this asset could close a gap?
  3. Can we define, package and protect it so that a third party can actually use it?

Only when internal alignment is clear does external alignment become credible. Otherwise, companies fall into two symmetrical traps Sonja warns against: underestimating value (“too niche, nobody will want it”) or overestimating value (“this is revolutionary” when the market has moved on). Structured landscape and standards analysis — especially in connectivity, IoT, automotive, media and software — keeps both instincts in check and anchors licensing discussions in evidence, not ego.

What makes an asset licensable? Sonja London’s four tests, decoded via the glossary

Sonja frames a pragmatic licensability test: value, transferability, usability, protection. The 🔎IP Management Glossary entry on Licensing reinforces exactly this: a license is permission to use a defined right or asset under clear terms that allocate rights, obligations and risk between licensor and licensee.

Bringing both perspectives together, an out-licensing candidate should meet four conditions:

  • Proven or plausible value: There must be a real problem solved, efficiency gained or market advantage created. Nobody pays for “interesting” alone.
  • Clear definition and scope: The asset must be describable — patent families, modules, datasets, processes — so that legal and technical teams know what is on the table.
  • Usability for third parties: Documentation, integration paths, and technical maturity must allow adopters to implement without heroic assumptions.
  • Protection or control: Patents, trade secrets, or contractual mechanisms ensure that what is licensed cannot simply be taken for free.

Patent-based out-licensing is often easier because rights are clearer and internal emotions are lower: non-core patents can be monetized without giving away the “soul” of the company. For software and know-how, contracts, secrecy and ongoing collaboration become central, but the same four tests apply.

IP culture: why some companies will never see opportunities (and others always do)

Out-licensing is not only a spreadsheet question; it is an IP culture question. The IPBA® Connect materials on IP culture emphasize shared norms and habits that integrate IP thinking into everyday decisions across R&D, product, finance and leadership.

Sonja’s experience matches this logic:

  • Organizations that treat IP as a defensive legal necessity rarely build the internal confidence to engage in licensing — especially when enforcement or negotiations become uncomfortable.
  • Organizations with a mature IP culture are more willing to explore partnerships, assert rights where needed, and experiment with new exploitation models.

A strong IP culture means people recognize non-core assets, escalate them, and are not afraid to ask, “Who else could use this?” It normalizes the idea that IP is a tradable asset class, not just a shield. Without this culture, out-licensing initiatives fail silently: opportunities are neither identified nor championed.

The role of IP department design: from protection unit to opportunity engine

Whether out-licensing becomes systematic or accidental depends heavily on how the IP unit is set up. The Organization of IP Department concept in the IP Management Glossary describes different roles: cost center, service center, profit center, and differentiation center.

To implement the thinking from Sonja London’s episode in practice, three design shifts are key:

  1. Mandate: Give the IP function an explicit exploitation mandate alongside protection — identifying licensing, cross-licensing and collaboration options for non-core assets.
  2. Interfaces: Connect IP closely with strategy, BD, M&A and technology units so that portfolio reviews and business reviews inform each other.
  3. Capabilities: Complement prosecution skills with market analytics, valuation, negotiation and relationship management expertise.

This organizational lens turns Sonja’s checklist into an ongoing process: regular scanning of unused or low-use assets, structured hypothesis-building on potential licensees, and disciplined go/no-go decisions based on the four tests. Out-licensing is no longer a heroic side project; it is part of how the company manages its intangible assets.

Timing: navigating between too early and too late

Timing is where theory often fails and experience matters. Sonja’s message is clear: move too early and you offer something unproven; move too late and patents expire, markets consolidate, or internal champions move on.

Several practical timing signals emerge:

  • A product line is sunset, but its underlying technology still solves a live problem in adjacent industries.
  • Market trends show rising adoption of technologies close to your abandoned projects.
  • Internal priorities shift (e.g., to platform or service models), leaving high-quality legacy solutions stranded.

In patent licensing, expiry sets a hard backstop. For trade secret–based or technology licensing, active maintenance, updates and know-how packaging can extend value far longer — but only if someone owns the roadmap. Viewing this through IP alignment, timing is essentially the point where internal strategic relevance dips below the potential external relevance.

Beyond cash: ecosystems, reputation and control

Finally, Sonja underlines that out-licensing is about more than “easy money.” Done well, it embeds your technology into ecosystems, creates learning loops with partners, and reinforces your position as a serious, professional IP owner.

Here the glossary perspective on Licensing and IP exploitation models is helpful: licensing structures how others use your assets while you keep ownership. It clarifies expectations, secures revenue, protects standards quality, and avoids the ambiguity of silent toleration. Your stance — assertive, collaborative, or indifferent — shapes how markets perceive your IP culture and, ultimately, your negotiation power in future deals.

The message from episode #62 for IP leaders is therefore straightforward and demanding: out-licensing is not a last-stop solution for “leftover patents.” It is a disciplined option inside a broader IP management system — rooted in aligned strategy, robust IP culture, and a deliberately organized IP department. Companies that build these foundations see opportunities early enough to act on them. Those that do not, watch value expire quietly.